Behind the Prosperity of the Sui Ecosystem: Token Incentives and Decentralized Finance Project Dynamics

Recently, the price performance of Sui's native token SUI has been remarkable, reaching a peak of $1.36, almost back to its highest level since launch, surpassing its competitor in the MOVE ecosystem. At the same time, Sui's Total Value Locked (TVL) has also shown a steady upward trend, breaking $275 million on January 13 and reaching $282 million.

Behind this growth trend, the Sui Foundation is promoting ecological development through various means, including developer funding programs, project funding programs, and educational support. As of January 12, a total of 86 projects have received a total of $4.72 million in funding. In addition, Sui has also provided additional support for liquid staking, having announced a contribution of 25 million SUI Tokens to add liquidity for liquid staking tokens (LST) in various DeFi protocols.

Sui seems to be continuously providing token incentives for leading DeFi projects, with almost all top DeFi projects offering official allocations of SUI token rewards. This ecological development strategy may create a virtuous cycle: the foundation incentivizes liquidity with tokens, promotes ecological development, and in turn drives up the price of SUI.

Here are the latest updates on several major DeFi projects in the Sui ecosystem:

1. NAVI Protocol: As a rapidly growing lending protocol, NAVI's TVL has increased by 208% over the past month. Users can earn SUI Token incentives through deposits and loans, and even engage in circular lending arbitrage. The protocol has not yet issued its own governance token, which is expected to be released in the first or second quarter of 2024.

2. Cetus: As the largest DEX on Sui, Cetus has long held the top spot in Sui TVL. It has a close relationship with the Sui official team and has co-hosted multiple events. During times of significant market fluctuations, trading pairs on Cetus can generate considerable yields, but non-stablecoin pairs may face substantial impermanent loss risks.

3. Scallop: This is another lending protocol where users can earn SUI Token rewards by depositing funds. Currently, its TVL is $42.94 million, with deposits of $46.11 million and loans of only $3.16 million. Scallop has not yet launched its own governance token.

4. DeepBook: As an order book DEX built by the Sui Foundation and the MovEx team, DeepBook's TVL has reached $33.52 million. It is regarded as a public infrastructure of the Sui ecosystem, allowing other Decentralized Finance protocols to integrate its liquidity.

5. FlowX Finance: FlowX is a DEX with a continuously growing TVL, currently at $29.26 million. Users providing liquidity can earn SUI Token rewards, and the annualized yield for stablecoin trading pairs can reach 36%.

6. Aftermath Finance: Aftermath provides LST, AMM DEX, and trading aggregator services, with a TVL of 27.98 million USD. Its liquidity primarily comes from the afSUI/SUI trading pair, and some liquidity pools can earn SUI token incentives.

7. KriyaDEX: This is a spot and perpetual contract DEX with a TVL of 20.14 million USD. Its features allow users to lock liquidity, with a longer locking period resulting in a higher annualized yield, up to 40.94%.

Overall, the projects with high TVL in the Sui ecosystem are mainly concentrated in three categories: liquid staking, lending, and DEX. Liquid staking projects can obtain additional liquidity support provided by Sui; lending projects like NAVI Protocol have recently experienced significant growth; while DEX projects are steadily developing, with Cetus still maintaining its leading position in the industry.