SUI may soon become Solana’s strongest competitor – K33 Research

Solana may currently be the top alternative layer-1 network behind Ethereum, but the Sui network could eventually rival that spot, according to analysts at K33 Research.

In a Sept. 18 research note, K33's Defy analyst David Zimmerman said Sue's performance with Solana, combined with its architecture and upcoming game console releases, could make it a top contender among “alt L1s.”

“Solana often steals the spotlight in L1 battles, but while SOL/ETH has gained 6% since the August open, SUI/SOL has gained 115% over the same period,” Zimmerman said.

Much of Sui's recent market performance — the network's native Sui ( SUI ) token has gained 36 percent in the past week — he admitted can be put down to broad “inflation,” saying SUI “definitely” had the right substance to back it up. Recent price increases.

On September 17th, the stablecoin community announced the launch of the US Dollar Coin (USDC) on the Sui network, demonstrating further acceptance and support from the network's major industry players.

Zimmerman notes that Sui has the all-important technical need to be Solana's rival. Sui theoretically processes a maximum of 297,000 transactions per second (TPS), compared to Solana's theoretical maximum of 65,000.

Notably, there is a large gap between the network's theoretical maximum TPS and the TPS it can achieve in practice, with Solana's maximum “real” TPS reaching 3,000 and Sui's maximum reaching 854 in July 2023, according to CoinGecko data.

“Sui has produced amazing technology, arguably the most impressive in space. But we've yet to see more than Solana in terms of performance and metrics like daily average TPS.” If Sui continues to attract users and capital to the ecosystem, this could become a reality soon.

Zimmerman argues that Sui has one major obstacle affecting long-term price action: token supply.

He pointed out that the Sue started in May 2023 when Tokinomics was “spread” with low-float and high fully-diversified value (FDV). As a result, only 27% of its total supply of tokens is in circulation, leaving existing investors exposed to heavy selling in the event of a future token launch.

In contrast, 80% of Solana's total token supply is currently in circulation.

SuiPlay0x1 game console

Another key bullish offering from Sui Networks is the soon-to-be-released handheld game console called SuiPlay0x1, which will be developed and distributed by Myston Labs, the main developer behind Sui.

Related: Sui blockchain taps radio waves to bank the unbanked offline

Expected to ship sometime next year, the console will come with a native “Eternals” non-fungible token (NFT) that unlocks exclusive rewards for users.

Zimmerman drew parallels to the Saga of the Sony console and Solana's first mobile device, which rewarded users with Airdrops that far exceeded the device's previous cost.

“That's the true value of the console for the target audience.”

However, even if Zimmerman Sui is able to find a balance against Solana in the so-called “L1 wars”, Ethereum is not in danger in the near future.

“Sui has a lot to offer in the competitive L1 landscape. The market continues to view L1s as ‘Ethereum competitors' other than Ethereum. […] In the post-US spot ETH ETF [exchange-traded fund] “The world has put Ethereum in a category of its own,” he said.

Sui is a layer-1 blockchain and smart contract platform that aims to simplify and improve the creation of applications and functions in the Web3 ecosystem. Its model is based on the Move programming language and enables parallel transaction execution.

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