Sui blockchain ecosystem is currently taking huge strides in the Decentralized Finance (DeFi) space. NguyenMinhChau, a columnist known for demystifying blockchain, breaks down Sui's impressive growth, comparing it to established blockchains and highlighting both the opportunities and potential pitfalls for users. FearlessToken.com is all about providing the best analysis without the bullshit, and this article is no exception.
Understanding Sui's TVL Surge
Sui's Total Value Locked (TVL) has experienced remarkable growth, reflecting increased user trust, engagement, and liquidity within its DeFi ecosystem. At the time of writing in early March 2025, Sui had more than $1.2 billion in DeFi TVL. A few key factors explain this explosive growth. Retaining key assets, USDC, for example, are pivotal in establishing any trust, delivering what users need — stability — and what they know. Additionally, major partnerships, such as the one with World Liberty Financial (WLFI), a DeFi protocol inspired by Trump, could prove pivotal for Sui’s long-term expansion and adoption.
The DeFi market on Sui is thriving, with projects such as Navi Protocol, a large and popular lending platform, generating tons of activity. This expansion is spurred on by the growing adoption of stablecoins on the platform. Stablecoin adoption on Sui leaps from just $540k to over $4.9 million in a year. The majority of that remarkable increase occurred in the last quarter of 2024 and first quarter of 2025. This reflects a developing trust in Sui as a proven infrastructure for undertaking financial services. The surge of altcoins backing DeFi ecosystems has added to the boom of TVL, which more than doubled.
The tectonic shift of Sui’s underlying technology is equally as important to its appeal. Its blockchain infrastructure currently serves to create fast and low-cost transactions. With reduced transaction costs, this facet further bolsters its attractiveness among users seeking efficient and cost-effective DeFi alternatives. Sui has been witnessing remarkable TVL growth due to its technological edge and strategic ecosystem partnerships. This momentum is being driven by the expanding ecosystem of DeFi projects.
Sui vs. The Giants: Ethereum and Solana
Sui’s development numbers are jaw-dropping. We really need to bring this down to Earth by comparing it to real, production-grade blockchains like Ethereum and Solana. As of early March, 2025, Ethereum was still king with over $51 billion of DeFi TVL, while Sui struggled with a mere $1.2 billion. Ethereum’s eventual high gas fees and slower transaction speeds can prove to be a deterrent for some users.
Solana is still at the forefront of high-speed applications and memecoins. While there is no TVL data, it has managed to process a stunning 1.8 billion transactions. Unfortunately, Solana has a history of network congestion problems, which can cause serious issues for users on the network.
Sui seeks to fill this void with a combination of high speed, low cost transactions and an ecosystem that is rapidly expanding. It still has a long way to go to catch up with Ethereum’s Total Value Locked (TVL). Interestingly, its distinct characteristics and deep emphasis on scalability make it a dangerous player in the DeFi arena. NguyenMinhChau is bullish on the idea that Sui’s deep community roots and emphasis on Southeast Asian innovation will provide it with a distinct advantage in user attraction.
Benefits and Risks of Participating in Sui DeFi
For users looking to get involved in the Sui DeFi ecosystem, there are significant rewards but dangers lurking.
If you’re interested in diving into the Sui DeFi ecosystem, here are some tools and projects to check out. The Sui Wallet is the official cryptocurrency wallet for the Sui blockchain. Released back in August 2022, it acts as a great launching pad for new users. Scallop makes history as the first DeFi protocol in the world to be awarded an official grant by the Sui Foundation. It provides institution-grade quality, improves composability and maximizes security.
- Earn interest on deposited assets: Users can deposit supported crypto assets to earn interest, providing a passive income stream.
- Borrow against holdings with collateral: Users can borrow against their holdings with collateral, allowing them to access liquidity without selling their assets.
- Leveraged yield farming: Sui offers leveraged yield farming opportunities, potentially amplifying returns (but also increasing risk).
- Secure self-custody and staking options: Ledger integration provides secure self-custody and staking options for SUI, giving users greater control over their assets.
That means before leaping onto any DeFi platform, users need to be diligent. Lastly, they need to understand the associated risks and only engage financially as much as they can willing to lose. The FearlessToken.com team values your safety and security above all, so we urge you to explore the Sui DeFi ecosystem with a cautious, well-informed mindset.
- Erosion of Trust: The $223 million hack on Cetus Protocol shook investor confidence in Sui's DeFi ecosystem, highlighting the risk of security breaches.
- Liquidity Disruptions: The hack led to significant liquidity disruptions, with millions drained and platforms temporarily disabled, affecting users' ability to access their funds.
- Potential Centralization: Sui's tokenomics, with 50% of its 10 billion tokens locked until 2030, face scrutiny for potential centralization, which may impact the network's decentralization and security.
- Long-Term Developer Hesitation: The hack may deter developers from building on Sui, potentially leading to a decrease in the quality and quantity of DeFi projects on the platform.
- Risk of Developer and User Shift: As confidence wavers in Sui, developers and users may increasingly favor Ethereum and its Layer 2 solutions for building and trading DeFi assets, potentially leading to a loss of liquidity and activity on Sui's DeFi ecosystem.
Navigating the Sui Ecosystem
For those looking to explore the Sui DeFi ecosystem, there are several resources to consider. The Sui Wallet, the official cryptocurrency wallet for the Sui blockchain released in August 2022, is a good starting point. Additionally, projects like Scallop, the first DeFi protocol to receive an official grant from the Sui Foundation, offer institutional-grade quality, heightened composability, and robust security.
Before participating in any DeFi platform, users should conduct thorough research, understand the risks involved, and only invest what they can afford to lose. The FearlessToken.com team encourages readers to approach the Sui DeFi ecosystem with caution and a well-informed perspective.
