New public chain Sui: Layer 1 built by the former Facebook team with a valuation of $2 billion

Original Author: Trace, Figment Capital

Original Title: 《The Sui Blockchain: What you need to know about the next major L1》

Compilation: 0x9F, czgsws, BlockBeats

On July 12, The Information cited sources reporting that Mysten Labs, a Web3 startup founded by former Meta Platforms employees, is seeking to raise at least $200 million in Series B funding at a valuation of $2 billion, led by FTX Ventures. The project has already secured $140 million in this round of funding. Previously, Mysten Labs announced the completion of a $36 million Series A funding round in December 2021, led by a16z, with participation from Coinbase Ventures, NFX, Slow Ventures, Scribble Ventures, Samsung NEXT, Lux Capital, and others.

Mysten Labs was founded by four former Meta engineers and announced its Layer 1 public chain project "Sui" in March 2022, followed by the economic model of its token SUI in May. Figment Capital investor Trace introduced the new public chain Sui from three perspectives: technology, token economics, and team .

Technology

Based on years of research and development at Meta (formerly Facebook), Sui is unlike any blockchain we have seen.

First, the Sui blockchain has extremely high performance. Early data from running Sui nodes on a MacBook Pro shows it can handle over 120,000 token transactions per second.

The key to Sui's performance lies in transaction parallelization. In most blockchains, transactions must be ordered and placed into blocks for sequential execution. Sequential execution unnecessarily limits the throughput on these chains, as most transactions are independent of each other. Because Sui requires explicit declaration of transaction dependencies, it can process them in parallel. In cases where a few transactions are interwoven, Sui can still sort and execute them sequentially.

Sui achieves consensus in two different ways:

1. Byzantine-style consensus broadcast for independent transactions

2. BFT consensus for dependent transactions

Since independent transactions can be verified in parallel, Sui can linearly increase throughput by adding more devices to each validating node, thereby enhancing scalability.

Not only does Sui have high throughput, but it also has low latency. Its consensus algorithm focuses on minimizing the communication required between validating nodes to process transactions. This results in simple transactions being verified almost instantly, while complex transactions can be executed within 2-3 seconds. Of course, we need to see how this network performs in public deployment, but the early results are extremely encouraging.

Sui uses the Move virtual machine and Move programming language to implement smart contracts. Move is memory-safe like Rust, but more expressive than other smart contract languages. I wrote a brief introduction for Move. Sui uses a small variant of Move to improve network performance and simplify the developer experience. This document will tell you more about the differences between Sui's Move and standard Move.

While most blockchains have account-centric storage, Sui's storage is designed around objects. Each object is owned by an address, mutable by default, but can also be set as immutable or shared among multiple addresses. Sui's Move smart contracts can accept these objects as inputs, operate on them, and return objects as outputs. This is a completely different programming paradigm for smart contracts compared to Solidity or Rust.

One of Sui's engineers described using Move programming vividly: "When I explain Move at a bar, I say: 'Here’s a bottle of wine and a cup. Suppose they are both NFTs, if we have a function, it would be pouring from the bottle into the cup while receiving these two parameters. After the function executes, it returns to you a cup of wine.' This intuitive programming style is very suitable for dynamic NFTs and crypto games that continuously mix and modify digital assets."

Token Economics

The total supply of SUI Tokens is 10 billion, which will be allocated to the founding team, investors, public sales, the Sui Foundation, and future releases. The exact timing of the initial token distribution will be announced in the coming weeks.

Sui Token has four functions:

1. Staking/protecting the network
2. Transaction fees
3. Governance
4. Account unit/transaction intermediary

Due to fluctuations in network demand, most blockchains are significantly affected by gas cost volatility. To keep gas fees low and predictable, Sui implements a novel gas market design: Sui operates in epochs, with the validating node set changing every epoch (24 hours). At that time, the validating nodes of the new epoch will vote on the reference gas fee for the entire epoch. The protocol provides incentives to encourage validating nodes to keep transaction fees close to the reference price throughout the epoch. By providing more stable gas fees, transactions submitted to Sui will execute at a more predictable speed, creating a better user experience.

But how does gas fee remain low during network congestion? Because the throughput of the network is linearly related to the number of participants, validating nodes can proportionally increase more participants based on the rising network demand, thus keeping gas prices close to the reference price.

Sui also addresses the issue of state bloat. Whenever users submit data on-chain, they must simultaneously pay gas fees and other costs to Sui's "storage fund." This fund is used to pay the real costs of validating nodes storing user data. As the network matures and storage costs increase, validating nodes will be compensated from the storage fund. Additionally, once users no longer need to store this data, they can delete it and receive a rebate from the storage fund.

The complete economic situation of the storage fund is quite interesting, and you can find more information in Mysten Labs' recent AMA. The following image provides an overview of Sui Token economics.

Team

The development team of Sui is Mysten Labs, a company building infrastructure for Web3. The founders include Evan Cheng, Adeniyi Abiodun, Sam Blackshear, George Danezis, and Kostas Kryptos, all of whom have participated in the Novi and Diem projects at Meta. These scientists and engineers are key figures behind many innovations at Meta, including the Move programming language and the Narwhal/Tusk memory pool and BFT consensus currently being implemented on other blockchains.

This team has envisioned four key applications for Sui:

1. Gaming
2. DeFi
3. Commerce
4. Social

All four applications will fully leverage Sui's high throughput and low latency to provide the best user experience. Building gaming and social applications on Sui also has unique advantages. Games can utilize Move's security and expressiveness for digital assets. Social media applications can leverage Sui's data storage economics to store all data directly on-chain.

Sui is currently running a public development network and will launch an incentivized testnet next month. More details about the mainnet launch are expected in the coming months. If you are interested in learning more, please check the Sui documentation.