Sui- is a Japanese word for the element of water. Sui is defined as a Layer 1 protocol blockchain. In basic terms, this means that Sui performs its own consensus and validation for transaction blocks (activity) on its networks using its own native token (SUI, in this case). Ethereum (ETH) and Bitcoin (BTC) are other examples of Layer 1 blockchains. It delivers the benefits of Web3 with the ease of Web 2 and it's a scalable infrastructure that's fast, secure, and affordable. Unrivaled speed coupled with low, predictable fees means cost stays down when demand goes up.

Sui Blockchain

Sui is a type of blockchain known as a Layer 1 protocol. To put it simply, this means that Sui handles its own process of confirming and verifying transaction blocks on its network using its own special token called SUI. Think of Ethereum (ETH) and Bitcoin (BTC) as similar examples of Layer 1 blockchains. Now, on the other hand, Layer 2 blockchains work differently. They use the existing infrastructure of Layer 1 networks to complete the confirmation of transaction blocks. An example of this is Polygon (MATIC), which is a Layer 2 blockchain that builds upon Ethereum.

SUI Tokens

The native token for Sui is SUI. Transaction blocks on Sui often deal with small fractions of the value of one SUI. To make these transaction blocks easier to work with, Sui provides MIST. It takes one billion MIST to equal one SUI. Everything has a cost, and blockchain transactions are no exception. It costs money to provide computational power to process transaction blocks and store their results. The term for the cost of processing transaction blocks is "gas". You pay for gas and the cost of storing data with a blockchain's native tokens, in this case, SUI (or MIST).

The total supply of SUI is capped at 10,000,000,000  (ten billion tokens). A share of SUI total supply became liquid at Mainnet launch, with the remaining tokens vesting over the coming years, or distributed as future stake reward subsidies.

The SUI token serves four purposes on the Sui network:

• You can stake SUI to participate in the proof-of-stake mechanism.

• SUI is the asset denomination needed to pay the gas fees required to execute and store transactions or other operations on the Sui network.

• You can use SUI as a versatile and liquid asset for various applications, including the standard features of money - a unit of account, a medium of exchange, or a store of value - and more complex functionality smart contracts enable, interoperability, and composability across the Sui ecosystem.

• SUI token plays an important role in governance by acting as a right to participate in on-chain voting on issues such as protocol upgrades.

As the supply of SUI tokens is limited, they have to be spread out among more economic activities over time if Sui expands its use cases and attracts millions of users. Also, the existence of the storage fund plays a significant role in the financial aspect. When there's a greater need for on-chain data storage, it leads to a bigger storage fund, which, in turn, reduces the amount of SUI tokens available in circulation.

Sui Tokenomics

Tokenomics is a term that covers various ideas related to how blockchain economies work. To put it simply, it's like the financial backbone of blockchains. Just like a building needs a strong foundation to stand, a blockchain must have a well-researched and carefully planned token economy to succeed. Sui's tokenomics are built on solid financial principles backed by thorough blockchain research. They're designed to handle the financial demands of web3 both now and in the future.

Sui Economy

Three main types of participants characterize the Sui economy:

• Users submit transactions to the Sui platform to create, mutate, and transfer digital assets or interact with more sophisticated applications enabled by smart contracts, interoperability, and composability.

• SUI token holders have the option of staking their tokens to validators and participating in the proof-of-stake mechanism. SUI owners also hold the rights to participate in Sui governance.

• Validators manage transaction processing and execution on the Sui platform.

The Sui economy is composed of five core components:

• SUI: The SUI token is the Sui platform native asset.

• Gas fees: Gas fees are charged on all network operations and used to reward participants of the proof-of-stake mechanism and prevent spam and denial-of-service attacks.

• Storage fund: The Sui storage fund is used to shift stake rewards across time and compensate future validators for storage costs of previously stored on-chain data.

• Proof-of-stake: The delegated proof-of-stake mechanism is used to select, incentivize, and reward honest behavior by Sui Validators and the SUI owners that stake with them.

• Voting: On-chain voting is used for governance and protocol upgrades.

Proof of Stake

The Sui platform relies on delegated proof-of-stake (DPoS) to determine the set of validators that process transactions.

SUI Token Staking

Within each epoch, a fixed set of validators process operations, each with a specific amount of stake from SUI token holders. A validator's share of total stake is relevant in that it determines each validator's share of voting power for processing transactions. Staking SUI implies the SUI tokens are locked for the entire epoch. SUI token holders are free to withdraw their SUI or to change their selected validator when the epoch changes.

SUI Bridging

Bridging is like shifting tokens from one blockchain to another. When you want to move tokens between blockchains that don't naturally work together, a bridge steps in. It wraps your tokens, essentially converting them into a different form suitable for the target blockchain. You can bring tokens into the SUI blockchain from other blockchains or take SUI tokens and send them to other blockchains. Sui makes bridging possible through Wormhole Connect and Wormhole Portal Bridge.

Storage Fund

Sui has a smart and sustainable way of handling the costs associated with storing data, which is especially important because Sui can store massive amounts of data on its blockchain.

In financial terms, storing data on the blockchain creates a challenge over time. The validators who store data today may not be the same as those who need to access that data in the future. If users only paid fees when they first stored the data, it would mean that future users have to pay extra to cover the costs of previous users, resulting in high fees. This situation can be a big problem for Sui down the line if it's not addressed.

Sui's economic plan includes a storage fund. When users make transactions on Sui, they pay fees that cover both computation and storage upfront. These storage fees go into a fund, and that fund is used to adjust how much of the future stake rewards validators get compared to the users who stake SUI with them. This setup ensures that future validators have a sustainable way to do business.

Sui Gas Pricing

The Sui gas-pricing system accomplishes three important things: it keeps transaction fees low and predictable, encourages validators to improve how they process transactions, and safeguards against denial-of-service attacks.

This means you can concentrate on using the Sui network without worrying about guessing the current gas fee prices. Validators establish a fixed reference price for the entire network at the beginning of each epoch, so you can rely on this reference price when you send transactions.

Additionally, this pricing method rewards validators who perform well, which helps align the interests of SUI token holders, the network's operators (validators), and its users.