Written by: Jae, PANews
As the year 2026 begins, Sui welcomes the "opening green" with a surge of 30% in just one week.
While most Layer 1 public chains are still battling for TPS and ecosystem numbers, Sui is waiting for its ticket to the Wall Street battleground. The world's largest crypto asset management firm, Grayscale, and Bitwise have recently submitted applications for a Sui spot ETF to the U.S. SEC. This means that the SUI token will soon be evaluated alongside BTC and ETH in the institutional asset basket.
However, beneath the glamorous narrative of the "Silicon Valley darling" transforming into the "new Wall Street darling," Sui is also undergoing a severe test: can it become a trustworthy ecological foundation while embracing traditional capital?
Multiple data points show exponential growth, with a large influx of new users
Over the past two and a half years, the Sui ecosystem has shown exponential growth and strong user stickiness.
Since the mainnet launch in May 2023, its TVL has skyrocketed by approximately 32 times, peaking at $2.6 billion in October 2025. However, due to the impact of the "10.11 flash crash," Sui's TVL has continued to decline, currently sitting at around $1 billion, having fallen below the halving line.
In terms of public chain fees, Sui has grown from an initial $2 million to approximately $23 million now, an increase of 11.5 times.
In terms of throughput, Sui's peak daily throughput reached 66.2 million transactions, with daily throughput remaining stable at over 4 million transactions for nearly a year. These massive throughput numbers confirm that Sui has achieved horizontal scaling, sufficient to support high-intensity, large-scale user and application requests.
Regarding user activity, the number of daily active users on Sui was only tens of thousands at the initial launch, but it surged sharply, peaking at 2.5 million in April 2025. Although there has been a recent decline, the monthly average data remains at a healthy level. As of now, the average daily active user count is still around 600,000.
It is worth mentioning that the ratio of old users has remained stable at over 20%, reflecting a high level of user stickiness. Since 2025, a large number of new users have continuously entered the Sui ecosystem.
These data points form the foundation for Sui to attract institutional capital; it is no longer just a public chain network with technology but a mature economy that carries real traffic and assets.
Opening the doors to Wall Street, multiple SUI spot ETF applications submitted
The application for the SUI spot ETF will further broaden the access path for compliant funds and strengthen institutional recognition.
On December 5, 2025, Grayscale officially submitted an S-1 registration statement to the SEC, applying to transform its Sui Trust Fund into a spot ETF. According to the disclosed documents, the Grayscale Sui Trust (SUI) ETF plans to be listed on the New York Stock Exchange (NYSE Arca), and the fund will directly hold SUI tokens, linking the net asset value of the shares to the market price of SUI. More importantly, this application includes a staking mechanism, meaning that this ETF can provide investors with price exposure while also generating additional endogenous returns through the rewards from the underlying validators of the public chain, which will be highly attractive to cash flow-seeking institutional investors.
Bitwise followed suit, submitting the registration statement for the Bitwise SUI ETF to the SEC on December 19, 2025, planning to list on Nasdaq and choosing Coinbase as the custodian. Bitwise had previously included SUI in its "Bitwise 10 Crypto Index ETF," and this independent application for a spot ETF marks SUI's official entry into the institutional asset basket alongside BTC, ETH, SOL, and others.
Unlike previous cautious stances, the recent changes in the SEC leadership have created a more relaxed regulatory environment for the approval of altcoin ETFs. This change has accelerated the approval of multiple altcoin ETFs and shifted the Sui ETF's landing from market vision to a substantive timeline.
The institutional favor for Sui is not coincidental; its ability to stand out among many L1s lies in its rich application scenarios, particularly in payment, gaming, and DeFi protocol scalability.
Moreover, the market consensus on the value of the SUI token is shifting from short-term speculation to long-term allocation. As of January 7, the market capitalization of the SUI token exceeded $7 billion, with a fully diluted valuation (FDV) of nearly $19 billion. Although about 62% of the tokens are still locked, the market has smoothly digested over $60 million in token unlocks at the beginning of 2026 without significant price sell-offs. The arrival of the Sui ETF will lower the entry barriers for traditional wealth management institutions, significantly improving the liquidity depth of the SUI token, thereby reshaping its valuation logic.
Upcoming launch of privacy trading feature may trigger commercial demand
As institutional capital enters the market, Sui is also attempting to address another barrier in the B2B payment field for public chains. While all public chains promote the transparency and traceability of their on-chain data, Sui is taking the opposite approach.
As the privacy track returns to the main stage of crypto, Adeniyi Abiodun, co-founder and Chief Product Officer of Mysten Labs, announced on December 30, 2025, that the Sui network will launch a native privacy trading feature in 2026. This is not an optional plugin but an underlying capability integrated into the consensus layer and object model. The purpose of developing this feature is to achieve privacy by default, meaning that the transaction amount and counterpart information will only be disclosed to the sender and receiver by default, remaining invisible to onlookers.
This feature could generate significant commercial demand, as the transparency of traditional public chains, while ensuring fairness, severely hinders entities that need to protect business secrets and individual users who require privacy. Sui's privacy solution aims to maintain high throughput while providing end-to-end confidentiality through zero-knowledge proof technology.
The most notable feature of Sui's privacy trading function is its compliance-friendly design. Unlike privacy coins like Monero, Sui introduces a selective transparency mechanism.
