In today’s newsletter, Canary Capital’s Josh Olszewicz introduces the Sui blockchain and discusses its potential impact on the adoption and optimization of Web3 for consumer applications.
Special alert: Are you going to Consensus Miami? Don’t miss the closed-door Wealth Management Day on May 6. A special side event is planned, dedicated to advisors. Participation is free for accredited advisors. A CRD number is required to apply.
Happy reading.
Decomposition
The Sui Network (pronounced “swee” like sweet) is emerging as one of the most differentiated Layer 1 blockchains in the current market cycle, combining a novel architecture with a design philosophy aimed directly at consumer-scale applications. A layer 1 blockchain is the base layer of a network, where transactions are recorded, validated and finalized. Although often grouped alongside other broadband chains, Sui takes a distinct approach to execution, data ownership and tokenomics, differences that may prove significant for long-term adoption and investor positioning.
Launched in 2023 by Mysten Labs, Sui is a layer 1 delegated proof of stake (DPoS) blockchain built using the Move programming language. Its main innovation is an object-based data model that allows transactions to be executed in parallel, thereby allowing the network to process transactions simultaneously rather than sequentially. This architecture is designed to deliver high throughput and low latency, improved scalability without the need for rollups (transaction batch processing), and native support for complex asset-centric applications.
Unlike traditional blockchains, where every transaction competes for global consensus, Sui distinguishes between owned objects, which can be processed independently, and shared objects, which require consensus. This selective execution model reduces bottlenecks and improves efficiency at scale.
Sui’s design is optimized for consumer-facing Web3 use cases, including gaming, digital identity, and social applications. By minimizing runtime friction and improving user experience through features like zero-knowledge (zk)-based logins and passwords, the network aims to bridge the gap between the usability of Web2 and the propriety of Web3. The broader implication is simple: if Web3 adoption is ultimately driven by applications rather than speculation, architectures like Sui’s could be structurally advantaged.
Beyond its base layer, Sui extends to a broader infrastructure stack. It includes an execution layer for smart contracts and asset logic, decentralized storage via Walrus for verifiable data, programmable encryption via Seal for access control, and confidential computing with Nautilus to support hybrid on-chain and off-chain applications. Together, these components form a complete Web3 environment within the Sui ecosystem, reducing dependence on centralized infrastructure providers.
On the consensus side, Sui uses a dual-layer architecture. Narwhal manages data availability, while Bullshark ensures order and finality of transactions. This design allows the network to maintain high throughput without compromising security.
The total supply of SUI tokens has a fixed maximum cap of 10 billion tokens, with no continued inflation beyond this cap. Key features include gradual release of tokens via long-term vesting schedules, staking rewards distributed from pre-allocated supply rather than new issuance, and an intentionally limited early circulating supply to reduce selling pressure.
Sui has shown consistent growth across several key metrics. Transactional activity has remained constant and active addresses have increased. Total value locked (TVL), or the amount of notional value contained in the ecosystem, has grown alongside the growth of decentralized finance (DeFi) protocols and stablecoin integrations. TVL peaked in October 2025 at around $2 billion and has since declined to $600 million, reflecting the broader decline in assets across the industry.
Ecosystem growth has been driven by the expansion of DeFi platforms, the integration of major stablecoins to improve liquidity and usability, and incentive programs coupled with emerging consumer applications that increase engagement. Examples include Scallop, a DeFi hub focused on stablecoin lending and yield generation; Run Legends from Talofa Games, a fitness RPG where users walk and run in real life to battle and earn rewards; and FanTV, a TikTok-style social media platform.
One way to value Sui, and crypto networks more broadly, is to use a “network P/S ratio” (market capitalization divided by fees). This metric reflects investors’ expectations for future growth and the relationship between current usage and valuation. However, unlike traditional stocks, fees are volatile, accrue only to validators and token holders who stake their SUI, and are very sensitive to incentives and subsidies. As a result, valuation must be contextualized based on user adoption, transaction trends, and ecosystem expansion.
Sui is also beginning to intersect with traditional financial infrastructure. The launch of SUI-related investment products, including exchange-traded vehicles with staking exposure, demonstrates growing institutional interest. This trend reflects the broader evolution of the crypto market, where access, yield, and regulations have paved the way for sophisticated institutional access and capital deployment.
Sui represents a distinct approach in the Layer 1 landscape, combining parallelized execution and object-based architecture, a non-inflationary vesting-based token model, and a growing ecosystem of consumer and DeFi applications.
For investors, the key question is not simply whether Sui can compete on throughput, but whether its design translates into sustainable user adoption and economic activity. If so, the network architecture and token structure could position it as an important part in building the next phase of Web3 growth.
Internet Generations
Web1: Online information | Web2: Platforms and social interaction | Web3: Ownership, composability and programmable value
For more additional learning and a unique networking opportunity, Canary Capital is partnering with 3iQ, Digital Ascension Group and Bitnomial, for an exclusive event on May 4 in Miami. Learn more.
– Josh Olszewicz, Portfolio Manager, Canary Capital
