Authors: Liu Honglin, Zheng Hongde
Every Thursday at 8 o'clock, the tavern opens on time. From investment jargon, entrepreneurial stories, project ups and downs, to hot topics, airdrop routines, track predictions... We use the AMA method to talk about what you want to hear, and big names gather! There is no limit to the topic, and you can easily talk about Web3! In the face of changes in regulatory policies and sudden compliance trends - don't panic! Mankiw's senior lawyers will personally interpret hot regulatory events for you and help you understand the trends!
The pub is open, please introduce yourselves, guests!
Little Penguin Api:
Hello everyone, I am Little Penguin Api. I entered the circle as an Ethereum miner in 2017 and worked in the largest exchange and mining company in Taiwan. Currently, I am the co-founder of the traditional Chinese blockchain brand DA Labs and the DA Trader Alliance. I can be regarded as a senior Shui family member and I am deeply involved in many Sui ecological projects. I personally do not consider myself a Builder. Seniors like Kyrie are the real Builders, and I am more like a Sui enthusiast.
In 2023, I participated in the public sale of Sui on OKX, entering the market at a price of 0.1, and then gradually increased my position during the market wash, becoming a Shui family member. From 2024 to date, I have continued to participate in offline activities, online projects and airdrop opportunities in the Sui ecosystem, and have deeply experienced projects such as Types, Navy, Cetus, Haedal, and SuiPlay.
I really like the atmosphere of Sui ecosystem on Twitter, whether it is the English or Chinese community. This ecosystem is full of diverse voices, but very united. Whenever there is a boom, everyone will actively participate and show great enthusiasm. I am honored to be a part of this ecosystem's rise and I love it deeply.
Kyrie:
I’m Kyrie, and I’m currently working at Typus Finance. My opportunity to enter the Sui ecosystem is related to FTX. Before the FTX incident, I was in charge of blockchain investment management at a family office and participated in an options project based on Solana. However, the project encountered the FTX incident shortly after it went online, which led to the depletion of on-chain liquidity. The family office also completely withdrew from the cryptocurrency field after the FTX incident, and our cryptocurrency team was therefore facing dissolution. Fortunately, led by our CEO Tommy, the core partners reorganized the team and continued to look for development opportunities.
Since we have development experience on Solana, the team hopes to find an ecosystem that can continue our technical accumulation, especially our expertise in the Rust programming language. After communicating with the founding teams of Aptos and Sui, we believe that Sui is more in line with our philosophy and finally chose Sui.
We entered the Sui ecosystem for development very early. The Sui mainnet was launched in May two years ago, and we officially started development in January of that year, focusing on the derivatives track. In the first two years, we mainly developed option products, and launched perpetual contracts in April this year. Our product design concept attaches great importance to transparency, so we try to put all operations on the chain as much as possible. We can talk about the details in depth later.
Dongdong Robin:
Teacher Kyrie shared how he entered the Sui ecosystem and became a senior Sui family member. He also mentioned the recent hot track of on-chain derivatives. Next, please let Teacher Miao introduce himself. Teacher Miao is a guest author of Mankiw. Although I have always read Brother Miao’s articles, this is our first time to communicate on Space.
CryptoMiao:
Hello everyone, I am CryptoMiao. Frankly speaking, I dare not call myself a teacher because I entered the cryptocurrency circle relatively late, almost at the end of 2022, because ChatGPT was launched and required U card payment, which was slightly earlier than the start of Sui ecology. After entering the circle, I graduated from finance and economics and have a lawyer qualification certificate. I previously engaged in stocks, options, foreign exchange, futures and other investments in the Web2 field, and also cooperated with Mankiw to conduct Web3 related research. After entering the cryptocurrency circle, I began to learn proprietary knowledge, such as slippage, V3 pool, wear and tear, etc., while watching project white papers and YouTube tutorials.
In 2023, I participated in the Sui public sale through OKX at a price of 0.1 and purchased 10,000 Sui. At that time, Sui had just been launched (May 2023), and there were few DeFi and DApp applications. The price on the first day was about 0.8, and I cleared my position at a similar price. Later, as a user, I began to evaluate the Sui chain ecosystem. With the gradual development of DeFi and DApp projects such as Typus, Navi, and Scallop, I returned to the Sui ecosystem. Previously, I was mainly active on EVM chains such as Solana and Ethereum.
I like to share my thoughts through writing, analyze DeFi and investment products in the Sui ecosystem on Twitter, explore how to combine strategies to achieve maximum returns, and help build Sui's Web3 community. For me, Web3, especially the Sui ecosystem, has opened up new opportunities. Compared with Web2, Web3 provides many tools that were originally only available to investment banks or institutions, such as Pandle-like PY/PT products or stock options. On the chain, as long as there are assets pledged and signed, these tools can be used, which makes me feel like a duck in water.
In the process of learning and participating, I got to know Kyrie through YouTube, for example, I saw him on Nao Ge's show. I experienced Web3 while writing reviews, and gradually became a bit like a Web3 reviewer, helping more people understand the Sui community and ecology.
