SUI Name Service (NS) big pump, project potential explosion or a flash in the pan?

Introduction

The NS token skyrocketed by 103% in just one hour, breaking through 0.43 USDT and then slightly falling back to the current price of 0.38 USDT. This surge has attracted widespread attention and surprised many retail investors: why has a relatively unknown blockchain domain token suddenly become the focus of the market? This article will analyze in depth the technical advantages and economic models of NS, compare it with Ethereum Name Service (ENS), and finally discuss whether the blockchain domain race has investment potential.

Massive whale liquidation triggers a surge

The surge of NS is not entirely driven by the token economic model, but by the fund operation of whales, a situation quite similar to the past GameStop event. At that time, whales quickly created a short-term frenzy in the market through large-scale replenishment and airdrops of positions.


A whale will invest funds in the Navi platform in early 2025 and use NS as collateral for loans, while taking short positions on the exchange. The whale first lends out NS, sells short, then uses the profits to repay the loan and re-mortgage NS, forming a continuous cycle of capital operations. However, the space for this operation is gradually drying up. If other investors begin to withdraw their NS on Navi, the whale's short position may face rapid liquidation.

According to on-chain data, the sharp rise on February 20 was precisely due to a whale or a group of whales repurchasing 75,000 NS tokens per minute, attempting to cover short positions and repay loans, which triggered intense price fluctuations. During this process, retail investors' collective counterattack played a role in fueling the situation, similar to the 'squeeze' effect in the stock market, causing the price to temporarily surge to 0.43 USDT.

Although this situation may seem to provide retail investors with short-term profit opportunities, it also hides significant risks. The giant whales' replenishment and airdrop behavior may create an unstable capital cycle in the market, and if retail investors and investors withdraw their NS one after another, the giant whales' short positions may be quickly liquidated, thereby exacerbating price fluctuations. Therefore, this type of market surge is both an opportunity and may also be a bubble.

) What is NS? Blockchain domain name service in the Sui ecosystem

The Sui Name Service (NS) is a core technology in the Sui ecosystem, providing users with a simple and easy-to-remember blockchain address solution. In the world of blockchain, long strings of addresses can be headache-inducing, and the goal of NS is to make these complex addresses more concise and recognizable. For example, an address on Sui like "0xd77861e972e02feb0927611eb934b67a1f9e60782e36cdef61f6779919b6a8cd" might confuse you, but through NS, you can convert it into a short identifier like "@john" or "john.sui", similar to creating a username on social media, except it is completely decentralized and operates on the Sui blockchain.

Developed by the Mysten Labs team, NS utilizes the high-performance architecture of the Sui blockchain to achieve a speed of up to 100,000 transactions per second, enabling it to handle a large number of transactions. Users only need to pay about 20 SUI (equivalent to a few US dollars) to register a domain name, and the V2 upgrade in June 2024 also added subdomain functionality, making naming more flexible, similar to "@john.family". The core mission of NS is to provide a decentralized "domain yellow pages" for Web3, providing more convenient digital identity and asset management for the blockchain world.

NS vs. ENS: The Showdown between the Rookie and the Big Brother

To understand the potential of NS, let's compare it with the veteran giant in the blockchain domain name space, ENS. As a core project in the Ethereum ecosystem, ENS had already established its dominance in the domain market as early as 2021. It provides users with concise addresses like 'vitalik.eth.' Leveraging Ethereum's vast ecosystem and first-mover advantage, ENS has become the most popular domain name service in the blockchain world. ENS has registered over 2.6 million domain names to date, with prices soaring from the initial $43 to $85.69 in November 2021, then falling back to $6.7 in the bear market (October 2023), and now recovering in the $25-35 range.

However, ENS also faces some challenges. The most significant weakness is the high Gas fees, which often result in annual domain registration costs ranging from $5 to $640, with short domain names being particularly expensive, often requiring 300 ETH (hundreds of thousands of dollars). In addition, due to Ethereum's transaction speed and fee issues, the registration and usage costs of ENS are relatively high for ordinary users.

![Sui Name Service ###NS( skyrocketed, is the project's potential exploding or just a flash in the pan? ])https://img.gateio.im/social/moments-7b42e09d393e5785437abbbc40eefe02(

Unlike ENS, NS operates on the Sui blockchain with significant advantages. Sui is known for its high-performance transaction architecture, with transaction speeds easily reaching 100,000 per second, giving NS a huge edge in cost and efficiency. Registering a domain name similar to "@john" with NS costs only a few dollars, while the Gas fees are almost negligible. Thanks to the rapid development and low-cost advantages of the Sui ecosystem, NS is likely to experience rapid growth in emerging markets.

However, the NS ecosystem is not as mature as ENS, with a user base and market size far behind ENS. Retail investors need to be patient and wait for its gradual development in the ecosystem.

) Domain Race: The 'ID Hot' of Web3, Potential and Risks Coexist

Blockchain domain names are rapidly becoming one of the infrastructure of the Web3 ecosystem, similar to the Domain Name System (DNS) in traditional Internet. It not only simplifies complex blockchain addresses but also provides a decentralized and verifiable identity system for decentralized applications (DApps), NFTs, and digital assets. Just like .com domain names in the 1990s became scarce assets in the Internet, blockchain domain names may become the "digital ID cards" in the Web3 space. With the surge in Web3 users, the market demand for blockchain domain names will also rise.

In this field, NS and ENS represent two different competitive strategies. ENS, as a leader in the Ethereum ecosystem, has become the "big brother" of blockchain domains with Ethereum's powerful ecosystem and first-mover advantage. It has currently registered over 2.6 million domains and firmly locked in the high-end market through its integrated wallets, DApps, and NFT use cases. However, ENS's high gas fees and higher registration costs are still its main weaknesses, especially for ordinary users, as domain registration costs are relatively high.

By contrast, NS relies on the high performance and low cost advantages of the Sui blockchain, demonstrating strong competitiveness in the market. The transaction speed of the Sui blockchain is extremely fast, registering a domain name costs only a few US dollars, and the Gas fee is almost negligible, making it highly attractive in emerging markets. However, NS is still in the early stages of development, with an ecosystem and user base far behind ENS, so investors need to remain cautious.

Overall, although the market has huge potential, speculative activities and regulatory changes may still pose risks to investors. Nevertheless, blockchain domains remain a crucial cornerstone of the Web3 ecosystem, and those who can accurately grasp market demands can profit in this field.

Conclusion: This surge is only a temporary opportunity, and risks still exist

Despite the high attention drawn by the short-term sharp rise of NS in the market, this price surge may simply be a short-term volatility caused by the massive whale liquidation of positions. Similar to the 'squeeze effect' in the stock market, whales conduct large-scale buybacks to cover short positions, pushing up prices, but this fluctuation is likely temporary and unsustainable. Although retail investors have gained relatively high returns in the short term, the risks behind this surge should not be ignored.

With the fluctuation of market sentiment and the restriction of circulation, NS may face the risk of price correction, especially when the operation of the whales ends, the market support may weaken. Therefore, although NS has potential in the Sui ecosystem, investors must remain cautious and not be induced by short-term price fluctuations. For investors who hope to hold long-term, they should pay close attention to the long-term development of the project, technological progress, and ecosystem construction, rather than just rely on short-term market popularity.

In the cryptocurrency market, opportunities and risks always coexist, investors need to make rational judgments and do risk management. The future of NS is still full of uncertainties, and this surge is just a brief scene in the cryptocurrency market, not necessarily sustainable. Therefore, it is recommended that retail investors stay clear-headed when participating, avoid blindly chasing highs, to avoid the risks brought by short-term bubbles.