Intro to Sui

Sui is a permissionless layer 1 blockchain designed to be both developer and user-friendly. It can support a wide range of application development with unrivaled speed at low cost.

Sui’s Key Technical Innovations
Other Important Features of Sui
Dynamic Fields
Dynamic fields allow greater flexibility for builders as they don’t only have to define fields as fixed types. These fields have arbitrary names and can be added and removed ad hoc. Dynamic fields also support heterogeneous types, making it possible to store un-like types within a certain object.
Various applications, such as games, make use of randomly generated numbers. Truly random numbers are important to ensure fair outcomes for app users. Sui supports the League of Entropy’s drand beacon, which delivers unbiased random numbers.
Package Upgrades
Sui smart contracts are represented by immutable package objects consisting of a collection of Move modules. Because builders require the ability to update their code and pull changes from other developers, the Sui network provides a method of upgrading packages while still retaining their immutable properties.
Sponsored Transactions
To process a transaction on Sui, a user must pay a gas fee. However, many users new to blockchains are unfamiliar with this concept and it can be a barrier to completing their transaction. To remove the friction of asking the user to pay the fee, sponsored transactions, enabled through gas stations, let the application pay the fee itself, never needing to reveal its existence to the user.
Display Standard
The Sui Object Display standard is a template engine that allows for the on-chain management of how an object displays off-chain. Display makes it possible to leave an interface unchanged while updating connected objects, eliminating extra gas fees. Of course, the Display Object can be updated as well. For example, a game might allow an item such as a sword to be upgraded. In this case, the Display Object for the sword might change.
Kiosk Standard
Kiosk is a primitive for building open, zero-fee trading platforms with a high degree of customization over transfer policies. It allows creators to issue policies with objects that give them the power to enforce any constraint on trades they desire, including royalty policies when an object is sold.
Zero Knowledge Proofs
Sui supports zero-knowledge proof (ZKP) as part of its cryptographic model. ZKP allows one party in a two-party transaction to accept a statement from the other party as true without needing additional information about the other party’s veracity.
Advanced Cryptography
Sui uses a multitude of major cryptography advancements to ensure the utmost level of security on the chain. These include attributes that allow developers to implement policy based key management without complex cryptography, enable verifiable randomness APIs, and faster proof verification.
With native supports for the OpenID Connect standard, users can create on-chain accounts with their existing web2 services that supports OpenID Connect such as Google, GitHub, Microsoft, Apple, Facebook, and many other. This means users will be able to access Sui without the need of private keys or mnemonics streamlining user onboarding at scale.

Sui makes efficient use of ZKPs over OpenID payloads to protect user privacy
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Sui’s Key Economic Innovations

Sui Economy’s Participants

The Sui economy has three main sets of participants: 

  • users who submit transactions to the platform to create, change, or transfer digital assets or interact with applications built on Sui
  • SUI token holders who either stake their funds to validators in order to secure the network and participate in governance or use them to pay fees to interact with assets and applications on the chain
  • validators who manage transaction processing and execution

These participants interact with each other in a variety of ways across the network and that interplay informs the three core components of Sui’s tokenomics: 

  • Sui’s Proof-of-Stake Mechanism ensures the incentives of SUI token holders are in line with Sui’s validators
  • Sui’s Gas Mechanism ensures the network charges low and stable gas fees to users no matter how much demand there is for activity on the network
  • Sui’s Storage Fund ensures data storage is priced accurately so data stored today doesn’t burden future users of the network

And the glue that holds the whole system together is the SUI token, Sui’s native asset.

The SUI Token

SUI tokens serve four purposes on the network:

  • They can be staked to a validator in order to secure the network and earn stake rewards. 
  • They can be used to pay gas fees to execute transactions and other operations. 
  • They act as the native asset to facilitate on-chain transactions underpinning the whole Sui economy.
  • They give holders the right to participate in future governance. 

The total supply of SUI is capped at 10 billion tokens.

Sui’s Use of Delegated Proof-of-Stake

Within each epoch, a fixed set of validators are responsible for operating the network. This set is chosen based on the amount of SUI tokens staked to the validator. With Delegated Proof-of-Stake (DPoS), Sui allows for the broadest possible participation of token holders in network operations. Importantly, by using staked SUI token amounts as a proxy for voting power, the right degree of “skin in the game” is established—those who care most about the network’s future get a larger voice in its current operations.

Most SUI token holders will not have the funds, ability, or desire to run a validator but want to participate in securing the network. To do so, they “back” a validator they believe to be a good actor by delegating their tokens to that validator’s stake. These delegated tokens help the validator reach the minimum amount needed to be part of the active set of validators for the epoch. The tokens are locked for the epoch, meaning they can’t be transferred or sold. 

In exchange for operating and securing the network, the validator receives staking rewards in the form of SUI tokens. The rewards are distributed to all token holders who delegated to that validator’s stake, minus a small commission fee paid to the manager of the validator.

Sui’s Gas Pricing Mechanism

Sui’s gas pricing mechanism achieves several important outcomes: 

  • delivering users with low, predictable transaction fees
  • incentivizing validators to optimize their transaction processing operations; 
  • preventing spam and denial of service attacks.

Sui can deliver predictable transaction fees because validators agree via survey on a network-wide reference price at the start of each epoch. Validators each state the minimum price they would be willing to take to process a transaction. These prices are ordered by the protocol and a reference price is selected at which a quorum of validators necessary to run the network are willing to promptly process transactions. 

Validators are incentivized to propose credible prices since the network uses the Tallying Rule to determine which validators are processing transactions at the current gas price. Validators evaluate one another’s performance during the epoch, establishing a multiplier for the stake rewards of other validators. If a validator is slow or non-performant, then the Tallying Rule can be used to slash that validator’s rewards. The Tallying Rule’s thus creates a community-enforced mechanism for encouraging validators to honor the reference gas price.

Unlike gas fees, storage fees are set through governance proposals to stay on par with the cost of off-chain data storage. As the costs of off-chain storage declines over time, governance proposals will update Sui’s on-chain storage fees to reflect the new target price.

Sui’s Storage Fund

A blockchain network is not static. The validators who write transactions to the chain today may not be the same as those who will store the data in the future. Because the amount of data grows over time, if users only paid the fees needed at the time of a transaction, future users would pay disproportionately high fees, discouraging use of the network.

To solve this problem, Sui’s Storage Fund redistributes past transaction fees to future validators. Users pay upfront for processing and storage and the storage fees are deposited in the Storage Fund. These funds are considered when distributing stake rewards and are used to adjust the share of rewards distributed to validators. If storage requirements are high, validators receive additional stake rewards to cover additional costs, and vice versa when requirements are low. This ensures that validators are adequately compensated for their costs of holding data in storage.

Sui’s storage model also has a “delete option” by which users can obtain a storage fee rebate when they delete previously stored on-chain data. It is expected that users will delete data whenever storage no longer makes financial sense, preventing unending growth of storage needs. Sui thus offers the best of both worlds: the ability for users to store on-chain data while incorporating a market mechanism ensuring that only data that is worth storing is actually kept on Sui.

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A Note on Governance
Eventually, protocol upgrades and other Sui governance changes will be passed through on-chain voting proposals. The SUI token will give any token holder the ability to participate in this process by staking to a validator. In that way, the future decisions of the network are controlled by the decentralized community.