Q1: Why choose to build on SUI instead of other public chains? Compared with other L1 public chains, what are the advantages of Sui?
Little Penguin Api:
I mainly play Sui, followed by Solana, and I want to compare the two. To me, Solana is like a free-growing, wildly developing ecosystem, while Sui has Mysten Labs like a gardener, preparing the soil, irrigation system, and nutrient fertilizers, providing the basic elements for the growth of the ecosystem.
For example, DeepBook is an on-chain order book protocol, and zkLogin allows users to quickly enter the ecosystem directly with a Google or Twitch account, skipping the complex content that needs to be understood in the traditional encryption field, such as mnemonics. Through these infrastructures, Mysten Labs has laid the foundation for the vigorous development of the entire ecosystem.
We can see that many applications in the Sui ecosystem benefit from the basic support provided by Mysten Labs to improve the protocol. This thoughtful preparation lowers the entry threshold for both project owners and users, allowing more people to quickly integrate into the Sui ecosystem and participate in playing or investing.
Kyrie:
My path started from Ethereum, then entered Cosmos, then Solana, and then Sui. This process reflects my transformation experience of product iteration. In Ethereum, what I couldn’t stand the most was the high gas fee, so I started looking for a public chain with lower costs, and then came into contact with Cosmos and Solana.
In Cosmos, I think its design is reasonable because it separates independent chains and connects them in series through cross-chain bridges, providing lower transaction costs. Especially through the IBC protocol, cross-chain operations are relatively safe. However, the Cosmos ecosystem is relatively decentralized, the project growth is slow, the overall atmosphere is too Buddhist, and there is a lack of strong teams and products. After that, I turned to Solana. I like its low cost and high speed, but the disadvantage is that it often goes down. The downtime problem is particularly difficult when developing a project, especially for our investors. They will ask: If you do option trading on Solana, how to clear it if the customer encounters a 12-hour downtime during operation? This question has been repeatedly questioned by many VCs, and it is difficult for us to give a satisfactory answer. Therefore, when looking for a high-performance public chain, stability becomes our key consideration.
After experiencing a series of public chains, I found that there are problems with the authorization mechanism. On traditional chains, you need to authorize one by one after connecting to the wallet. If the project is hacked or there is a problem with the smart contract, the user must urgently cancel the authorization, which is cumbersome and unreasonable. On Sui, there is no concept of authorization. Even if attacked, hackers can only affect the assets in the liquidity pool and cannot touch other assets in the wallet.
For me, this design is more in line with human nature. Among the many high-performance public chains, I think Sui is the most reasonable choice at present, no one else. It solves the authorization problem and meets the speed requirements. No other public chain can match it. After two years of development on Sui, although there are occasional disappointments, the answer is obvious: if not Sui, should we use Ethereum or Polkadot? There are not many public chains that can be compared with Sui, and my confidence in Sui continues to grow as the development progresses.
CryptoMiao:
From a user's perspective, I agree with Kyrie that Sui's performance is unique. Compared with the EVM chain, EVM requires an authorization process for transactions. For example, to participate in the Alpha airdrop, you need to earn points, and you have to authorize it every time. You also have to worry about the project being hacked and needing to cancel the authorization, which is accompanied by high fees, wear and tear, and slower transaction speeds.
I entered the circle late and am used to Web2 payment systems in my life, such as Alipay or WeChat Pay. When using Ethereum, I need to check the low gas fee period for each interaction, which is incredible. The delivery cost of Sui's tokens is basically less than 1 cent. In addition, through interviews with Evan, Adannie and Kyrie on the Brain Brother program, I learned about the investment philosophy and development direction of the Sui Foundation.
As an investor, I hold Solana, Ethereum or Sui tokens, which is equivalent to investing in the "stock" of this chain. When choosing a public chain, I mainly look at the founder. In the secondary market, investment companies are essentially investing in people, and it depends on whether the founder is willing to devote himself to the project. Evan said in an interview that he is more likely to die at his workstation than fall off a horse, which reflects his investment in Sui. On the other hand, looking at the recent popular new public chains, such as Xiong Chain, from social media and interviews, the founders lack clear goals and lofty ideals, and I am not optimistic about their prospects.
I want to thank public chain builders like Kyrie and Little Penguin. When Sui's CB price was less than $1, I was almost the only user in the Chinese community on Twitter, and all I contacted were project personnel. I think if a chain is not easy to use, there won't be so many builders. Builders are the first-level users of the chain and know the pros and cons of the chain best. If a chain has many users of a certain product but few builders and few product types, it means that it is only suitable for a specific field and lacks greater ambition.
From my personal experience, after using Alipay and WeChat Pay, I cannot accept the interaction method of EVM. Just like you will not go to offline stores after using Taobao, Sui is a dimensionality reduction attack on other public chains. Once you use Sui, you can't go back to other chains. Kyrie mentioned that Sui rarely crashes, and there is a joke that Sui "only crashed once". That time it was a code bug, not an underlying logic problem, which may be avoided after repair. Solana's crash was caused by an underlying logic bug, which may be difficult to completely avoid.
