Sui Mainnet Launch Approaching! An article to understand Sui's token economy and application methods

With the META-based Layer 1 public chain Sui set to launch its mainnet on 5/3, details of the native token SUI's economic model and application methods are closely watched by industry developers, investors, and ecosystem participants. As Sui prepares to go live on the mainnet, it once again explains the token economy to the community here.

Recap of the mainnet launch news: Sui will go live on the mainnet on 5/3, with nearly 100,000 names confirmed for the Sui Recognition Sale.

The Objectives and Participants of SUI Token Economy

The vision of Sui is to create a high-performance blockchain with low Gas fees, low energy consumption, and accessibility for everyone. This allows developers to expand applications on the chain in a cost-effective and easy-to-build manner, developing business models.

The target participants in the Sui economy include developers who create and modify applications; holders who pay Gas fees, participate in staking, and use applications; and validators who manage and verify transactions.

SUI Adopts DPoS Delegated Proof of Stake

Delegated Proof of Stake (DPoS) is similar to a stock mechanism, ranking validators based on the amount of SUI staked to select a fixed group of validators at different times. The advantage is to allow SUI holders to participate widely in network operations, processing and storing data in a more cost-effective, energy-efficient, and efficient manner. However, the downside is the issue of network power concentration due to fewer validation nodes and low voting governance participation.

SUI Gas Fee Pricing Mechanism

Sui's Gas price is determined by two mathematical rules to encourage validators to set a reference Gas fee price that is low but does not compromise network security. This pricing mechanism balances the price between users and validators, prevents spam and service attacks related to network security, and ensures low and predictable transaction costs on the Sui network.

SUI Storage Fund

As the most unique and important part of the Sui token economics, the Storage Fund is a validator reward mechanism. It prevents situations where users cannot afford large Gas fees in the future as blockchain data volume grows over time.

Specifically, when users pay Gas fees, they also pay a storage fee, which is deposited into the Storage Fund. This fund covers the cost for validators to store user data, subsidizing future storage costs as the network grows and matures, ensuring accurate pricing of data storage and preventing data storage from becoming burdensome for future users.

Notably, this storage model includes a "deletion option," where users receive a refund of the storage fee when deleting data on the chain, ensuring that only truly important and necessary data is retained on the chain, avoiding unlimited data expansion.

What Can SUI Tokens Be Used For?

SUI tokens have the following main uses:

1. Participating in staking: By staking SUI tokens with validators, protecting the security of the Sui blockchain and receiving staking rewards.

2. Used as Gas fees for executing transactions and operating applications.

3. Native assets for interacting with applications on the Sui blockchain, providing and supporting liquidity for the Sui blockchain.

4. Participating in on-chain governance and decision-making.

Through staking SUI tokens, individuals with a larger quantity have the right to vote, participating in project governance and development direction. Those who care most about Sui will have the greatest say and decision-making power.

Recalling the Sui IEO controversy: The Sui Foundation's native token IEO sparked community dissatisfaction, leading to a #SuiScam boycott trend on Twitter.