With over 1.7 million daily active users, Sui is growing faster than Ethereum and competing with Aptos, thanks to its high-speed DeFi, institutional adoption, and aggressive liquidity incentives.

1. Introduction

Since its founding in 2022 by former Meta engineers, @SuiNetwork has been developed into a high-throughput, low-latency Layer 1 blockchain that prioritises scalability, low fees, and user-centric design.

Its core technology - the next-generation Mysticeti consensus protocol, derived from Narwhal (mempool Tusk (consensus)) - enables efficient transaction sequencing and strong data availability. Sui has attracted widespread attention from institutional investors and the DeFi community.

With new protocols launched monthly and a user base that continues to expand through DeFi, gaming, and digital payments, stablecoins are the bread and butter of SUI’s ecosystem.

Let’s take a deeper look at the SUI ecosystem and its development.

Key Highlights

• Market Funding ($SUI Stablecoin): Increased from $5.42 million in January 2024 to $555.15 million in February 2025.
• Stablecoin adoption: With more than 5 major tokens (local and cross-chain stablecoins), local stablecoins account for 80.1% of Sui’s total supply.
• Ecosystem growth: Hackathons, developer rewards, and a range of gaming and payment projects showcase Sui’s broader vision.

2. Overview of Sui’s object-based model

2.1 Conceptual differences from account-based systems

In a typical blockchain like Ethereum or BNB Chain, each account holds a static balance that is updated via a credit/debit system recorded in the ledger. In contrast, Sui uses an object-based model, where each item—user wallet, token, NFT—exists as an object with unique properties and ownership. Key impacts on stablecoins include:

• Object version management: Each transaction creates a new version of the affected object. It preserves a complete audit trail of state changes.
• Complex transfer: A partial transfer may result in the creation of a new object (representing the transferred part), while updating the balance of the original object.
• Transfer of ownership: The transfer of a stablecoin means transferring ownership of the object (or a newly created sub-object) rather than updating a single “balance” field.

These principles underpin Sui’s reputation for flexibility and scalability, but they also require advanced indexing technology to accurately track stablecoin supply, distribution and historical balances.

How object versioning and partial transfer work in Sui

Below is a conceptual diagram showing how partial transfers of a stablecoin (or any Sui-based token) create new object versions and ownership changes.

Original object (Object0):

• The balance is 100 tokens (e.g. stablecoins).
• Owned by Alice (indicated internally by the owner field of the object).

Partial transfer of 30 tokens:

• Instead of simply deducting 30 tokens from Alice’s balance and adding it to Bob’s, Sui modifies Object0, which reduces its balance to 70, and creates a new object (ObjectX) with a balance of 30.
• Ownership of ObjectX is assigned to Bob, while Object0 remains owned by Alice (now a new version, Object0*).

Version management:

• Object0* is an updated version (version 2) of the original token object, while ObjectX is a completely new object.
• The original version of Object0 remains in the history store for auditing purposes, but its state has been “replaced” by Object0*.

3. SZNS Index Solution

SZNS is a data solutions provider that specializes in the Sui blockchain’s unique object-based structure. Unlike traditional account-based blockchains, where balances are stored in a single ledger entry, Sui represents assets as objects, which means each transaction updates and creates a new version of the object rather than just changing the wallet’s balance.

This object-centric model creates fundamental challenges for tracking and aggregating stablecoin balances, as stablecoin supply and liquidity are not neatly stored in a single contract but are distributed across multiple object states. SZNS solves these challenges by dynamically rebuilding token balances and indexing liquidity across multiple DeFi protocols on Sui.

From a high-level overview, SZNS addresses these challenges through a multi-layered approach:

Object level balance reconstruction

• Scans all objects associated with the wallet and keeps only the latest versions so balances can be viewed in real time.
• Past states and older versions are archived and used for historical queries (e.g., viewing balances at a specific block height).

Unified DeFi Liquidity Mapping

• Identify custom DeFi structures such as pool objects, lending notes, or escrow contracts.
• Normalizing attributes (reserves, LP shares, fees) into a standard internal data model makes it easier to compare liquidity across multiple protocols.

Exception handling

• Supports special situations such as locking (staking) or entrusting (staking) stablecoins.
• Introduce specialized logic for protocols with non-standard object structures to ensure minimal data loss.

