What Is Sui (SUI) and How Does It Work?

What Is Sui (SUI)?

Sui is a permissionless Layer 1 blockchain. That means it is an independent network where developers can build smart contracts and on-chain applications. You can think of it as its own blockchain, like Ethereum. So you do not need permission from a central party to use the network, and the platform is designed to process transactions quickly and securely.

Sui stores assets, resources, and other data as objects. You can think of an object as a digital item with its own data, an owner, and a history of changes. This object model is an important part of how Sui processes transactions.

SUI is the network's native token. You use SUI, among other things, to pay transaction fees. In addition, SUI can be delegated to validators for staking, and the token gives voting rights in on-chain governance, such as proposals for protocol upgrades.

Sui Mainnet went live publicly on May 3, 2023.

Key Takeaways

• Sui is a Layer 1 blockchain for smart contracts and on-chain applications.
• SUI is the token for fees, staking, and on-chain governance.
• The network treats assets and data as objects with a clear owner and version.
• Independent transactions can be processed in parallel.
• Transactions involving the same shared object must be ordered through consensus.

How Does Sui Work?

Sui uses delegated proof of stake. In this system, validators help the network verify and process transactions. Validators lock up SUI as collateral. SUI holders can also delegate their tokens to a validator. A validator's voting power depends on the total stake assigned to that validator.

Together, the validators form a committee. That committee does not change during an epoch, a fixed period that lasts about 24 hours on Sui Mainnet. Important decisions require more than two-thirds of the total voting power. That is called a quorum.

When you send a transaction, you first sign it with your wallet. The transaction then reaches validators through a full node. They check, among other things, the signature, the objects used, whether you have permission to use those objects, and whether you have enough gas budget. Gas is the fee for executing a transaction.

For consensus, Sui uses Mysticeti. This is a DAG-based consensus protocol. A DAG here is a structure where validators can make multiple proposals side by side instead of processing everything strictly one by one.

Accepted transactions are executed by validators in the same predetermined way. So a transaction either succeeds completely or fails. If it fails, the gas fees used may still be charged.

A transaction becomes final when its effects are certified by a quorum of validators, or when the transaction is included in a certified checkpoint. Simply put, the network has then confirmed enough that the outcome is locked in.

Sui (SUI) Overview

What Is Sui's Object Model?

An object is Sui's basic storage unit. Think of a token, a digital asset, or other data on the blockchain. Every object has a globally unique ID, an owner, a version number, and information about the last transaction that used the object.

That version number changes with every update. Because of that, a sender and validators can refer to exactly the same version of an object. For this, a transaction includes an object reference with an ID, version, and hash. A hash is a unique digital checksum of data.

Sui has different types of objects:

• Address-owned objects: these belong to one specific address. Only that address can use them in transactions.
• Shared objects: these are accessible to everyone. If someone wants to change them, consensus has to decide the order of changes.
• Immutable objects: these have no owner and cannot be changed, transferred, or deleted.

Smart contracts on Sui are written as Move packages. Such a package can create and manipulate objects according to the rules defined in it. A published package object is immutable and cannot be deleted.

One practical difference is important: with an immutable object, you cannot later delete or reduce data. Because of that, you also cannot receive a storage rebate for those objects. A storage rebate is a partial refund of storage costs paid earlier.

How Does Sui Process Transactions in Parallel?

With a Sui transaction, it must be clear in advance which input objects are being used. That lets the network see which transactions are separate from each other and which transactions compete for the same object.

If two transactions use different objects, they can be scheduled and executed in parallel. You can think of it like two people doing something with their own stuff at the same time: they do not have to wait for each other.

For address-owned objects, no global consensus order is needed if transactions are independent. That makes it possible to process those transactions side by side.

Things work differently when multiple transactions want to change the same shared object. Then consensus first has to decide which transaction gets priority and what the next version of that object will be. Once the needed versions are fixed, Move transactions can be executed in parallel again, even across multiple cores.

So parallel processing does not mean every transaction always finishes just as fast. Many transactions involving the same shared object have a shared dependency and therefore have to be ordered first.

Conflicting transactions involving the same address-owned object can also cause problems. In that case, a transaction may be rejected, or the object may be temporarily unusable until the next epoch.

Who Founded Sui?

The first parts of Sui were conceived in 2021 by Evan Cheng, Adeniyi Abiodun, Sam Blackshear, George Danezis, and Kostas Chalkias. The idea built on research they had previously worked on at Meta for Diem, a project that was called Libra before that.

The five are also co-founders of Mysten Labs. Mysten Labs developed the original Sui code and was the first contributor to the network.

Evan Cheng is co-founder and CEO of Mysten Labs. Sam Blackshear is co-founder and CTO. Adeniyi Abiodun is co-founder and CPO, Kostas Chalkias is co-founder and Chief Cryptographer, and George Danezis is co-founder and Chief Scientist.

Sui itself is a permissionless network, not a company. So the roles at Mysten Labs do not mean these people own or currently run the network.

What Are the Benefits of Sui?

Sui has a number of features that are useful to understand:

• Parallel processing of independent transactions. Because transactions explicitly list their input objects, the network can see which transactions can run separately.
• Clear object state. Objects have a unique ID and version number. That means transactions refer to a specific state of an object.
• Explicit ownership model. An object can be privately owned, shared, or immutable. That makes it clear how an object may be used.
• Move for on-chain objects. Move is designed for packages that manipulate objects on the blockchain.
• Fixed maximum supply. There can be at most 10 billion SUI.
• Delegated staking. You can delegate SUI to a validator without handing over your private keys or direct ownership of your tokens to that validator.
• Partial storage rebate. When removable data is deleted or reduced, part of the storage costs paid earlier can be returned.

What Are the Downsides of Sui?

Sui's design also comes with clear trade-offs:

• Shared objects need consensus. If many transactions want to change the same shared object, they cannot all be processed fully independently.
• Conflicts around address-owned objects. Many conflicting transactions involving the same object can be rejected or can make the object unusable until the next epoch.
• Storage costs money. In addition to execution gas, you also pay storage costs when you create or change objects with data on the blockchain.
• Not all storage costs come back. If data is deleted later, only part of the storage costs can be recovered.
• Immutable objects are permanent. They cannot be changed or deleted and do not earn a storage rebate.
• Voting power follows stake. Within delegated proof of stake, a validator's influence depends on the stake delegated to it.
• Keeping history takes storage space. Full nodes that store the full object and transaction history need a lot more storage capacity than validators or pruning nodes.

Conclusion

Sui is a Layer 1 blockchain for smart contracts and on-chain applications. The SUI token is used for transaction fees, staking, and governance.

The core of Sui is the object model. Assets and data are treated as objects with an owner, version, and unique ID. That lets the network see in advance which transactions are independent and process them in parallel.

That does not work for everything at once. Transactions that want to change the same shared object must be ordered through consensus. Working with on-chain objects also brings storage costs and possible conflicts around the same object. So Sui combines parallel processing where it can with consensus where multiple users want to change the same data.