SUI Token and Tokenomics
This module examines the SUI Token, its utility, governance and tokenomics.
The SUI Token
The SUI token (SUI) is the native currency of the SUI blockchain. It was launched on May 3, 2023, and it has a capped supply of 10 billion tokens, about 5% of which was initially available at launch, with the remaining tokens distributed over time according to a vesting schedule, in order to help maintain market stability and support long-term growth of the SUI ecosystem.
These tokens are used to pay for transaction fees required for executing and storing transactions on the Sui blockchain, with a fee mechanism that prevents spam and ensures network efficiency, by requiring users to pay for the computing resources they consume, while at the same time supporting the network’s proof-of-stake (PoS) consensus mechanism and governance processes.
SUI tokens are used to pay transaction fees, ensuring that the network operates efficiently and is able to handle a high volume of transactions. They are also used in staking and Governance.
Staking Mechanisms
Staking is an important part of the SUI network, providing security and stability through a PoS consensus mechanism, in which validators are selected based on the amount of SUI tokens they have staked. These validators process transactions and maintain the blockchain’s integrity. Token holders who do not wish to run a validator node can delegate their tokens to existing validators, contributing to network security and earning rewards.
The staking process involves locking up SUI tokens for a specific period, typically an epoch, which lasts 24 hours on the SUI network. During this time, the staked tokens are used to validate transactions and secure the network. Validators are incentivized to act honestly because they earn rewards from transaction fees and block rewards. Malicious behavior or failure to meet performance standards can result in penalties, ensuring that only reliable participants maintain network operations.
Validators earn rewards based on their performance and the total amount of tokens they have staked. Rewards are shared with the delegators, who receive a portion that is proportional to their stake, a mechanism that both secures the network and aligns the incentives of validators and delegators, promoting a healthy blockchain environment.
Governance
Governance within the SUI network is decentralized, allowing token holders to participate in on-chain voting, a process that influences decisions on protocol upgrades, parameter changes, and other significant proposals. Voting power is proportional to the number of tokens staked, ensuring that those with a greater stake in the network have more influence over its governance. This system encourages active participation and ensures that the interests of significant stakeholders align with the network’s long-term success.
The governance process includes submitting proposals, discussing them within the community, and voting. Proposals can range from technical upgrades to changes in network parameters. The system is designed to be flexible and adaptive, allowing the network to evolve in response to new challenges and opportunities.
Supply and Distribution
The total supply of SUI tokens is capped at 10 billion. The initial distribution included about 5% of the total supply at the mainnet launch, with the remainder being released over time according to a vesting schedule, an approach which helps mitigate inflationary pressures and supports the network’s long-term stability.
The distribution of SUI tokens includes allocations for early contributors, investors, and a community reserve managed by the SUI Foundation. Specifically:
- 20% of the total supply is allocated to early contributors;
- 14% is allocated to investors;
- 10% to the treasury;
- 6% to the community access program and app testers;
- 50% to the community reserve.
The community reserve funds development initiatives, incentivizes participation, and supports the growth of the SUI ecosystem as a whole.
This structured distribution ensures that the network can grow sustainably, rewarding those who contribute to its success and maintaining a balanced token economy. It also ensures that resources are available to support ongoing development and innovation within the SUI network.
Tokenomics and Economic Model
SUI’s economic model is designed to ensure sustainable growth and network security, including mechanisms for predictable and low transaction fees, encouraging widespread use and adoption. Staking rewards and governance mechanisms incentivize active participation, aligning the interests of validators, delegators, and developers with the network’s health.
A unique feature of SUI’s tokenomics is its storage fund, which addresses long-term data storage costs on the blockchain. Here users pay fees upfront for both computation and storage, with storage fees deposited into a fund that compensates future validators for storing on-chain data, ensuring that the costs of maintaining the network are fairly distributed over time, preventing disproportionate burdens on future participants.
The storage fund compensates validators for the long-term costs associated with data storage. Validators receive rewards from the storage fund to cover their storage costs, ensuring they can maintain the network without incurring losses.
Highlights
- The SUI token (SUI) launched on May 3, 2023, with a capped supply of 10 billion tokens. Approximately 5% was initially available, with the rest distributed over time via a vesting schedule to ensure stability and support growth.
- SUI tokens are used for transaction fees, ensuring network efficiency, and supporting the proof-of-stake (PoS) consensus mechanism and governance.
- SUI tokens facilitate staking, where holders delegate tokens to validators who secure the network. Validators and delegators earn rewards, promoting active participation and network security.
- Governance is decentralized, allowing SUI token holders to vote on network proposals. Voting power is proportional to the number of tokens staked, aligning influence with stake size.
- The total supply is capped at 10 billion, with distributions including 20% for early contributors, 14% for investors, 10% for the treasury, 6% for community access and testers, and 50% for the community reserve to fund development and ecosystem growth.
