SUI rose 141% in a week, being called the "Solana killer." Is the bullish stance justified?

Author: Frank, PANews

Sui has recently gained significant attention on social media, with many comparing Sui to the "Solana killer." Numerous analyses of Sui's network performance and the price trends of the SUI token have led to a bullish sentiment surrounding SUI. But can this claim really hold water? How is the ecological development of Sui?

Behind the Bullish Voices of Million-Follower Influencers: A Director of the Sui Foundation

The bullish remarks about SUI first came from Raoul Pal, the founder and CEO of Real Vision, who has millions of followers on Twitter. On August 9, he tweeted multiple times, concluding that "$SUI is starting to look very interesting from a price perspective, although it is still early and unproven, it has already shown signs of breaking out compared to most tokens" after comparing the price charts of SUI with those of other mainstream public chain governance tokens.

Indeed, SUI's price performance has been impressive recently. After hitting a recent low of $0.4625 on August 5, it began a strong rebound, reaching a high of $1.1174 by August 12. The increase over the week exceeded 141%, marking the highest gain among mainstream public chain tokens. However, this price still shows a significant gap compared to the high of $2.18 reached in March this year. Previously, the SUI token had dropped from $2.18 on March 27, 2024, to a low of $0.46, resulting in a decline of over 78.8% within six months.

SUI's outstanding performance may be attributed to recognition from Grayscale. On August 7, Grayscale announced the launch of two new crypto investment products, including a trust product for the SUI token. Rayhaneh Sharif-Askary, Grayscale's product and research director, stated, "We are excited to add Bittensor and Sui to our product suite and believe that Bittensor is at the core of decentralized AI development, while Sui is redefining smart contract blockchains." Following this news, SUI's price surged by 42% on August 8, marking the highest single-day gain in recent times.

Grayscale currently offers 18 crypto investment products, primarily including mainstream public chain projects like Solana and Litecoin.

Raoul Pal mentioned on Twitter, "I am looking for the next SOL-type opportunity, and SUI is one of them." However, his bullish stance has also drawn some skepticism, as he himself noted that he is a director of the Sui Foundation and has a vested interest in the Sui ecosystem.

Andrew Kang, co-founder of Mechanism Capital, listed five reasons for Sui's recent rise on Twitter, including Raoul Pal's support, significant over-the-counter trading demand, strong holding by holders after a large unlock, no price pullback in SUI's price trend, and the performance upgrade of Mysiceti. However, regarding the argument that SUI will surpass Solana, Andrew Kang stated, "I don't think SUI's market cap will match SOL's, but it is 3.5% of SOL's market cap."

In addition to the bullish sentiments from various KOLs, there have also been some developments in the Sui ecosystem. On August 9, Sui's ecological domain service SuiNS announced its reorganization into a decentralized protocol, allowing users to govern through the protocol token NS. It plans to airdrop 10% of the tokens to the community. On August 13, CoinList launched a staking fund supporting five crypto assets, including ETH, SOL, NEAR, SUI, and MINA.

Data Comparison Falls Short of Solana, Comparable to TON

However, has the Sui ecosystem truly made significant progress recently, or is the bullish sentiment merely a "smoke screen"? PANews compared several indicators of Sui, Solana, and TON (data collected on August 12).

In terms of trading volume and transaction count, SUI still lags behind Solana, especially with a 24-hour trading volume of only about 5% of Solana's. Given TON's recent strong performance in the ecosystem and secondary market prices (which has also been dubbed a Solana killer), it can be seen that Sui's overall data performance is closer to that of TON, with Sui seemingly leading in several indicators. However, in terms of circulating market cap, SUI has a significant difference from TON, with SUI's circulating market cap at only $2.5 billion, while TON's is approximately $15.9 billion, a difference of 6.4 times. Catching up to TON's market cap may represent SUI's potential for growth. However, considering that TON is backed by Telegram's 900 million users, it has more room for valuation premium compared to other public chains.

Large Unlock Interpreted as Positive?

The unlocking of SUI tokens has also become a reason for many KOLs to be bullish. On August 1, 53.89 million SUI tokens were unlocked, accounting for 2.56% of the circulating supply, valued at approximately $50.6 million. Those bullish on SUI believe that the market did not experience significant selling pressure after these tokens were unlocked, which is a reason for the market's positive outlook. Conversely, those with opposing views argue that SUI tokens will not only unlock in August but will continue to unlock monthly, suggesting that this is merely a tactic by major players to create momentum before selling. Some users have also questioned whether the Sui Foundation has recently attracted KOLs to promote the SUI token through paid means.

Additionally, it is worth noting that since August 5, the contract open interest for SUI has seen a significant increase. For example, in the Binance perpetual contract trading pair, the open interest for SUI contracts rose from 28.46 million contracts on August 5 to 100 million contracts by August 12. Meanwhile, the funding rate has remained negative. This data phenomenon indicates that a large number of short positions are paying fees to maintain their positions.

From on-chain data, Sui has indeed made significant progress in the past six months, especially in May when it surpassed 70 million daily transactions through a SPAM (spam) model, exceeding all public chains, including Solana. Although the data subsequently declined to around 7 million transactions, it still remains far higher than the hundreds of thousands of transactions before May. Similarly, the number of active addresses has also seen substantial growth. However, the overall scale still lags significantly behind Solana, particularly in terms of daily new token issuance, which is only around 30, while Solana's figure is about 20,000.

In summary, it is still too early for Sui to be considered a "Solana killer"; TON may be the true direct competitor that Sui can compare itself to.