Dongdong Robin:
Recently, I have also paid close attention to the data of "daily active developers" of public chains. If a public chain has many users but lacks developer projects, the prospects are worrying. There is another particularly interesting angle. Miao and Kyrie both talked about whether investors are willing to invest in a public chain. Kyrie pointed out that if the public chain frequently crashes, investors may be suspicious. Miao also mentioned that if the public chain lacks a strong driving force (such as the Sui Foundation), investors may be unwilling to enter the market.
Meg:
Initially, I was a user of the Cosmos ecosystem. I found its IBC cross-chain protocol, modular design, and transfer speed very easy to use, and the cross-chain experience was also good. However, in this round of bull market, the Cosmos ecosystem performed poorly.
You may have noticed that the Cosmos ecosystem is not like Ethereum's "Zhou Tianzi" model, but a more decentralized approach. Biquan once shared an ecological map to show its "decentralization" philosophy: each project focuses on different advantages and develops independently. However, this round of secondary market performance is not satisfactory. Except for the short-term rise of Celestia (TIA) launched in 2023, other projects have almost no highlights. The entire ecosystem seems scattered and lacks cohesion.
Cosmos attracts users and developers through staking, but it also causes controversy. For example, some founders cashed out the staked ATOM through other means, which triggered a strong response from the community and dealt a heavy blow to the confidence of builders and investors. In addition, the frequent selling of coins by ATOM founder Jae Kwon, just like the Ethereum Foundation's selling of coins that caused the market to fall, brought negative emotions to the community. I used to participate in ATOM staking to get airdrops, but by the end of 2023, I unstaked all ATOMs and stopped paying attention to the Cosmos ecosystem. I think it's a pity. Its concepts such as modularity and IBC are excellent, but they have failed to fully realize their potential.
The core problem is the lack of ecological cohesion. In the early stages of the rise of the ecosystem, efforts should be focused on building viable projects to attract more developers, similar to the path of centralization first and then decentralization. However, Cosmos was too decentralized at the beginning, and it was difficult to gather strength to launch outstanding projects later. Early projects such as Osmosis, Secret Network, and Akash had potential, but now their voices are fading, which is regrettable.
I want to share this brief experience of Cosmos and discuss your views on Cosmos. Do you also feel "sorry for its misfortune and angry at its lack of struggle"? That's all I'll share.
Kyrie:
Let me add two reasons for the failure of Cosmos: first, the token economic model was poorly designed; second, there was a lack of dominant power.
When using IBC to cross chains, the fees generated will be attributed to ATOM tokens. However, if there is no cross-chain, no matter how many transactions are made on a single chain built on the Cosmos SDK, they have nothing to do with Cosmos tokens, which is the key to its failure.
The second problem is that there is no centralized business strategy formulation organization. No one has heard of the term Cosmos Foundation, which shows that it lacks the guiding power of Mysten Labs or Sui Foundation. Cosmos and Polkadot are to some extent advocates of high decentralization, but some people understand decentralization as doing nothing, believing that as long as the product is good, users will come naturally. They believe that users should use it if they provide high-quality public goods and facilitate the deployment of protocols. However, the best market strategy in the currency circle is the wealth-creating effect: one person makes money, which drives ten people, ten people make money, which drives a hundred people, and the process is passed on layer by layer to attract users. The core of the rise of Bitcoin, Solana and other ecosystems lies in the wealth-creating effect, which is the fundamental reason for attracting users in the long run. No matter how good the story is, it will be useless without the wealth-creating effect.
If the price of Sui had remained at one dollar, it would not have received the attention it has today. Its essence still relies on the wealth-creating effect. Many Sui developers have fallen into the misunderstanding that Sui is the most reasonable and best option in terms of technology, and I agree with this. However, in terms of ecological diversity and wealth-creating effect, Sui is currently weaker than Solana. Through multiple rounds of development, Solana has extended the public chain liquidity from the chain itself to the project coin, and then to Memecoin, completing a complete ecological baptism and forming a mature Solana ecosystem.
So, is Sui the best blockchain right now? I think so. But does it have the best ecosystem? Not yet. You need to distinguish between the two and not fall into overly romantic technological idealism. I think Sui has avoided some of the mistakes that Cosmos made in the past, and that is its advantage.
Dongdong Robin:
Teacher Kyrie mentioned the direction in which Sui can be further optimized. One of his points was very interesting to me: Sui has a foundation behind it to lead the business strategy. Whether it is promoting community cohesion or managing market value through token economics, the foundation can effectively unite the ecosystem and continue to promote development. I agree with this.
Q2: It is hard not to mention the Cetus hacking incident when talking about Sui recently. What is the impact of this incident on Sui? Will it change people's confidence in Sui?