Lição 1:Introduction to SUI
Lição 2:SUI Architecture and Technical Foundations
Lição 3:Wallets, Transactions and SUI Staking
Lição 4:SUI Token and Tokenomics
Lição 5:SUI Ecosystem Applications
Lição 6:Cetus Protocol
Lição 7:Turbos Finance
Lição 8:MovEX
Lição 9:Conclusion and Future Directions
SUI Token and Tokenomics
This module examines the SUI Token, its utility, governance and tokenomics.
The SUI Token
The SUI token (SUI) is the native currency of the SUI blockchain. It was launched on May 3, 2023, and it has a capped supply of 10 billion tokens, about 5% of which was initially available at launch, with the remaining tokens distributed over time according to a vesting schedule, in order to help maintain market stability and support long-term growth of the SUI ecosystem.
These tokens are used to pay for transaction fees required for executing and storing transactions on the Sui blockchain, with a fee mechanism that prevents spam and ensures network efficiency, by requiring users to pay for the computing resources they consume, while at the same time supporting the network’s proof-of-stake (PoS) consensus mechanism and governance processes.
SUI tokens are used to pay transaction fees, ensuring that the network operates efficiently and is able to handle a high volume of transactions. They are also used in staking and Governance.
Staking Mechanisms
Staking is an important part of the SUI network, providing security and stability through a PoS consensus mechanism, in which validators are selected based on the amount of SUI tokens they have staked. These validators process transactions and maintain the blockchain’s integrity. Token holders who do not wish to run a validator node can delegate their tokens to existing validators, contributing to network security and earning rewards.
The staking process involves locking up SUI tokens for a specific period, typically an epoch, which lasts 24 hours on the SUI network. During this time, the staked tokens are used to validate transactions and secure the network. Validators are incentivized to act honestly because they earn rewards from transaction fees and block rewards. Malicious behavior or failure to meet performance standards can result in penalties, ensuring that only reliable participants maintain network operations.
Validators earn rewards based on their performance and the total amount of tokens they have staked. Rewards are shared with the delegators, who receive a portion that is proportional to their stake, a mechanism that both secures the network and aligns the incentives of validators and delegators, promoting a healthy blockchain environment.
Governance
Governance within the SUI network is decentralized, allowing token holders to participate in on-chain voting, a process that influences decisions on protocol upgrades, parameter changes, and other significant proposals. Voting power is proportional to the number of tokens staked, ensuring that those with a greater stake in the network have more influence over its governance. This system encourages active participation and ensures that the interests of significant stakeholders align with the network’s long-term success.
The governance process includes submitting proposals, discussing them within the community, and voting. Proposals can range from technical upgrades to changes in network parameters. The system is designed to be flexible and adaptive, allowing the network to evolve in response to new challenges and opportunities.
Supply and Distribution
The total supply of SUI tokens is capped at 10 billion. The initial distribution included about 5% of the total supply at the mainnet launch, with the remainder being released over time according to a vesting schedule, an approach which helps mitigate inflationary pressures and supports the network’s long-term stability.
The distribution of SUI tokens includes allocations for early contributors, investors, and a community reserve managed by the SUI Foundation. Specifically:
- 20% of the total supply is allocated to early contributors;
- 14% is allocated to investors;
- 10% to the treasury;
- 6% to the community access program and app testers;
- 50% to the community reserve.
The community reserve funds development initiatives, incentivizes participation, and supports the growth of the SUI ecosystem as a whole.
This structured distribution ensures that the network can grow sustainably, rewarding those who contribute to its success and maintaining a balanced token economy. It also ensures that resources are available to support ongoing development and innovation within the SUI network.
Tokenomics and Economic Model
SUI’s economic model is designed to ensure sustainable growth and network security, including mechanisms for predictable and low transaction fees, encouraging widespread use and adoption. Staking rewards and governance mechanisms incentivize active participation, aligning the interests of validators, delegators, and developers with the network’s health.
A unique feature of SUI’s tokenomics is its storage fund, which addresses long-term data storage costs on the blockchain. Here users pay fees upfront for both computation and storage, with storage fees deposited into a fund that compensates future validators for storing on-chain data, ensuring that the costs of maintaining the network are fairly distributed over time, preventing disproportionate burdens on future participants.
The storage fund compensates validators for the long-term costs associated with data storage. Validators receive rewards from the storage fund to cover their storage costs, ensuring they can maintain the network without incurring losses.
Highlights
- The SUI token (SUI) launched on May 3, 2023, with a capped supply of 10 billion tokens. Approximately 5% was initially available, with the rest distributed over time via a vesting schedule to ensure stability and support growth.
- SUI tokens are used for transaction fees, ensuring network efficiency, and supporting the proof-of-stake (PoS) consensus mechanism and governance.
- SUI tokens facilitate staking, where holders delegate tokens to validators who secure the network. Validators and delegators earn rewards, promoting active participation and network security.
- Governance is decentralized, allowing SUI token holders to vote on network proposals. Voting power is proportional to the number of tokens staked, aligning influence with stake size.
- The total supply is capped at 10 billion, with distributions including 20% for early contributors, 14% for investors, 10% for the treasury, 6% for community access and testers, and 50% for the community reserve to fund development and ecosystem growth.