By aggregating data from these indexing pipelines, SZNS can reliably present the latest stablecoin metrics – key to understanding ecosystem liquidity flows and user behavior.

A step-by-step guide

data ingestion

SZNS continuously monitors new transactions, block data and status changes on the Sui blockchain.

Relevant information (e.g., object creation, ownership changes, balance updates) is extracted into the indexer.

Object level scanner (balance reconstruction)

The indexer queries all objects owned by each wallet.

Keep only the latest version of each object ID in the “live” index.

Older versions of each object are archived for historical lookup or forensic analysis (e.g., viewing a wallet’s balance at a specific block number or date).

DeFi Liquidity Mapper

Identify protocol-specific object types relevant to DeFi:

• DEX pool object.
• Loan voucher from the lending platform.

Custodial contracts for dedicated yield farms or IDO platforms.

Normalize data into a standard internal model for comparison across DeFi protocols.

• For example, the “pool reserve” may be stored differently on the two DEXs, but SZNS normalizes it to [tokenA_reserve, tokenB_reserve].

Exception handler

• Tokens are locked or staked so that they cannot be transferred until a future date.
• Delegate or stake tokens, in a dedicated contract or staking module.

Any protocol-specific special circumstances (e.g., “heavy-benchmarked” stablecoins, partially collateralized structures).

• These anomalies are flagged and properly classified to ensure they do not inflate or misrepresent a user’s tradable stablecoin balance.

Final aggregation and API

Data from the previous steps are aggregated into a single warehouse.

End users (wallet browsers, analysis dashboards, DeFi applications) can query the API of SZNS to obtain:

• Real-time stablecoin balances.
• Liquidity across DEXs, lending pools and yield farms.
• Historical status (for example, a user’s balance on a specific date).

4. Growth trajectory and ecosystem composition

Market trends

From $5.42 million to $555.15 million, the total market capitalization of stablecoins on Sui in just over a year highlights the strong growth of the ecosystem.

This growth is a reflection of Sui’s technical strengths and user-friendly design:

• Scalability: High throughput and low final confirmation times make Sui an ideal platform for stablecoin issuers looking for a seamless user experience.
• Institutional confidence: Funds like VanEck and other large capital allocators have given positive reviews of Sui’s performance.
• Diverse application scenarios: In addition to DeFi, stablecoins on Sui have also gained more and more attention in the gaming, cross-border payment and NFT markets.

5. In-depth analysis of major local stablecoins

Sui ranks seventh in 24-hour trading volume, surpassing Hyperliquid and Avalanche.

From $5.4 million to $490 million, the total market capitalization of stablecoins on Sui in just over a year highlights the strong growth of the ecosystem.

Sui’s ecosystem is experiencing rapid growth, driven primarily by a surge in new accounts, strong adoption of DeFi, and increased trading activity. I once communicated with the ecological leader of SUI. He said that SUI is vigorously stimulating the development of the Defi ecosystem.

While DeFi is booming on the back of rising TVL, there has been a temporary slowdown in the creation of NFTs and tokens, but this is the reason for the market trend.

• User growth: 7.5 million new accounts were added in 7 days (+104.91%), which shows strong adoption momentum.
• DeFi: TVL reached $1.26 billion, with Suilend leading the way, reaching $387.5 million (which will intersect with stablecoin supply).
• Ongoing network activity: The total transaction volume reached 8.49 billion, an increase of 11.8 million in 24 hours.
• Stablecoin dominance in DEX pools: USDC/SUI (volume $46.9 million) is the most active trading pair.
• NFT and token activity decline: The number of new NFTs dropped by 47.98%, and the number of new tokens dropped by 5.8%

In addition, Sui has surpassed Ethereum in terms of daily active addresses and is gradually approaching Aptos. Its steady growth highlights continued adoption in the DeFi, gaming, and stablecoin sectors, which makes it a strong L1 contender.

• Sui’s rapid growth: Sui’s daily active addresses reached 1.7 million. It surpasses Ethereum (440,600) and Aptos (1.1 million). This marks its increase in adoption.
• Stronger market position: Sui ranks third among the fastest-growing blockchains, ahead of major contenders such as BNB Chain, Base, and Arbitrum.
• Compete with the leaders: Although Solana (5.3 million) and Near (3.3 million) hold the lead, Sui’s steady growth demonstrates its growing influence in the blockchain space.