Kyrie:
After the Cetus incident, there are three key points that have been confirmed. First, the basic code base can be regarded as public goods, which is the lowest level of infrastructure. In real life, such low-level infrastructure is usually the responsibility of the government, because the government is not for maximizing its own interests, but for the public welfare. Mysten Labs and Sui Foundation play a government-like role in this public chain, which is the highest level. Some people may criticize its lack of decentralization, but let's put aside the controversy for now. The government should take the initiative to assume the responsibility of public goods.
Currently, Mysten Labs is reviewing all codes related to the Cetus incident and making targeted reinforcements. Next, they may continue to assign some engineers to re-examine the underlying code and optimize the parts that can be optimized.
Second, the insurance fund or bug bounty mechanism. The two are not exactly the same, but they have similar functions: encouraging bug submission through a reward mechanism, stabilizing people's hearts, and promoting ecological development. This should be led by Mysten Labs, but not done alone, but in cooperation with DeFi projects. In real life, we trust banks because of government supervision, but there are also detailed mechanisms outside of supervision, such as commercial banks need to comply with regulatory requirements and purchase insurance, and there are reinsurance companies behind insurance companies to form a risk transmission system. I think similar mechanisms will appear in the Sui ecosystem in the future.
Third, Cetus users may not want to listen, but it is difficult for Cetus to regain its previous huge market share. The authorities should realize that a monopoly leads to concentrated risks, which is not a good thing. If I were Sui Foundation or Mysten Labs, I would support multiple projects. The lower the track, the higher the degree of decentralization should be. For example, there may be five DEXs, four lending protocols, and two or three derivatives, forming an orderly DeFi architecture. At the same time, the overall security can be improved through the code security reinforcement in the first point.
In the next year or so, the Sui ecosystem will undergo a reshuffle. For Sui token holders, there is no need to adjust the investment strategy too much. However, if a large amount of funds are placed on a few projects in a single track, it is recommended to adopt a more conservative strategy. This is my personal opinion.
CryptoMiao:
Regarding the Cetus incident, I think it can be analyzed from two levels: on-site participants and off-site onlookers. On-site refers to investors who have invested in the Sui ecosystem. Cetus accounts for 60% to 70% of the DEX ecosystem. If such a large liquidity pool is drained, including the concentration of many project tokens on the Cetus DEX, the liquidity pool of the entire ecosystem will be affected. Investors will first think: Is it a problem with the underlying code of the Sui ecosystem, or a problem with the Cetus project code? If there is a problem with the underlying code of the Sui chain, it may require a large-scale upgrade, affecting all projects and funds on the chain. If it is only a project-level problem, the risk can still be controlled.
Opportunities can also be divided into two aspects. First, an emergency response plan needs to be established to minimize major risks. As the saying goes, it is better to suffer losses early. When you are young, losing tens of thousands or hundreds of thousands feels like the sky has fallen, but a few years of work can make up for it. If you lose your pension when you are in your fifties or sixties, it may be irreversible. The Sui ecosystem is still in its early stages. This incident should prompt all projects to establish risk awareness, check their own codes, and establish a bug reward mechanism for white hat hackers. This is a wake-up call for the Sui ecosystem, reminding project parties not to focus only on rapid development and grabbing users while ignoring safety. Safety is like a doctor or a lawyer. It is usually not conspicuous, but its importance is known only when an accident occurs.
If the emergency plan is handled properly, most of the losses can be recovered. The project party needs to compensate investors and protect the assets in the V3 pool and LP pool. There are now cases that prove that the project party or the foundation can advance the refund of funds to compensate investors for losses. There may be an impact in the short term, but in the long run, this can attract off-site L2 institutions such as Apple, Nintendo or Microsoft. If the Sui ecosystem can access the products of these institutions, but lacks a fund recovery mechanism, it will be difficult for large L2 institutions to enter the market. In contrast, the Ethereum ecosystem is often attacked by hackers, and the Ethereum Foundation is powerless after the funds are transferred away. If the same is true for Sui, it will be difficult for large listed institutions or livelihood institutions in the United States to enter the market with confidence. I think the Sui Foundation's handling method is more appropriate.
Kyrie mentioned that Cetus, as a DEX infrastructure, will gradually reduce its market share. Previously, it accounted for 60%-70%. In the future, the share of a single company should drop to about 20%, and there should be 45 competitors in the DEX track. If one company goes bankrupt, it will not drain the liquidity pool of the entire Sui ecosystem. This involves underlying logical risks, similar to the collapse of the foundation leading to the collapse of token prices and upper-level projects. Therefore, Cetus's market share is bound to decline. I have participated in Cetus' Chinese Space, and they mentioned new development directions, such as launching trading strategy activities, claiming to double 100 times in a month, indicating that they are exploring new products. Because the LP pool size can no longer be maintained so large, and the foundation will not continue to strongly support its pool, the rewards will gradually decrease and be allocated to other projects.
