Many people are puzzled as to why new public chains such as SuiNetwork perform so well. In my opinion, the pump is just a superficial phenomenon. The reason behind it lies in the unique "bloodline advantage" of the Move public chain and the new DeFi ecosystem that is expected to explode. Why?
Next, I will briefly analyze the advantages of the Move public chain, and take the two major projects of the Sui ecosystem: Scallop and NAVI Protocol as examples to explore the possibility of an ecological explosion on the Sui chain.
Solidity is a common language for building various types of smart contracts on Ethereum, and has a large developer base. As a latecomer, Move has obvious advantages in resource handling, security, and modularity, and is particularly suitable for financial applications.
1) The Move language introduces a resource model, where each object is considered a unique entity, which provides greater security.
2) Move provides a strict type system and ownership model, which helps to detect and prevent various vulnerabilities at compile time, and is particularly suitable for handling complex financial transactions;
3) Move supports highly modular and composable features, allowing developers to create interoperable modules and libraries.
In general, the Move language has strong security, scalability, and efficient state management features, and is a native underlying language suitable for DeFi financial products. This is the key to the popularity of the Move public chain in this round of trends, which can be called a unique "bloodline advantage", but whether the Move public chain can prove its market potential, the rise of the public chain Token $SUI must be supported by a strong ecosystem, otherwise it will be a castle in the air.
Next, I screened @Scallop_io, which ranked first in TVL on the Sui ecosystem on DefiLlama, and @navi_protocol, which ranked second. Please judge, is there any potential for the new DeFi ecosystem on Sui to explode?
Scallop
1) Innovative model: Scallop currently has a TVL of 63.5M and adopts the model of Compound V3 + Solend V2. It will isolate the asset pool and the mortgage pool, and cannot be circulated for lending, ensuring that users can withdraw collateral at any time, with high security;
2) Product features: 1. Using the SUI network features, users are provided with main accounts and sub-accounts, which facilitates asset isolation and portfolio management; 2. Inheriting the Scallop Tool, users can easily complete multiple transactions on one interface; 3. The interface displays rich information and can serve professional users based on SDK.
It is worth mentioning that the account separation feature is that SUI adopts the unique account model of the Move language, which is centered on the Object object. Different from the feature of EVM managing "balance", Object can manage specific objects, such as Sui homogeneous tokens, which can manage the transfer, issuance, destruction of Sui and the interaction records between Sui and all addresses in a global state. Therefore, it is completely fine for users to set up multiple accounts to manage assets. The Sui object will clearly record and manage the status of a user having multiple accounts.
3) DeFi complexity design: 1. Scallop implements a three-line dynamic interest rate model for over-collateralized lending, optimizing interest rate stability; 2. Scallop is highly composable and extensible. Users can get corresponding sCoins by executing collateral, and sCoins can flow into the yield aggregator as derivatives for circulation. Currently, multiple yield aggregators have access to Scallop-based liquidity, such as Typus and Kai Finance; 3. Scallop adopts a decentralized security oracle mechanism, uses a scalable multi-oracle consensus strategy to increase the cost of attacks, effectively avoids price manipulation attacks, supports multiple oracles such as Pyth, Switchboard, and Supra Oracle, and fully utilizes the composability of Sui Move;
Just to give a special example: Ethereum DeFi has a large number of price manipulation attacks every year due to the depth of various AMM trading pools and the inability of oracles to correctly weigh the price feed according to time and transaction volume. Many people even believe that these are still legal and controllable arbitrage behaviors. In the Sui ecosystem, strong modularity and composability can help it reduce such problems.
NAVI Protocol
1) Basic model: Navi currently has a TVL of 54M. It is a one-stop liquidity protocol based on Aave V3. It can be circulated and borrowed, which can make the utilization of funds more efficient, and the corresponding potential risks will also increase;
2) Product features: 1. Leveraged vault, automated leverage, users can repeatedly borrow assets for short or long positions, avoiding repeated operations; 2. Isolation mode, also based on the features of Sui Move, new assets will be launched after approval by the governance vote; 3. Simple design, friendly to novice users.
It should be noted that automated leverage can be achieved thanks to the language features of Move. Users can accurately authorize a specific token to a smart contract without worrying about other assets being illegally accessed. In addition, the smart contract can perform multiple repeated operations on the loan token according to the set logic and rules, and can manage the status in real time during the process, thereby achieving automated leverage.
If automation is to be achieved in the EVM system, an Approve operation is required, which can easily lead to security risks. However, once the right to use an Object is granted in Move, there is no need for repeated authorization for each transaction.
3) DeFi’s exclusive features can achieve low annual interest rate asset lending and relatively high mining returns. This is actually due to its efficient application of the native asset Token model. Users can get discounts on lending fees by staking native assets. In addition, NAVI has adopted Curve’s Ve model, allowing its veNAVI to play an efficient role in user voting, LP pool incentives, etc. In addition, NAVI uses a single oracle in oracle design, which is highly efficient but has certain risks similar to those in the EVM environment. It may not be as effective as a combination of multiple oracles in dealing with price manipulation.
