SUI Price Pumps, But Will VCs Dump on You? Analyst Weighs In

Sui Network has attracted interest from the crypto community with its rapid price growth. Per crypto analyst Gonzo (@GonzoXBT), SUI remains one of the most hyped blockchain projects.

Cryptocurrency project Sui Network has attracted attention within the crypto community thanks to its rapid price growth. According to crypto analyst Gonzo (@GonzoXBT), $SUI remains one of the most hyped blockchain projects.

Although the network still has the potential to grow, concerns are being raised about whether the project’s price surge is sustainable or if venture capitalists (VCs) are preparing to offload their holdings.

Sui was built on the technology that was originally designed for Libra, the stablecoin from Facebook that never launched. The blockchain uses a unique programming language called Sui Move, which is derived from the Move language that was used by Libra/Diem.

Move, which is based on Rust (also used by Solana), is designed to be more accessible to developers, especially those who are not familiar with Ethereum’s Solidity.

One of Sui’s key innovations is its parallel transaction execution, which increases throughput and allows for faster and cheaper transactions. This feature has led to comparisons with Solana, as both chains prioritize speed over decentralization.

However, Sui also has a strong focus on the gaming sector and has made strategic partnerships in the Asian market, which sets it apart from its competitors.

Despite the rapid adoption and rising Total Value Locked (TVL), concerns remain about the high proportion of locked tokens that are held by venture capitalists. Recently, Sui experienced a $114 million token unlock, which benefits VCs who initially purchased tokens at much lower prices, ranging from $0.03 to $0.10 per SUI.

As Gonzo points out, these early investors are likely sitting on significant profits, which could lead to them selling in large volumes. However, it is also worth noting that there are more token unlocks scheduled, which could give VCs an incentive to continue supporting the token’s price.

Monitoring future TVL and partnership announcements will be key in determining SUI’s long-term potential.

While Sui’s TVL is growing, it is still less than one-fifth of Solana’s TVL, which makes direct comparisons between the two projects valuable. Interestingly, SUI’s market cap-to-TVL ratio is about three times lower than Solana’s, which could indicate that the token has more room to grow.

However, Gonzo warns that a lot of the capital on the Sui network is not “sticky,” meaning it could leave the ecosystem if better opportunities arise elsewhere.

Gonzo advises investors to keep a close eye on TVL changes, especially using platforms like DeFiLlama, to assess the network’s potential for further growth.

Additionally, he highlights that while metrics like active addresses and DEX volumes are useful, they may be less indicative on chains with low fees like Sui.

Sui's rapid rise has also attracted attention in the memecoin space. Gonzo specifically mentioned $FUD, a meme token on Sui that has seen a 400% price increase since September. With a market cap of $46 million, $FUD still has room to grow compared to its rival $HIPPO, which boasts a market cap of $150 million.

With SUI expanding its ecosystem, the coming months will be crucial in determining whether the token can maintain its current momentum or if investors will see a sell-off from early venture capital backers.

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