Little Penguin Api:
I can add that I agree with Kyrie and Miao. According to DeFiLlama data, Cetus, Bluefin and Momentum are currently the top three. Due to different strategies of each company, they may continue to develop in this mode in the short term.
Regarding the Cetus incident, I would like to share my views from the community's perspective. There are many voices in the community. One group believes that Sui is too centralized, while the other group expresses their opinions based on the security of user assets. This is my personal opinion and does not represent any project. I think some people are like what is called "dai han shao" in Minnan or Taiwanese, that is, when others are burned, they cry out in pain. When Sui handled this matter, he made decisions through semi-centralized node voting, and it was not arbitrary. We also saw that two nodes voted against it, which I think is a reasonable approach and reflects the existence of different opinions. Some projects joked about this in the early days, which I think is not appropriate. This incident is worth everyone's reflection: what is the most important thing to you when the theft occurs? I hope the audience will think about this question. Everyone's voice is important, and everyone is welcome to express their opinions on Twitter and spread their own views. That's it.
Dongdong Robin:
The teacher explained it humorously using the Minnan dialect idiom "带喊烧". It is true that sometimes it is difficult for outsiders to empathize. I also think that if the ecosystem that Sui has worked hard to build causes the assets of many users to be damaged due to the Cetus incident, it will seriously undermine confidence. We also saw two voices in the community during this incident: one faction emphasizes decentralization, and the other advocates protecting user assets. So let's move on to the next topic.
Q3: Many people think that the Foundation’s practice (freezing funds) goes against the concept of blockchain decentralization. What do you think of the debate between centralization and decentralization? Is there a conflict between security and decentralization?
Kyrie:
This question is actually quite difficult. At this stage, there is a conflict and a trade-off needs to be made between decentralization and product experience. The trade-off ratio is different for each person, resulting in different development paths for each public chain. Bitcoin is highly decentralized and extremely secure, but it has almost no applications. This is the choice of some people because they value decentralization and security.
Next is Ethereum. Although we often say it is slow and expensive, it still has a large number of users. After combining with Layer2, some people can accept this product experience and do not need overly complex functions. The third category is high-performance public chain players, such as Sui, Solana, and Aptos. They require that the product experience must be up to standard, otherwise there is no point in talking.
Different user groups have different choices. Users who focus on product experience think more like traditional Web2 users, but they build solutions on the blockchain. They cannot accept the logic that they cannot recover funds through government agencies after being stolen by hackers. In the Ethereum ecosystem, this may be taken for granted, but if Sui does nothing after similar incidents, a large number of users will be lost.
Each public chain needs to clearly understand its own positioning, the needs of its target users, and its position in the spectrum of security, decentralization, and product experience. Sui Foundation clearly understands its user groups and their concerns, so it makes decisions quickly, which I think is reasonable.
If Vitalik does the same thing, I will think it is inappropriate, because different public chains should have different practices, depending on what long-term supporters care about, there is no absolute right or wrong. On Sui, the foundation chose to make decisions through voting, similar to a referendum. Some people criticize this as an institutional practice, where interest groups hold most of the chips, and the results are obvious. But isn't it the same in real shareholder meetings? For example, when TSMC makes a major decision, some shareholders are dissatisfied, but they can only accept it. TSMC's shareholders and customers value stability and certainty, and the procedures and frameworks are compliant and cannot be overturned.
On Sui, I don't think there is a better option. Some people have suggested whether the funds can be left in place, with each project contributing its own funds, the foundation lending money to Cetus, and then returning the money to the users. This plan also has risks: it requires the consent of all affected project parties, and they must be able to compensate, which is difficult to implement. If it is delayed for too long, Sui's original supporters may lose confidence and feel that the foundation lacks courage. If the token price falls to $2 or $1.5, there is no need to discuss it.
CryptoMiao:
I think centralization and decentralization are not the positive and negative sides of a coin, but a limited spectrum. Complete decentralization is not necessarily good, and complete centralization is not necessarily superior. Centralization is more efficient, and decentralization is more democratic. Take Pumpfun as an example. It claims to be decentralized, but it once opened live video broadcasts. During the period, abuse, suicide, shooting, self-mutilation and other behaviors condemned by traditional society appeared, which brought legal risks. Although it is decentralized and some people support it, most people do not agree. In the end, under pressure from public opinion and law, Pumpfun closed the live broadcast function because it violated basic social concepts.
Even if there are a few people supporting it, the project still needs to serve the majority of customers. The society considers certain behaviors inappropriate, and public opinion and legal pressure are themselves a form of decentralized voting. On the Sui chain, there are fewer retail investors and Memecoin bases. Compared with other chains, large investors and arbitrage and profiteering funds dominate because Sui has generous incentives and rewards. Its customers prefer stable returns, and the operating model is more like a Web2 project.
Sui currently has 114 nodes, and each node application must be reviewed by the foundation, which has a preliminary understanding of its administrators’ qualifications and ethical standards. If someone applies for a node to be used explicitly for money laundering, the foundation is unlikely to agree.
