Sui has rapidly emerged as a high-performance Layer 1 blockchain, prioritizing scalability, minimal transaction fees, and user-centric design. Since its inception by former Meta engineers in 2022, the network has attracted significant institutional investment and growing activity across decentralized finance (DeFi), gaming, and digital payments.
A standout feature of this expansion is the explosive growth in its stablecoin market. In just over a year, the total stablecoin supply on Sui surged from $5.42 million to over $551.5 million—marking one of the fastest growth rates in the Web3 space. This growth is fueled by Sui’s technical advantages, rising user adoption, and strategic liquidity incentives.
This article explores the factors behind Sui’s liquidity boom, its unique technological architecture, leading stablecoins, and emerging use cases beyond DeFi.
Understanding Sui’s Object-Based Model
Unlike traditional account-based blockchains like Ethereum or BNB Chain—where balances are stored as ledger entries—Sui uses an object-based data model. In this system, every asset—including user wallets, tokens, and NFTs—is treated as a distinct object with unique attributes and ownership properties.
This approach offers several advantages:
- Granular State Tracking: Each transaction creates a new version of an object, enabling a full, transparent audit trail of all changes.
- Flexible Transactions: Partial transfers may result in new objects being created, offering more granular control over assets.
- Enhanced Scalability: The model supports high throughput and low-latency finality, making it suitable for high-frequency use cases like payments and gaming.
However, this object-based approach also introduces complexity in tracking and aggregating asset balances across the network, necessitating advanced indexing solutions.
The Role of Advanced Indexing in Data Accuracy
Accurately measuring metrics like stablecoin supply and liquidity distribution on Sui requires sophisticated data infrastructure. Specialized indexing providers step in to interpret the chain’s object-based structure.
These systems perform several critical functions:
- Object-Level Balance Reconciliation: By scanning all objects associated with a wallet and retaining only the latest versions, real-time balance visibility is achieved.
- DeFi Liquidity Mapping: Custom objects from protocols like lending pools or AMMs are identified and normalized into standard data models.
- Handling Exceptions: Special cases, such as locked or staked tokens, are correctly categorized to avoid misrepresenting liquid supplies.
This technical groundwork enables reliable reporting of Sui’s stablecoin economy, including supply growth, holder distribution, and protocol-level liquidity.
Sui’s Growth and Ecosystem Composition
Sui has demonstrated remarkable growth across several key metrics:
- User Adoption: The network recorded over 7.5 million new accounts in a single week—a increase of 104.91%.
- DeFi Expansion: Total value locked (TVL) reached $1.26 billion, led by protocols like Suilend.
- Transaction Volume: The network has processed over 8.49 billion transactions, with consistent day-over-day growth.
- Stablecoin Pairs on DEXs: Pairs like USDC/SUI dominate trading volume, highlighting demand for dollar-denominated assets.
Notably, Sui’s daily active user count has surpassed Ethereum’s and is competitive with other fast-growing L1s like Aptos.
Leading Native Stablecoins on Sui
Stablecoin adoption on Sui is diverse, with both centralized and decentralized issuers gaining traction.
USDC: Issued by Circle, USDC is the largest stablecoin on Sui, making up nearly half of the total market. Its growth is driven by trust in the brand, regulatory compliance, and seamless cross-chain mobility.
AUSD: An algorithmic stablecoin backed by over-collateralized crypto assets. It is widely used within lending protocols and liquidity pools due to attractive yield opportunities.
USDY: Another decentralized stablecoin, known for its high yield offerings in decentralized exchanges. It maintains its peg through crypto collateral and automatic liquidation mechanisms.
Other notable entrants include FDUSD and BUCK, which have also seen increased adoption through gaming and specialized DeFi integrations.
Use Cases Driving Stablecoin Demand
Decentralized Finance:
Lending platforms like Suilend and DEXs such as Cetus use stablecoins as primary assets for lending, borrowing, and liquidity provision. High annual percentage yields (APYs) continue to attract capital.
Gaming and Rewards:
Projects like SuiPlay0x1 aim to integrate blockchain-based rewards into mainstream gaming. Players can earn and trade in-game assets priced in stablecoins, enabling real-world value transfer.
Payments and Financial Inclusion:
Sui’s low transaction costs and high throughput make it suitable for payment solutions—including those accessible via SMS. This opens opportunities for unbanked populations to use stablecoins for remittances and peer-to-peer transactions.
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Holder Distribution and Concentration
Analysis of holder patterns reveals that large holders (“whales”) still dominate stablecoin ownership on Sui. For example:
- Nearly half of all AUSD is held by a single address.
- Similarly, USDY is highly concentrated, with two wallets controlling over 90% of the supply.
This concentration suggests that yield-seeking institutions and large players are driving much of the current activity—though ongoing ecosystem growth may gradually decentralize ownership.
Comparative Position Among L1 Blockchains
When compared to other major Layer 1 networks, Sui stands out in several areas:
- Throughput and Cost: Sui offers lower fees and faster finality than Ethereum, making it better suited for high-frequency stablecoin transactions.
- Architecture: Its object-based model provides greater flexibility than account-based systems, though it requires more sophisticated data tooling.
- Adoption Momentum: While still smaller than Ethereum or Solana in total stablecoin supply, Sui’s growth rate is among the highest in the industry.
Frequently Asked Questions
What makes Sui different from other blockchains?
Sui uses an object-centric data model instead of a traditional account-based system. This allows for higher scalability, lower latency, and more flexible asset management—though it requires adapted tools for analytics and indexing.
Which stablecoin is most widely used on Sui?
USDC is the dominant stablecoin, making up nearly 50% of the total market. Its trustless nature, regulatory clarity, and cross-chain compatibility contribute to its popularity.
Can stablecoins on Sui be used for payments?
Yes. Stablecoins are increasingly used for payments—both online and in settings requiring financial inclusion. Sui’s low transaction fees and fast settlement support these use cases effectively.
Is Sui suitable for DeFi activities?
Absolutely. With over $1.2 billion in TVL and protocols offering competitive yields, Sui has become a compelling destination for decentralized finance participants.
How does Sui ensure the stability of its algorithmic stablecoins?
Protocols like AUSD use over-collateralization and automatic liquidation mechanisms. If the collateral ratio falls below a threshold, positions are liquidated to maintain the peg.
What is the future of stablecoins on Sui?
Expect deeper integration into gaming, enterprise payment solutions, and cross-chain DeFi applications. Continued technical upgrades and ecosystem incentives should drive further adoption.
Conclusion
Sui has positioned itself as a competitive Layer 1 blockchain through technological innovation, strategic ecosystem development, and rapid stablecoin adoption. Its object-based model offers distinct advantages in scalability and flexibility, while its growing suite of applications—from DeFi to gaming—creates sustained demand for stable digital assets.
As Sui continues to expand into global payments, gaming economies, and innovative financial products, stablecoins will play a central role in providing the liquidity and stability needed for mainstream adoption.