Sui Stablecoin Supply Overview

The total market capitalization of the Sui stablecoin is $495.1 million, an increase of $15.82 million (+3.30%) in 7 days, which reflects strong growth and continued demand.

Starting from 2025, the steady increase in the total market value of stablecoins indicates that the market has increased confidence in the Sui stablecoin ecosystem. In addition to USDC, the diversification of stablecoins such as FDUSD and AUSD is also gradually gaining attention.

USDC Dominance: USDC remains the most dominant stablecoin on Sui, accounting for 47.47% of the market share. It highlights its role as the preferred source of liquidity.

Significant growth performer：

• First Digital USD (FDUSD) has grown by 24.35% in the past seven days, showing increased adoption.
• Ondo US Dollar Yield (USDY) is trading at $1.09, up 0.93% in seven days, showing strong yield-seeking demand.

Underperforming Stablecoins：

• Tether (USDT) has dropped -11.16% in the past 7 days, losing $1.86 million in market capitalization.
• Bucket Protocol (BUCK) is down -3.18%, likely due to liquidity fluctuations.

Below is a detailed analysis of the three largest local stablecoins – AUSD, USDC (native to Sui) and USDY – as well as FDUSD and BUCK.

4.1 Supply growth

Stablecoin supply on Sui is surging, driven primarily by DeFi protocol demand, institutional trust, and ecosystem incentives. Lending marketplaces like Suilend and yield farms on Cetus are driving adoption, while Circle’s USDC issuance adds credibility. AUSD and USDY thrive with strong DeFi incentives and attract liquidity and capital inflows.

FDUSD (market cap over $120 million) and BUCK (market cap over $39 million) are also noteworthy stablecoins, but are less covered in the current analysis.

Strong supply growth is primarily driven by protocols:

• DeFi protocol requirements – Lending markets (e.g., Suilend) and DEX yield farms (e.g., Cetus) significantly drive demand for stablecoins.
• Brand trust and partnership – USDC on Sui enjoys institutional trust due to direct issuance by Circle, while AUSD and USDY foster strong DeFi communities and incentive programs.
• Ecosystem incentives – The Sui-based protocol offers aggressive APR and liquidity mining rewards. This drives funds into stablecoins.
• AUSD and USDY Mainly focuses on DeFi. They provide liquidity incentives and encouraging capital inflows.

6. Stablecoin growth, use cases, and anchoring mechanisms

AUSD

Anchoring mechanism: Algorithm + Mortgage

• AUSD adopts a hybrid approach. A portion of the supply is backed by a basket of crypto-assets (often including SUI tokens) held in specialized vaults, while the algorithmic portion stabilizes short-term price fluctuations.
• If the price deviates from $1, an on-chain auction or “stability module” can rebalance AUSD by buying and selling collateral.

Mortgage model：

• Typically over-collateralized, requiring users to deposit more than $1 in collateral for every AUSD minted.

• Vaults may accept mainstream assets bridged on Sui (e.g., BTC, ETH) or native SUI.

  Main use cases：

• Loan: Depositors lock up collateral to mint AUSD; borrowers can borrow AUSD against their positions.
• Yield farming: AUSD liquidity pools often offer attractive annualized yields, especially among new or smaller DEXs that compete for liquidity. Growth drivers：
• Suilend’s high returns
• Frequent trading incentives on DEX
• Cross-promotional activities with other DeFi dApps (e.g. early user rewards AUSD).

USDC (Sui)

Anchoring mechanism: Fiat currency support (Circle)

• USDC is exchanged for U.S. dollars on a 1:1 basis, and U.S. dollars are held in regulated bank accounts or short-term government bonds.
• Circle’s comprehensive compliance and permissioning framework extends to USDC on Sui. This reduces credit and regulatory risk.

Regulatory compliance：

• Circle’s brand builds trust among institutional players.
• KYC/AML procedures can be integrated, which makes it suitable for enterprise-level or B2B use cases.

Main use cases：

• Payment system: Merchants, payroll systems and cross-border remittances can be settled in seconds with minimal fees through Sui’s throughput.
• Institutional DeFi: Lower risk protocols or prime brokerage services welcome USDC due to its stable anchor and brand reputation.

Bridging: Since Circle issues USDC on multiple chains (Ethereum, Solana, Sui), large amounts of capital can flow seamlessly through official bridging solutions. This further increases liquidity.