In Web3, many people think that money comes easily, such as "gambler's money is not money", and regard Web3 as a dark forest, and act arbitrarily. But Sui's philosophy tends to connect more Web2 projects. If Web2 funds enter the chain in the future, such as pension funds, social security, national finance, medical or education funds, the current overly free model may discourage these funds. The scale of assets that have not yet entered Web3 is huge, but Web3 users are relatively young and have a low sense of social responsibility. Sui formed an on-chain "jury" through 114 nodes. The foundation plays a role similar to that of a government or court judge, handling matters such as asset freezing or return, which are decided by node voting.
This is similar to the US judicial system: the judge makes a ruling, 114 jurors vote, and decide whether to return the funds through procedures. Some people worry that this mechanism is too casual, such as 50,000 or 100,000 assets being easily misappropriated. I don't think there is any need to worry too much. This mechanism is only used for major matters and will not be used casually. Frequent freezing or locking of assets will inevitably shake investor confidence, and the foundation will not destroy its reputation.
I saw a joke on the chain before: many people swear to support decentralization, freedom and Dark Forest, and claim that they will admit defeat if they are robbed. But the next day, when they are robbed, they @余弦慢雾 and ask for help. This shows that when the board does not hit you, it is easy to say sarcastic things. That's all I have to say.
Little Penguin Api:
As Professor Kyrie and Professor Miao said, centralization and decentralization are a spectrum. The choice of public chain depends on which end of the spectrum you tend to lean towards. Different stakeholders, such as developers, investors, and users, have different priorities. When traditional funds enter Web3, they usually focus on the following points: first, asset security mechanism; second, compliance and regulatory friendliness; third, risk control capabilities and technical stability.
Taking the Cetus incident as an example, the Sui Foundation and Cetus responded quickly, initiated voting and made a decision within two days, successfully regaining user confidence and handling it quite well. I believe that in the future, when technology develops to a certain stage, it will not lean towards any extremes, but find a balance between concept and practicality.
Dongdong Robin:
Brother Miao mentioned the American jury system, which I think is very appropriate. The debate between centralization and decentralization is indeed similar to the game of national political systems in the real world. Everyone has their own political ideas, and the specific practices of each country are also different. Here I would like to raise a question for consideration:
Q4: If traditional funds (old money) want to enter the Web3 field on a large scale, will they prefer to choose a public chain that actively fights against hacker attacks and protects user assets? After the Cetus incident, I saw an interesting point of view from a blogger: Maybe RWA will usher in better development on Sui?
Kyrie:
This question can be divided into two parts: one is whether RWA has greater development potential on Sui; the other is whether traditional funds (old money) enter the market because of Sui’s reliability.
Regarding RWA, I am optimistic. Sui continues to contact institutions that are interested in developing RWA. As an American public chain, Mysten Labs is located in San Francisco, and its core members are almost always in the United States. In the early days, Sui did not conduct airdrops due to regulatory considerations, which attracted criticism. In order to avoid regulatory risks, Sui allocated funds to project parties that completed KYB through an incentive mechanism, and then the project parties supported user interactions in the form of subsidies. This method bypassed regulatory obstacles. From the beginning, Sui clearly positioned itself as a bridge between Web2 and Web3. Therefore, I believe that RWA will gradually become an important track on Sui.
However, the logic of old money is not like this. Traditional investment institutions know little about technology, and they need to explain to LPs or external investors. Institutions will not choose Solana or Sui because they think they have a unique vision, nor will they take responsibility or admit research errors when they lose money. Their strategy is to follow the trend and see who enters the market first. They will only act after other institutions follow suit. They screen by market value, first choose Bitcoin and Ethereum, and then look at the third largest public chain by market value, evaluate its history and whether there are other old money investments. It's like multiple Spider-Men pointing at each other, waiting for someone to move first.
Therefore, Sui ETF has limited impact on Sui's short-term topicality or price momentum. I don't think any institution will skip Bitcoin, Ethereum or Solana and invest directly in Sui ETF with a lower market value. This requires decision makers to go against the crowd, convince stakeholders, and even prove to the top management that they have a unique vision to bet hundreds of millions of dollars on Sui. Such people need extremely strong abilities and backgrounds, such as a 30-year-old heir who is well versed in blockchain, in a high position and is at the moment of handing over the baton. But this is an exception, not a common phenomenon in the industry. I don't have romantic illusions about this.
Q5: Sui seems to have made a lot of moves recently. For example, there are rumors of cooperation with large web2 companies such as VISA, Nintendo, and Meta. Sui ETF application has also been submitted to the SEC. How does Sui connect with Web2 and affect the real world?