- Audit Hooks: The protocol allows specific transaction details to be opened to regulators or authorized auditors under certain compliance processes;
- KYC/AML Integration: Allows financial institutions to conduct necessary anti-money laundering reviews while ensuring privacy protection;
- Post-Quantum Primitives: Considering the potential threat of quantum computing to elliptic curve cryptography, Sui plans to introduce post-quantum cryptographic standards such as CRYSTALS-Dilithium and FALCON in its 2026 upgrade, ensuring that privacy data stored on the chain remains unbreakable for decades to come.
These technical components position Sui as a "regulated privacy financial network," attracting banks and commercial entities that are highly sensitive to data.
However, this positioning is a double-edged sword. It attempts to attract traditional financial institutions sensitive to data but may also provoke skepticism from pure crypto enthusiasts. A more severe challenge also lies in the technical aspect: integrating zero-knowledge proofs and even post-quantum encryption algorithms while maintaining high TPS.
Ecosystem projects undergo liquidity infrastructure upgrades
In the fierce competition among L1s, the depth of liquidity remains a core indicator determining the vitality of public chains. In recent months, Sui ecosystem projects have frequently made moves to enhance liquidity efficiency and architecture optimization.
As a protocol that has long occupied the top spot in TVL within the Sui ecosystem, NAVI Protocol officially launched the Premium Exchange (PRE DEX) on December 29, 2025. This move signifies that NAVI is evolving from a single lending protocol into a full-stack DeFi infrastructure.
PRE DEX focuses on building a premium discovery mechanism. In the current crypto market, many protocol tokens exhibit significant price misalignment at different stages. PRE DEX aims to provide a pricing platform for these assets through market-driven algorithms.
For institutional investors and multi-wallet users, PRE DEX will greatly enhance management efficiency. The system allows users to efficiently configure and aggregate multi-chain and multi-protocol assets within the same interface, reducing friction costs associated with cross-protocol operations.
With the launch of PRE DEX, asset pricing within the Sui ecosystem is expected to become more efficient, especially when dealing with high-value or low-liquidity assets, PRE DEX may become a liquidity transfer hub.
The two financing events at the end of 2025 may indicate that liquidity management in the Sui ecosystem is entering a phase of AI-driven and dynamic management.
In December 2025, Magma Finance announced the completion of a $6 million strategic financing round, led by HashKey Capital. Magma aims to address the issues of liquidity fragmentation and low capital efficiency within the Sui ecosystem.
The protocol's technical architecture introduces an Adaptive Liquidity Market Maker (ALMM) model. Unlike traditional Concentrated Liquidity Market Maker (CLMM) models, ALMM will utilize AI strategy layers to analyze market volatility in real-time. When the market experiences significant fluctuations, AI will automatically adjust the distribution of asset prices and rebalance the capital of liquidity providers (LPs) to active trading ranges.
In this way, Magma will not only provide traders with lower slippage but also create higher real returns for LPs. At the same time, AI will monitor the memory pool (Mempool) to prevent MEV attacks.
Ferra Protocol completed a $2 million Pre-Seed round of financing in October 2025, led by Comma3 Ventures. Ferra launched the first DLMM (Dynamic Liquidity Market Maker) DEX on the Sui mainnet, with innovations in high modularity and composability.
Ferra not only integrates the CLMM model and DAMM (Dynamic Adjustment Market Maker) model but also introduces dynamic joint curves, which will further empower the fair launch and liquidity guidance of new tokens. Ferra's vision is to become a dynamic liquidity layer on Sui, transforming funds from static deposits into "living water" that flows freely with market sentiment and demand.
DeFi ecosystem in turmoil, leading projects facing governance and trust crises
However, Sui's public chain expansion is not without challenges. Sui's largest lending protocol, SuiLend, was recently accused of buyback fraud, casting a shadow over its DeFi ecosystem and prompting the community to reflect on the misalignment of public chain incentives.
As the leading lending protocol on the Sui chain, SuiLend's TVL once approached $750 million, accounting for 25% of the total chain share. However, behind the impressive data, the performance of its token SEND has consistently been disappointing. Despite the protocol generating $7.65 million in annualized revenue in 2025 and claiming that 100% of protocol fees would be used for token buybacks, the price of SEND has dropped over 90% in the past year.
Although SuiLend executed $3.47 million in buybacks since February 2025 (approximately 9% of the circulating supply), this has not provided the expected price support for the small-cap asset SEND, which has a market value just over $13 million.
According to KOL Crypto Fearless, SuiLend has been tagged as ST by Bybit, and the community has questioned the existence of insider trading in the buybacks, viewing it as a disguised method for the team to offload tokens. Particularly during the IKA liquidation incident, SuiLend did not activate the insurance fund but forcibly deducted 6% of the principal from users, further damaging community trust. Additionally, the protocol's continued operation relies mainly on monthly subsidies of several million dollars from the Sui Foundation.
This has led to accusations of buyback fraud within the community. The community generally believes that the buyback strategy is merely a drop in the bucket; while it superficially reduces token supply, it does not offset the high token emissions and the selling pressure from early VCs.
This case serves as a wake-up call for the Sui DeFi ecosystem: without real user growth and sustainable models, token buybacks may only mask a hollow house of cards. Beyond data indicators like TVL and revenue, the market should also pay attention to dimensions such as community governance and incentive structures of the protocols.
For Sui, while the road to Wall Street is tempting, ensuring a solid and reliable foundation may be a longer journey. The explosion of data has proven its technical potential, but trust is the foundation of survival. Sui needs to complete the difficult transformation from a technical experiment to a mature economy, maintaining innovative sharpness and reasonable valuation while making trust a core piece of the puzzle for value growth.
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