According to Cointelegraph, analysts from K33 Research suggest that the Sui Network could eventually rival Solana as a top alternative layer-1 network next to Ethereum. In a research note dated September 18, K33’s DeFi analyst David Zimmerman highlighted Sui’s performance relative to Solana, its architecture, and the upcoming release of a game console as factors that could make it a strong contender among alternative layer-1 networks (alt L1s).
Zimmerman noted that while Solana often dominates discussions in the L1 wars, Sui has shown significant gains. Specifically, while SOL/ETH gained 6% since August, SUI/SOL rallied 115% in the same period. He acknowledged that much of Sui’s recent outperformance, with its native token SUI gaining 36% in the last week, could be attributed to wider market mispricing. However, he believes SUI has the right ingredients to support its recent price increase.
On September 17, stablecoin issuer Circle announced the upcoming launch of its native USD Coin (USDC) on the Sui network, signaling further adoption and support from key industry players. Zimmerman explained that Sui has the technical capabilities to rival Solana, boasting a theoretical maximum of 297,000 transactions per second (TPS) compared to Solana’s 65,000. However, there is a significant difference between a network’s theoretical maximum TPS and its actual achievable TPS. Solana’s highest real TPS is closer to 3,000, while Sui’s highest reached 854 in July 2023, according to CoinGecko data.
Zimmerman pointed out that Sui has produced impressive technology but has yet to outshine Solana in practice and in terms of metrics such as daily average TPS. He added that this could change if Sui continues to attract users and capital to its ecosystem. However, Zimmerman also highlighted a major hurdle affecting Sui’s long-term price action: token supply. Sui was launched in May 2023 with low-float/high fully diluted value (FDV) tokenomics, resulting in only 27% of its total token supply being in circulation. This leaves current investors exposed to potential sell-offs when future token unlocks occur. In comparison, 80% of Solana’s total token supply is currently in circulation.
Another key offering from the Sui network is the upcoming release of a handheld gaming console called SuiPlay0x1, developed by Mysten Labs. Expected to ship next year, the console will come with a native “Eternals” non-fungible token (NFT), potentially unlocking exclusive rewards for users. Zimmerman drew parallels between Sui’s console and Solana’s first mobile device, Saga, which rewarded users with airdrops exceeding the device’s upfront cost.
While Zimmerman believes Sui could gain ground on Solana in the L1 wars, he stated that Ethereum is not in danger anytime soon. He emphasized that the market continues to view L1s other than Ethereum as “Ethereum competitors,” and in a post-US spot ETH ETF world, Ethereum is in its own category. Sui is a layer-1 blockchain and smart contract platform designed to simplify and improve the creation of applications and functions in the Web3 ecosystem, based on the Move programming language and enabling parallel transaction execution.