CryptoMiao:
RWA is the bridge connecting Web2 and the real world of Web3. Stablecoins are the most common RWAs, representing the US dollar in the real world, locked in banks and other institutions, and issued on-chain tokens through proof, 100% supported and redeemed. For example, Ondo's USDY is a US dollar bond on the chain, and its founder is from Goldman Sachs. The US SEC is also studying the tokenization of US stocks and has consulted Ondo's senior management. The United States recently passed the Stablecoin Act to regulate the issuance of stablecoins. Circle just went public last week, and its prospectus shows that the assets with the largest holdings are Sui, BTC, Ethereum, and a small amount of Solana. Circle announced the issuance of native USDC on the Sui chain on September 17, 2024. At that time, the price of Sui was about US$1.15, and the price of USDC as a stablecoin was always US$1.
Circle's USDC issuance is huge, but compared with USDT, the revenue is far less, with annual profits of only tens of millions of dollars and low profit margins. Because it is listed in the United States, Circle must comply with strict regulations and invest a lot of resources in compliance. Why choose to list in the United States and accept cumbersome regulations? I have a different view from Kyrie. I think Sui is very suitable for developing RWA and attracting traditional funds (old money). Through Circle, USDC may become a stable currency circulated among American merchants after filing in the United States. Users do not need US dollars or bank transfers, and can directly settle with USDC.
Users can log in seamlessly (such as zkLogin) through Twitter, Gmail, Google or Apple accounts, without having to remember private keys, and deposit funds on the Sui chain for transfer payments. My point of view is somewhat different. Kyrie mentioned that old money needs to be converted into Sui to be considered an investment in the Sui chain. I think old money can enter through stablecoins or US dollars and US bonds, such as holding USDC or USDY. Some US states have passed bills allowing social security funds to invest no more than 10% in Bitcoin. Although it is unlikely to buy Sui directly, Bitcoin settlement can be made through cross-chain assets on the Sui chain (such as sBTC, lBTC). This is a way for old money to enter Sui, even if it is Bitcoin or Ethereum.
If more Web2 funds, such as social security, pension, medical insurance, or product settlements of Apple, Nintendo, Meta, and Tesla, enter the Sui chain, liquidity will increase significantly. For example, Tesla accepts Bitcoin payments and can use Bitcoin on the Sui chain for settlement. If an incident similar to Cetus occurs, Sui can quickly freeze assets and recover them within a few days, enhancing the confidence of traditional companies and governments in the Web2 market. Circle holds the most Sui positions, and it is not an investment without reason. It must be because of Sui's high performance in supporting stablecoin transfer payments.
There is a piece of news that has been hyped up a lot: Sui plans to cooperate with the Greek Stock Exchange to support stock trading. When I first started playing Sui, I heard about this in 2023, and it was mentioned again in the recent news. In the early stage, it may be tested by stock exchanges or settlement institutions in small countries and small companies. If the Greek Stock Exchange can achieve low-friction and high-speed securities trading on the Sui chain, is it possible for the New York Stock Exchange or Nasdaq to follow suit in the future? Although it is not Sui coins that are held, but RWA assets such as stocks, securities, and US bonds, the transactions take place on Sui, which is also a way for old money to enter Sui.
Little Penguin Api:
I would like to add one more point. At present, the most easily accepted feature of Sui combined with the real world is to lower the threshold for using blockchain technology. The core is to allow ordinary users to use Web3 services without being aware of it.
Take Sui as an example. The gaming track is its key direction, although there are some twists and turns in the development process. In September this year, SuiPlay machines will begin to be shipped to buyers, which is expected to trigger a wave of enthusiasm. The gaming track is crucial to Sui because it allows players to directly onboard the entire Web3 ecosystem by lowering the threshold for use. This field is worth looking forward to in the future. Above.
Dongdong Robin:
I also attach great importance to a question, that is, what efforts has a public chain made in onboarding Web2, or in promoting the mass adoption of web3?
Some time ago, Dr. Xiao Feng mentioned in his speech at Wanwu Island that the competition for public chain infrastructure is coming to an end, and the next stage may depend on which public chain can incubate and develop more useful applications and attract a large number of Web2 users to enter Web3.
Q6: What will the future public chain landscape look like? What is the development goal of the Sui public chain, and what position will it occupy in it?
Kyrie:
In the future, the development of public chains will first focus on technology reinforcement, which is the most certain and controllable direction. In the long run, the development route will gradually shift from the technical romantics to the pragmatics, and strive to hide blockchain technology behind the scenes so that users can use the product without understanding its operating principles. This is the spiritual direction, and Sui will continue to build various tools to move forward in this direction.
The second direction is to balance the wealth creation effect with technological improvement. Pure romantics cannot survive without the wealth creation effect, and this field needs to be promoted more rhythmically and intensively in the future. The third direction is related to regulation. 2025 is a key year for regulatory advancement, which will continue until 2027 and 2028. For example, Europe's MiCA Act lacks a clear regulatory framework for DeFi. Although there are discussions, no effective mechanism has been formed. In the future, the regulation of DeFi and public chains will be clearer.