• Growth drivers：
• Trusted Brand (Circle)
• Sui’s fast final confirmation and low fees
• Partnerships with dApps that offer enterprise-friendly products (e.g., advanced compliance, custody solutions).

USDY

Anchoring mechanism: Crypto Mortgage

• The $1 peg is maintained through over-collateralization of stable or blue-chip crypto assets (e.g., SUI, BTC, ETH).

Smart contracts automatically liquidate positions to help maintain the peg if the collateralization ratio falls below a safe threshold.

Strong APR：

• It is particularly popular on DEXs such as Cetus, providing annualized returns of up to 30%-50% for liquidity providers of USDY trading pairs.

• Some yield farming strategies allow for dual rewards (USDY + the protocol’s native governance token).

  Main use cases：

• High-yield liquidity provision: For those users who can accept the risk of crypto-staking pegs, USDY often offers the most attractive yields.

Trader Leverage: Traders can deposit crypto assets, mint USDY, and use the minted stablecoins to enter other positions, thus effectively leveraging their portfolios.

• Growth drivers：
• Radical liquidity mining
• Cooperation with yield aggregation platforms (e.g., SuiYieldFarm)
• Get bridging solutions to bring in additional collateral from other chains (e.g. BTC, ETH).

FDUSD

Although not widely tracked in analysis, FDUSD is a fast-rising stablecoin with a market cap of over $120 million:

Anchoring mechanism and mortgage：

May be fiat-backed or fiat-like reserves, but specific details vary based on disclosure by the issuing entity.

Adoption factors：

• May be widely used in Sui-based gaming ecosystems or dedicated DeFi protocols working directly with FDUSD issuers.
• Based on user adoption data, possible integration with payment solutions focusing on Asian markets.

BUCK

• With a current market cap of around $39 million, BUCK is a smaller but noteworthy stablecoin that uses a hybrid model:

Hybrid mortgage：

• Part of it is fiat-like support, and part of it is encryption support. Some speculation suggests it contains algorithmic elements, but official documentation doesn’t fully confirm this.

Main use cases：

• Initially used for dedicated yield farming programs or as reward tokens for some Sui-based P2E (Play to Earn) platforms

Growth potential：

• If BUCK develops deeper partnerships with major DEXs or lending protocols, it could see similar growth as AUSD or USDY.

7. Stablecoin Liquidity in Sui DeFi

7.1 Total Value Locked (TVL) Distribution

Here is the TVL distribution of the three major stablecoins in Sui’s leading DeFi protocol – AUSD, USDC and USDY:

7.1.1 Observation

• AUSD is mainly locked in SUILEND (75.80%) due to its high annualized lending rate (approximately 11.19%).
• USDY is mainly used in CETUS (86.55%) due to the attractive annualized yield (approximately 46.92%) from yield farming.
• USDC is more evenly distributed among CETUS, SUILEND, and NAVI. It shows wider acceptance and usage patterns.

7.1.2 Protocol Overview

• @CetusProtocol: The leading DEX on Sui, known for its advanced AMM features and liquidity mining projects.
• @suilendprotocol: A powerful lending platform that attracts stablecoin deposits with unique incentives.
• @navi_protocol: Provides a moderate annualized rate of return (approximately 5%) and attracts more conservative liquidity providers.

7.2 Liquidity fragmentation and emerging solutions

• Fragmentation: Different stablecoins typically thrive in different liquidity “pockets” that are driven by different yields.
• Aggregation platform: New yield optimization tools (e.g., SuiVault, SuiYieldFarm) are emerging that allow users to automatically compound interest across multiple protocols.
• Cross-protocol mortgage: Some lending markets now accept multiple stablecoins as collateral for each other, which potentially reduces fragmentation over time.

8. Distribution and concentration of holders

EOA (Externally Owned Address)

Despite growth in total supply, stablecoin ownership remains highly concentrated among a handful of addresses:

AUSD: Largest holder (Wallet A): 47.4% of the EOA holding supply.

Behavior: Mainly deploy funds in Suilend and take advantage of the high annualized rate of return.

USDC (Sui): Largest holder (Wallet D): 16.6%。

The next five largest holders: Approximately 25% of the total.

Behavior: Actively provide liquidity on multiple DEXs (such as Cetus, Navi, etc.).

USDY: Two wallets (Wallet B, Wallet C): Accounted for 94%.

