Author: Haotian

Many people are puzzled by the outstanding performance of innovative public chains like Sui Network. In my opinion, the surge in value is just a superficial phenomenon. The real reason behind it lies in the "bloodline advantage" of the Move-based public chain and the potential outbreak of a new DeFi ecosystem. Why?

Next, I will briefly analyze the advantages of the Move-based public chain and discuss the potential for an explosion in the on-chain ecosystem of Sui using two major projects in the Sui ecosystem: Dragon One Scallop and Dragon Two NAVI Protocol as examples.

Solidity language is a widely used language for building smart contracts on Ethereum, with a large developer community base; Move language, as a newcomer, has significant advantages in resource handling, security, and modularity, especially suitable for the financial application field.

1) Move language introduces a resource model, where each object is treated as a unique entity, resulting in stronger security.

2) Move provides a strict type system and ownership model, which helps in compiling time monitoring and prevention of various vulnerabilities, especially suitable for handling complex financial transactions.

3) Move supports high modularity and composability, allowing developers to create interactive modular and library operations.

In summary, Move language has strong security, scalability, and efficient state management features, making it a native language for underlying DeFi financial products. This is the key reason why the Move-based public chain has been highly sought after in the current trend, which can be referred to as the "bloodline advantage". However, for the Move-based public chain to prove its market potential, the rise of the public chain token SUI must be supported by a strong and powerful ecosystem, otherwise it will be just a castle in the air.

Next, I have selected Scallop, ranked first in TVL on DefiLlama in the Sui ecosystem, and NAVI Protocol, ranked second. Let's evaluate whether there is a possibility of a new DeFi ecosystem explosion on Sui.

Scallop

1) Innovative model: Scallop currently has a TVL of 63.5M and adopts the model of Compound V3+ Solend V2, which isolates asset pools and collateral pools, ensuring that users can withdraw collateral at any time, thus ensuring higher security.

2) Product features: 1. Utilizing the characteristics of the SUI network to provide users with main accounts and sub-accounts, making it convenient for users to isolate assets and manage investment portfolios; 2. Inheriting the Scallop Tool, users can easily complete multiple transactions in one interface; 3. The interface displays rich information and can serve professional users based on the SDK.

It is worth mentioning that the account separation feature is due to SUI's adoption of the unique account model of the Move language, centered around Object objects. Unlike the EVM's management of "balances", Object can manage specific objects, such as Sui homogeneous tokens, and can manage the transfer, issuance, destruction, and interaction records of Sui and all addresses in the global state. Therefore, it is completely acceptable for users to manage assets with multiple accounts, and Sui will clearly record and manage the state of a user having multiple accounts.

3) DeFi complexity design: 1. Scallop has implemented a three-line dynamic interest rate model for over-collateralized lending, optimizing interest rate stability; 2. Scallop has strong composability and expandability, where users can receive corresponding sCoins by executing collateral, and sCoins can then flow into yield aggregators as derivatives. Multiple yield aggregators have already connected to liquidity based on Scallop, such as Typus and Kai Finance; 3. Scallop uses a decentralized secure oracle mechanism, using a scalable multi-oracle consensus strategy to increase the cost of attacks, effectively preventing price manipulation attacks, and supports multiple oracles such as Pyth, Switchboard, and Supra Oracle, making full use of Sui Move's composability.

As an example, on Ethereum DeFi, due to various AMM trading pool depths and the inability of oracles to correctly balance price feeds by time and trading volume, there are many price manipulation attacks, and some even consider these to be legal and controllable arbitrage activities. In the Sui ecosystem, strong modularity and composability can help reduce such issues.

NAVI Protocol

1) Basic model: Navi currently has a TVL of 54M and is a one-stop liquidity protocol based on Aave V3, allowing for recursive lending and borrowing, which can increase the efficiency of fund utilization, but also increase potential risks.

2) Product features: 1. Leveraged treasury, automated leverage, allowing users to repeatedly borrow and lend assets for short or long positions, avoiding repetitive operations; 2. Isolation mode, also based on the characteristics of Sui Move, new assets will be listed after governance voting approval; 3. Simple design, user-friendly for novice users.

It should be noted that the ability to achieve automated leverage is also due to the language features of Move, where users can precisely authorize a specific token to a smart contract without worrying about illegal access to other assets. In addition, smart contracts can implement multiple repetitive operations based on set logic and rules, and can manage states in real time during the process, thus achieving automated leverage.

In an EVM system, achieving automation would require an "Approve" operation, which could easily pose security risks. However, in Move, once the usage rights of an Object are granted, there is no need for repeated authorization for each transaction.

3) DeFi exclusive features, can achieve low annual interest rate asset lending and relatively high mining returns, which actually stems from its efficient application of the native asset token model, where users can pledge native assets to obtain lending fee discounts. In addition, NAVI has adopted Curve's Ve model, allowing veNAVI to efficiently play a role in user voting, LP pool incentives, and more. Furthermore, NAVI uses a single oracle in its design, which is efficient but has similar risks to EVM environments in dealing with price manipulation, and may not be as effective as a combination of multiple oracles.

In conclusion,

I have tried to let everyone feel the differences between a DeFi protocol in the EVM environment and the Move environment through two DeFi lending products on Sui. Overall, the underlying framework of Move significantly improves the efficient application of assets, user experience, and security for DeFi products.

However, similar to ZK technology, the learning curve of Move language is also relatively high. Although the language itself has advantages in security and financial complexity, it will take some time for DeFi developers on Ethereum to overcome the barrier of Move language and introduce more diverse and complex financial gameplay and experiences.

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