The public chain track will be further subdivided: is it to pursue higher performance and product experience, or to sacrifice some functions for decentralization? This is a trade-off. In addition, does the public chain need to comply with regulatory rules? Blockchain is just a tool and still needs to operate under the regulatory framework of the government or supranational institutions. I may not accept the supervision of a single country, but I can accept the supervision of supranational institutions. The design of the public chain may need to consider these factors, but this is still vague, so it is just a casual chat.
Little Penguin Api:
Then I will continue. When SuiHub opened in Taipei last week, we discussed how to introduce Sui public chain to outsiders. I later found that this was not an appropriate question. Back to the basics, blockchain should not only emphasize its cryptocurrency or digital currency attributes.
For ordinary users, it is important to accomplish what they want to do through various applications. Just like using WeChat Pay, users do not care about the underlying clearing or settlement mechanism of the bank. As long as they can achieve their goals, such as investment, remittance or games, it is enough without understanding the entire technical context. As a high-performance and highly scalable blockchain, Sui is a leader in this regard. Above.
Crypto Miao:
If we talk about Sui's future goals and market position, I think Sui's goal is not limited to the current Web3 market, because the fresh blood of Web3 has decreased. Compared with the big bull market five or six years ago, BTC and ETH now have ETFs, and most of the old money and those who should enter the market have already entered. In the existing public chain competition, if the increment is limited, the asset transfer cost of old Web3 users is high (such as wear and tear), and they have transaction inertia, tend to stay in familiar projects, and have limited willingness to move.
Sui's goal is not to share the existing Web3 market, such as grabbing the market share of BTC, Ethereum, Solana or Aptos, competing for the Move chain leader or surpassing Solana and becoming the next Ethereum. On the contrary, Sui wants to take a unique route. The goal is not to compete in the existing blockchain market, but to achieve breakthroughs by introducing Web2 products, programs and user scenarios. Sui's recent layout shows that it cooperates with Visa, Circle, Nintendo (rumored to cooperate with Pokémon), Meta, etc., aiming to attract Web2 traffic. For example, on October 8, 2024, Sui launched the native USDC through cooperation with Circle, using the cross-chain transfer protocol (CCTP) to achieve interoperability with chains such as Ethereum and Solana to enhance liquidity; cooperate with Ant Digital Technologies (Ant Group's Web3 brand ZAN) to promote RWA on the chain, especially in the field of new energy; SuiPlay0X1 gaming device is also planned to be shipped in 2025, supporting Sui games and Steam and Epic game libraries, connecting traditional and blockchain games.
When introducing Sui to outsiders, there is no need to emphasize its decentralized distributed accounting or mining token attributes. Just like introducing Bitcoin without detailing the technology, if Sui realizes the use scenario, users only need to know that USDC can be used for payment and scan the QR code to complete the transaction without being aware of the existence of Sui. For example, when buying US bonds, the bank connects to USDY, and users can directly view the value of US bonds and daily returns after placing an order without understanding Sui technology. This is similar to the Web2 payment experience, where users focus on functions rather than underlying mechanisms.
At the Sui Base Camp event in Dubai in 2025, the Sui Foundation supported three projects: two AI-related (including AI drawing tools) and one music copyright RWA project. This shows that Sui did not prioritize the pursuit of coin price increases or wealth creation effects, but focused on infrastructure construction. The music copyright project tokenizes song issuance, and holders can obtain profit sharing from platforms such as Apple Music, which is an RWA asset. Most of these projects are early concepts and have not yet matured. For example, Nemo (a financial product similar to Pendle) only won the community popularity award, rather than a priority support object. AI and music RWA projects ranked high, showing that Sui attaches importance to underlying assets and infrastructure.
Sui Ecosystem has taken a step ahead in RWA on-chain, such as cooperating with Ant Digital Technologies to launch ESG-supported RWA assets, with Sui Foundation as an anchor investor. In addition, infrastructure projects such as SuiNS, Walrus, and SuiPlay continue to advance, and Sui cooperates with Google Cloud to enhance AI capabilities, such as using Vertex AI to assist debugging and code generation. Sui's goal is to introduce Web2 assets and emerging users through these layouts to expand the ecosystem, rather than snatch existing Web3 customers. The wealth-creating effect may not be obvious in the short term, but in the long run, Sui attracts Web2 funds such as social security, pension, and medical funds, or settlement scenarios of Apple, Nintendo, Meta, and Tesla through high performance and low thresholds (such as zkLogin's senseless login), significantly improving liquidity.
Sui's development logic is to build a bridge between Web2 and Web3, attract new users and assets through infrastructure and RWA integration, and expand the scale of the ecosystem, rather than competing for existing resources within Web3.
Dongdong Robin:
Miao Ge’s point of view is very interesting. He revolved around “incremental” and emphasized that Sui should not be limited to grabbing users within Web3, but should achieve growth by onboarding more Web2 users.
Thanks to Mr. Penguin, Mr. Kyrie, and Mr. Miao for visiting the tavern tonight! It was a very informative talk. I took notes while listening, which deepened my understanding of Sui. Thanks to the listeners for asking questions.