Behavior: Perform yield farming operations on CETUS and take advantage of the protocol’s 46.92% annualized rate of return.

9. Beyond DeFi: Real-World Use Cases

While DeFi remains a core driver of stablecoin adoption, Sui is actively expanding into gaming and payment solutions – both of which are major areas of stablecoin usage.

9.1 Game: Case of SuiPlay0x1

@SuiPlay aims to integrate Sui’s blockchain technology into mainstream PC and console games.

Key elements:

• NFT and Token Rewards: The assets players obtain through the game can be converted into NFT or tokenized into credits on Sui.
• Stablecoin exit mechanism: Players who wish to cash out or exchange these rewards for fiat currency can use stablecoins such as USDC, AUSD or USDY.
• Comparison with Steam: Steam’s 132 million monthly active users far exceed the current Web3 game market (the Web3 game market in 2024 will be approximately US$31.8 billion, compared to the overall PC game market of US$60.84 billion).
• Future potential: Partnerships with large publishers may attract millions of players, each of whom will need stablecoins to trade or monetize rewards.
• Example: A popular role-playing game might hand out NFT-based skins that can be instantly sold for AUSD or USDC (Sui), connecting real-world value to in-game achievements.

9.2 Payments and financial inclusion

Suis’ co-founder Kostas Krypto demonstrates an SMS-based trading mechanism for the unbanked:

SMS transaction mechanism：

Users with basic mobile phones can send/receive stablecoins by sending specific commands or codes.

• The system checks the user’s Sui wallet object through off-chain or lightweight on-chain services and then executes the transaction.

Underbanked areas：

Sub-Saharan Africa or Southeast Asia may see increased adoption of stablecoins as remittance and peer-to-peer payment options.

• Reduced reliance on traditional wire or money transfer operators, which often charge higher fees and are slower to settle.

Issuer Opportunities：

Local stablecoin issuers (e.g. AUSD, USDC on Sui) can integrate with local telecommunications companies or non-governmental organizations (NGOs) to provide a stable medium of exchange for daily transactions.

• Partnerships with microfinance institutions or local cooperatives can drive financial inclusion by facilitating lending through stablecoins.

10. Comparative analysis: Sui and other L1 blockchains

While this report focuses on Sui, a brief comparison table helps compare Sui’s stablecoin growth to other major L1s like Ethereum, Solana, and Avalanche:

Key takeaways:

• Ethereum: The largest stablecoin ecosystem, but also the highest fees.
• Solana: Scales well but has historically faced reliability challenges.
• Avalanche: Strong cross-chain bridging (e.g., subnets), but overall DeFi momentum is weaker compared to Ethereum.
• Come on: combines low fees, a user-friendly developer ecosystem and a rapidly growing stablecoin market to lay the foundation for widespread adoption of gaming and payments.

11. Conclusion

Sui has grown from a preliminary L1 blockchain to a rapidly growing ecosystem in which stablecoins play a vital role.

• Exponential market capital growth: Growth from $5.42 million to $555.15 million, reflecting strong DeFi and institutional interest.
• Object-based nuances: Although the architecture adds complexity to indexing, tools like SZNS make data insights into stablecoin metrics reliable.
• DeFi dominance: High-yield protocols (Suilend, Cetus) drive stablecoin capital flows, often leading to concentrated whales.
• Expand into gaming and payments: Projects like SuiPlay0x1 and SMS-based trading have opened doors to mainstream and underbanked markets.
• Future potential: Ongoing improvements — aggregation platforms, multi-chain staking, micropayment systems — may further expand the use of stablecoins.

As Sui continues to expand and explore new territories, stablecoins will continue to play a central role in enabling liquid, stable on-chain commerce.

The next phase of Sui’s development could make it the blockchain of choice for global payments, gaming economies, and innovative DeFi products – all powered by stablecoins that provide trust and liquidity.

Disclaimer:

1. This article is reproduced from [Water Ni｜Asian bridge]. The copyright belongs to the original author [@arndxt_xo @nihaovand]. If you have any objections to the reprint, please contact the Gate Learn team, and the team will handle it as soon as possible according to relevant procedures.

2. Disclaimer: The views and opinions expressed in this article represent only the author’s personal views and do not constitute any investment advice.

3. Other language versions of the article are translated by the Gate Learn team and are not mentioned in Gate.io, the translated article may not be reproduced, distributed or plagiarized.