Sui's Road to Wall Street and the Dual Challenge of Ecosystem Security

As the year 2026 begins, Sui welcomes a new chapter with a weekly increase of over 30%. While many Layer 1 blockchains are still competing over TPS and application count, Sui has embarked on a completely different path—heading towards the halls of Wall Street institutional capital. The world’s largest crypto asset management firms, Grayscale and Bitwise, have successively submitted applications for Sui spot ETFs to the US SEC, signaling that SUI tokens are about to be evaluated alongside BTC and ETH for inclusion in institutional portfolios.

But behind this glamorous narrative of “Silicon Valley tech newcomer transforming into Wall Street’s new star,” Sui is also facing unprecedented challenges—when the gates of capital open, can it maintain the trust foundation of its ecosystem?

Data Evidence: Sui’s Exponential Transformation

Since the mainnet launched in May 2023, Sui’s development trajectory has shifted from linear growth to explosive leaps. TVL once peaked at $2.6 billion in October 2025. Although market adjustments later brought it down to around $1 billion, this growth process itself is the best proof of its technical feasibility.

More remarkable is the growth in blockchain fees. From an initial $2 million, Sui has surged to about $23 million, an increase of 11.5 times. What drives this? It’s the actual on-chain activity of users. Sui’s peak daily throughput once reached 66.2 million transactions, and even under normal conditions, it consistently maintains over 4 million—enough to demonstrate that its horizontal scalability is no longer just on paper.

User activity tells an even more exciting story. From tens of thousands of daily active users at mainnet launch, Sui surged to a peak of 2.5 million in April 2025. Although there has been some recent pullback, the average daily active users remain around 600,000. More notably, the proportion of old users remains stable above 20%, indicating user stickiness has not been diluted by growth. Since 2025, a steady influx of new users has been fueling the Sui ecosystem.

These numbers are far more than just impressive figures—they represent real transactions, genuine asset flows, and authentic ecosystem activity. Sui has evolved from an experimental blockchain with technical potential into a mature network supporting substantial economic activity.

Institutional Capital’s Knock: ETF Pathways and Policy Opportunities

On December 5, 2025, Grayscale submitted an S-1 registration statement for the Grayscale Sui Trust(SUI)ETF to the SEC, planning to list on NYSE Arca(. The highlight of this application is its unique pledge mechanism— the ETF will directly hold SUI tokens and earn additional rewards through the blockchain’s validator incentive mechanisms. For institutional investors seeking cash flow, this is undoubtedly very attractive.

Bitwise followed suit, submitting its application for a Bitwise SUI ETF to the SEC on December 19, planning to list on Nasdaq), with Coinbase as custodian. Bitwise had previously included SUI in its “Bitwise 10 Crypto Index ETF,” and now launching a standalone spot ETF marks Sui’s official entry into the ranks of institutional-grade assets alongside BTC, ETH, SOL, and others.

All of this is no coincidence. Leadership changes at the SEC have brought a more relaxed regulatory environment for altcoin ETFs. Contrasting sharply with previous cautious stances, this policy shift is accelerating the approval process for multiple altcoin ETFs, turning the vision of a Sui ETF from distant to imminent.

As of January 21, SUI’s circulating market cap is about $585 million, with a fully diluted market cap of approximately $1.541 billion, and the current price around $1.54. Although about 62% of tokens are still locked, the market has smoothly absorbed over $60 million worth of token unlocks in early 2026 without the expected price sell-off. This indicates that market consensus on SUI has shifted from short-term speculation to long-term allocation.

The launch of the Sui ETF will significantly lower the entry barrier for traditional wealth management institutions, improve SUI’s liquidity, and reshape its valuation logic.

Privacy and Security: Sui’s Compliance Exploration

As institutional capital enters, Sui is also trying to solve another challenge faced by public chains in B2B payments. While most chains emphasize data transparency and auditability, Sui is taking a reverse approach.

On December 30, 2025, Mysten Labs co-founder and Chief Product Officer Adeniyi Abiodun announced that Sui will launch native privacy transaction features in 2026. This is not an optional plugin but a deep integration into the consensus layer and object model. Its core design is to achieve default privacy—transaction amounts and counterparty information will only be visible to the sender and receiver by default, completely hidden from other observers.

This feature is expected to generate huge commercial demand. While transparency in traditional public chains guarantees fairness, it severely hampers enterprises and privacy-sensitive users who need to protect trade secrets. Sui’s privacy solution aims to provide end-to-end confidentiality through zero-knowledge proof technology while maintaining high throughput.

The most distinctive feature of Sui’s privacy transactions is its compliance-friendly design. Unlike Monero and other indiscriminate privacy coins, Sui introduces a selective transparency mechanism:

• Audit Hooks: Protocols allow opening transaction details to regulators or authorized auditors under specific compliance procedures
• KYC/AML Integration: Financial institutions can perform anti-money laundering checks while preserving privacy
• Quantum Resistance: Upgrades planned for 2026 will incorporate post-quantum cryptography standards like CRYSTALS-Dilithium and FALCON, ensuring on-chain privacy data remains resistant to cracking for decades

This combination positions Sui as a “regulated privacy financial network,” attracting banks and commercial entities with high data sensitivity.

