SUI (SUI) tokenomics

Sui is a Layer-1 blockchain built in Rust that utilizes a Delegated Proof-of-Stake (DPoS) consensus mechanism. Its native token, SUI, is central to the network's operations, serving as the primary medium for transaction fees, staking, and providing on-chain liquidity.

Issuance and Supply Mechanism

The SUI token has a fixed maximum supply of 10,000,000,000 (10 billion) tokens. At the time of the Mainnet launch on May 3, 2023, approximately 5% of the total supply was in circulation. The remaining tokens are released according to a proposed schedule designed to maintain network stability and support long-term ecosystem health.

The network employs an inflationary mechanism to reward participants, though annualized inflation has shown a steady decline as the economic model matures. For instance, inflation dropped from 11.1% in Q2 2024 to 3.5% by Q2 2025.

Allocation Mechanism

The initial distribution of SUI tokens was heavily focused on ecosystem development and rewarding early contributors. The following table details the primary allocation categories:

Note: Third-party sources such as Binance and CryptoRank report slightly different figures, such as 10% specifically for Stake Subsidies and varying percentages for Series A and B investor rounds.

Usage and Incentive Mechanism

The SUI token serves four primary functions within the ecosystem:

• Gas Fees: All transactions incur fees for computation and storage. Computation fees are distributed to validators, while storage fees are deposited into a Storage Fund.
• Staking (DPoS): Tokenholders can stake SUI to validators to secure the network. Validators must stake at least 30 million SUI to operate.
• Governance: While an active on-chain governance process was not fully implemented as of early 2024, the SUI token is intended to provide voting power for protocol upgrades and treasury management.
• Medium of Exchange: SUI provides native liquidity for decentralized applications (dApps) and is used for peer-to-peer transfers.

Incentive Structure: Validators and delegators earn rewards from computation fees and reward subsidies. For the first year of the network, subsidies were drawn from a pool of 1 billion SUI (10% of the max supply). The Storage Fund also plays a critical role by rewarding future validators for storing data created by past transactions, ensuring long-term sustainability.

Locking and Unlocking Mechanism

Sui utilizes a phased vesting schedule that extends beyond 2030. Tokens are generally locked for the duration of an epoch (approximately 24 hours) when staked.

Key Unlock Events and Projections:

• Q2 2024: A major milestone occurred with 1.4 billion SUI unlocking for private investors.
• Q1 2025: Approximately 242 million SUI (2.42% of total supply) were scheduled for release.
• Q2 2025: 227 million SUI (2.27% of total supply) unlocked, with the largest shares going to private investors (12.4%) and the ecosystem (7.5%).
• Q4 2025 Projection: Expected unlocks include 57.9 million for private investors, 37.8 million for the ecosystem, and 36.1 million for staking rewards.

Unlocking Timeline

The following table highlights projected unlock events based on historical and future data points:

The massive unlock projected for May 2030 represents a significant portion of the total supply becoming liquid, though the Sui Foundation manages ecosystem tokens and may not distribute them immediately upon unlocking. This gradual release strategy is intended to mitigate market volatility while fostering network adoption.