Deep Review About Sui Network You Need To Know In 2024

Sui stands out from other blockchains due to its unique characteristics. The ideas discussed in this section offer a foundation for understanding the Sui blockchain and the broader concept of web3.
The blockchain known as Sui takes its name from the Japanese word for water, pronounced as swē in English. This influence can be seen in various aspects of Sui, such as the name of the blockchain itself, its native tokens (SUI and MIST), and the imagery used in its branding.

The Sui Blockchain Protocol

Sui is categorized as a Layer 1 protocol blockchain, which implies that it independently handles the consensus and validation of transaction blocks within its network. Similar to Ethereum (ETH) and Bitcoin (BTC), Sui utilizes its own native token (SUI) for these processes.
In contrast, Layer 2 blockchains utilize the existing infrastructure of Layer 1 networks and depend on the Layer 1 blockchain to complete transaction blocks. A prime example of this is Polygon (MATIC), which is a Layer 2 blockchain that extends the capabilities of Ethereum.

Tokenomics

SUI tokenomics refers to the economic model and distribution of the SUI token within a blockchain ecosystem. The native asset on the Sui network is referred to as SUI. The token is specifically denoted with a capitalized version of SUI to differentiate it from the overall Sui network.
The maximum amount of SUI tokens that will ever exist is 10,000,000,000 (ten billion tokens). At the launch of the Mainnet, a portion of the total supply of SUI tokens became available for immediate use, while the remaining tokens will be gradually released over time or distributed as rewards for stakeholders in the future.
The SUI token has four primary functions within the Sui network:

• SUI tokens can be staked in order to actively participate in the proof-of-stake mechanism.
• SUI tokens serve as the currency used to cover the gas fees associated with executing and storing transactions or performing other operations on the Sui network.
• SUI tokens are a flexible and easily tradable asset that can be used for multiple purposes within the Sui network. They can function as a form of currency, serving as a unit of account, a medium of exchange, and a store of value. Additionally, SUI tokens can be utilized for more advanced capabilities enabled by smart contracts, such as interoperability and composability across the various applications and systems within the Sui ecosystem.
• The SUI token plays a crucial role in governance by granting holders the right to participate in on-chain voting. This allows token holders to have a say in important matters, such as protocol upgrades and other significant decisions within the Sui network.

Staking and Unstaking

Sui employs a Delegated-Proof-of-Stake (DPoS) mechanism to ensure the security and functionality of its network. In this system, the voting authority of a validator is determined by the stake delegated to them by SUI token holders. The greater the stake delegated to a validator, the higher their voting power. Validators are responsible for processing transactions and reaching consensus, and they are rewarded with a portion of the gas fees collected. These rewards are subsequently distributed among token holders as staking rewards.

Staking

To stake your SUI tokens, you can send a transaction to the network that executes the staking function within the Move package. This transaction creates a stake object which holds your SUI tokens and includes details like the validator staking pool ID and activation epoch of the stake. With the implementation of SIP-6, you now have the opportunity to participate in liquid staking protocols using these staked objects.

Unstaking

Just like when staking, users can withdraw their stake from a validator by initiating a transaction that triggers the unstaking function in the system Move package. This transaction involves unwrapping the stake object and returning both the principal amount and the accumulated rewards to the user in the form of SUI tokens. Rewards are only earned during epochs where the stake remains active throughout the entire epoch. The amount of rewards withdrawn from the validator's rewards pool is determined based on the activation epoch and unstaking epoch of the stake.

Selecting a validator for staking

When staking on Sui, it is necessary to select a validator to stake with. The choice of validator can affect the amount of staking rewards received. Various factors, including but not limited to, play a role in determining the reward amount. such factors are;
Validator commission rate: A validator has the option to set a commission rate, which represents the percentage of staking rewards they will receive from stakers. For instance, if a validator's commission rate is 10%, they will receive 10% of every staker's staking rewards. It's important to note that validators can change their commission rate at any time without prior notice.
Validator performance: If a validator performs poorly, they may face punishment according to the tallying rule. Punished validators will not receive any staking rewards for the epoch in which they are punished. Additionally, if you withdraw your stake from a punished validator, you will not receive the rewards for that particular epoch either.

Bridging On Sui Network

Bridging involves transferring tokens from one blockchain to another. When using a bridge to transfer tokens between incompatible blockchains, the tokens are wrapped by the bridge. This wrapping process converts the tokens into a derivative token that is compatible with the target blockchain. With bridging, you can bring tokens from other blockchains into SUI or send SUI tokens to other blockchains.
SUI enables bridging functionality through two components: Wormhole Connect and Wormhole Portal Bridge. These components facilitate the transfer of tokens between different blockchains by wrapping them and making them compatible with the target blockchain.

Conclusion

It can be concluded that the Sui network is designed to enable interoperability between different blockchains through the use of Wormhole Connect and Wormhole Portal Bridge components. With the aim to enhance the connectivity and compatibility of various blockchain networks, ultimately promoting seamless and efficient token transfers.