Sui Network has attracted interest from the crypto community with its rapid price growth. Per crypto analyst Gonzo (@GonzoXBT), SUI remains one of the most hyped blockchain projects.
Although the network still has the potential to grow, concerns are being raised about whether the project’s price surge is sustainable or if venture capitalists (VCs) are preparing to offload their holdings.
With its foundation rooted in the abandoned Libra (Diem) project from Facebook, Sui offers unique technological advancements. The question, however, remains: is $SUI’s growth based on genuine fundamentals, or are VCs waiting to cash out?
What you'll learn 👉
Sui’s Technological Roots and Innovation
Sui was built on the technology originally designed for Libra, Facebook’s stablecoin that never launched. The blockchain employs a unique programming language called Sui Move, derived from the Move language used by Libra/Diem.
Move, which is based on Rust (also used by Solana), is more accessible to developers but unfamiliar to those accustomed to Ethereum’s Solidity.
One of Sui’s key innovations is its parallel transaction execution, which increases throughput and allows for faster and cheaper transactions. This feature has led to comparisons with Solana, as both chains prioritize speed over decentralization.
However, Sui’s focus on the gaming sector and its strategic partnerships in the Asian market set it apart from its competitors.
VCs and Token Unlocks: A Potential Concern
Despite the rapid adoption and rising Total Value Locked (TVL), concerns remain regarding the high number of locked tokens held by venture capitalists. Recently, Sui experienced a $114 million token unlock, benefiting VCs who initially purchased tokens at much lower prices, between $0.03 and $0.10 per SUI.
As Gonzo pointed out, these early investors are likely sitting on significant profits, creating the risk that they might sell in large volumes. However, it’s important to note that further token unlocks are scheduled, meaning VCs may have an incentive to continue supporting the token’s price.
Monitoring future TVL and partnership announcements will be crucial in determining the long-term potential of SUI.
Doge2014 raises 500K in days celebrating Dogecoin. Make potentially big profits and get in on exclusive airdrop!
Show more +The Role of TVL and Market Comparisons
While Sui’s TVL is growing, it is still less than one-fifth of Solana’s TVL, making direct comparisons between the two projects valuable. Interestingly, SUI’s market cap-to-TVL ratio is about three times lower than Solana’s, implying that the token has room to grow.
Despite this, Gonzo warns that a lot of capital on the Sui network is not “sticky,” meaning it could leave the ecosystem if better opportunities arise elsewhere.
Gonzo advises investors to keep a close eye on TVL changes, particularly using tools like DeFiLlama, to gauge the network’s potential for further growth.
Moreover, he emphasizes that while metrics such as active addresses and DEX volumes are useful, they may be less indicative on chains with low fees like Sui.
The Future of SUI and Memecoins on the Network
Sui’s rapid rise has also attracted attention in the memecoin space. Gonzo specifically mentioned $FUD, a meme token on Sui that has seen a 400% price increase since September. With a market cap of $46 million, $FUD still has room to grow compared to its rival $HIPPO, which boasts a market cap of $150 million.
With SUI expanding its ecosystem, the coming months will be crucial in determining whether the token can maintain its current momentum or if investors will see a sell-off from early venture capital backers.
Follow us on X (Twitter), CoinMarketCap and Binance Square for more daily crypto updates.
Get all our future calls by joining our FREE Telegram group.
We recommend eToro
Wide range of assets: cryptocurrencies alongside other investment products such as stocks and ETFs.
Copy trading: allows users to copy the trades of leading traders, for free.
User-friendly: eToro’s web-based platform and mobile app are user-friendly and easy to navigate.