However, this positioning is a double-edged sword. While it aims to attract traditional finance, it may also provoke skepticism among pure crypto advocates. A more daunting technical challenge is how to maintain high TPS while integrating zero-knowledge proofs and post-quantum algorithms.

Liquidity Revolution: Accelerating Ecosystem Infrastructure Upgrades

In the fierce competition among Layer 1s, liquidity depth remains a core indicator of a blockchain’s vitality. In recent months, Sui’s ecosystem liquidity efficiency has shown an accelerating trend.

NAVI Protocol, a long-standing leader in Sui’s TVL rankings, officially launched Premium Exchange(PRE DEX) on December 29, 2025. This marks NAVI’s evolution from a single lending protocol to a comprehensive DeFi infrastructure. The PRE DEX’s innovation lies in establishing a premium discovery mechanism—many protocol tokens exhibit significant price dislocation at different stages, and PRE DEX aims to provide a more precise pricing platform through market-driven algorithms.

For institutional investors and multi-wallet users, the emergence of PRE DEX greatly enhances asset management efficiency, allowing users to efficiently allocate cross-chain and cross-protocol assets within a unified interface, significantly reducing operational costs. With PRE DEX online, asset pricing within the Sui ecosystem is expected to become more efficient, especially for high-value or low-liquidity assets, where PRE DEX could become a new liquidity hub.

In December 2025, Magma Finance announced the completion of a $6 million strategic funding round led by HashKey Capital. Magma’s core mission is to address liquidity fragmentation and capital inefficiency within the Sui ecosystem. Its architecture introduces an adaptive AMM model called ALMM(, contrasting with traditional CLMM—ALMM uses AI strategies to analyze market volatility in real-time. When volatility increases, AI automatically adjusts asset price distributions and rebalances LP capital into active trading zones. This not only offers traders lower slippage but also creates higher real yields for LPs. Meanwhile, AI monitors the mempool) to prevent MEV attacks.

Ferra Protocol, in October 2025, completed a $2 million pre-seed funding round led by Comma3 Ventures. Ferra launched the first dynamic liquidity AMM(DLMM) on Sui, featuring high modularity and complexity. Ferra integrates CLMM and DAMM(dynamic adjustment AMM) models, and introduces dynamic joint curves to enable fair token issuance and liquidity incentives. Ferra envisions becoming a dynamic liquidity layer on Sui, transforming capital from static storage into “living water” flowing freely with market sentiment and demand.

These liquidity infrastructure upgrades are shaping a more efficient and intelligent ecosystem financial system.

Internal Concerns: Warnings from DeFi Trust Crisis

However, Sui’s ecosystem expansion has not been smooth. The largest lending protocol, SuiLend, recently faced a buyback scam scandal, casting a shadow over the entire DeFi ecosystem and prompting deep community reflection on incentive mechanisms.

SuiLend was once a top lending protocol on Sui, with TVL approaching $750 million, accounting for 25% of the entire chain. But behind these impressive numbers, its token SEND has performed disappointingly. Despite generating $7.65 million in annualized revenue in 2025 and claiming that 100% of protocol fees would be used for buybacks, the SEND token price has fallen over 90% in the past year.

Since February 2025, SuiLend executed $3.47 million in buybacks, about 9% of circulating supply, but this has not provided the expected price support for the small-cap asset with a market cap of only $13 million. More concerning is community suspicion that buybacks involved insider trading, turning into a tool for the team to offload tokens. During the IKA collapse incident, SuiLend did not activate insurance funds and forcibly deducted 6% of user principal, further eroding trust.

Additionally, the protocol’s ongoing operation relies heavily on monthly subsidies from the Sui Foundation. The community generally views buyback strategies as a drop in the bucket—while they reduce token supply on the surface, they do not offset the high token issuance and early VC dumping pressure.

The case of SuiLend serves as a warning to the entire Sui DeFi ecosystem. Without genuine user growth and sustainable models, token buybacks are merely a façade masking ecosystem hollowing out. It reminds the market that beyond surface metrics like TVL and revenue, deeper scrutiny of governance, incentive structures, and user confidence is essential.

Conclusion: Trust, the Core Foundation of Ecosystem

Sui’s path to Wall Street is undoubtedly eye-catching, but at the same time, Sui is undergoing a transformation more difficult than gaining institutional recognition—shifting from a technical experiment to a trustworthy, mature ecosystem.

Data has already demonstrated Sui’s technical potential, but trust is the fundamental survival element of the ecosystem. Sui needs to balance innovation and reasonable valuation while strengthening ecosystem governance, reinforcing incentive mechanisms, and ensuring every promise is fulfilled and every user perceives real value.

When institutional capital knocks on the door, the core question for Sui is: can it establish a sufficiently solid trust foundation, allowing assets to flow on-chain with both high efficiency and genuine security? This will determine whether Sui can evolve from a fleeting tech star into a truly enduring market mainstay.