Many people say Sui has no innovation and will not succeed by relying on liquidity subsidies
Here is a metaphysical mistake
First, we need to consider why the subsidy is needed. The subsidy can be for:
1. Brushing data, such as the current TVL game, Pointfi points plate
2. Using subsidies as a cover to conduct OTC
The first one needs no explanation. Many people only understand the second logic as disguised shipment. But in fact, if you want to have a money multiplier effect, there must be enough TVL invested in liquidity, that is, LP or Lending, so as to trigger enough on-chain arbitrage transactions.
The biggest difference between Sui’s subsidy and TVL methods like Restaking or layer2 is that he gives the reward incentive to liquidity, which generates a large number of transactions and fees.
If it weren’t for the existence of this layer, Sui’s on-chain liquidity would be insufficient and the meme season would be impossible. If you have experienced Sui before October 23, you will deeply understand this.
Secondly, because of compliance, it is difficult for Sui to do OTC, so the wild dealers cannot get low-priced chips, and naturally have no motivation to do split-up, even if Sui shows very strong upward potential. This is also the reason why most split-up plates are first dividend plates, because only when the chips are distributed, others will have the motivation to split
Finally, it is already 2024. If innovation is useful, then ETH has been innovating year after year, with restaking and farcaster emerging one after another, but are they useful for prices? The Telegram mini app is a great leap forward, but has the liquidity on the TON chain improved at all?
Therefore, there is no absolute positive correlation between innovation and market value or price in crypto. Many innovations have nothing to do with liquidity. The logic of the market and liquidity is objective. Doing things that conform to this logic is positively correlated with market value.
