The supply of stablecoins on Sui has surged nearly 100 times over the course of a year, growing from $5.4 million to $490 million—making it the fastest-growing public blockchain in Web3.

Sui's daily active users exceed 1.7 million, growing faster than Ethereum and competing with Aptos, thanks to high-speed DeFi, institutional adoption, and aggressive liquidity incentives.

As capital inflows accelerate, is Sui positioning itself as the next dominant blockchain for stable digital assets? Let’s dive deeper into the analysis.

Table of Contents:

1. Introduction

2. Overview of Sui's Object-Based Model

3. SZNS's Indexing Solution

4. Growth Trajectory and Ecosystem Composition

5. In-Depth Analysis of Major Native Stablecoins

6. Stablecoin Supply Growth and Use Cases

7. Stablecoin Liquidity in Sui DeFi

8. Holder Distribution and Concentration

9. Beyond DeFi: Real-World Use Cases

10. Comparative Analysis: Sui vs. Other L1 Blockchains

11. Conclusion

Introduction

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

Its core technology—the next-generation Mysticeti consensus protocol, derived from Narwhal (mempool) and Tusk (consensus)—enables efficient transaction ordering and robust data availability. Sui has garnered significant attention from institutional investors and the DeFi community.

With new protocols launching monthly, the user base continues to expand through DeFi, gaming, and digital payments, with stablecoins being a core component of the Sui ecosystem.

Let’s take a deep dive into the Sui ecosystem and its development.

Key Highlights

• Market Capitalization ($SUI Stablecoins): Increased from $5.42 million in January 2024 to $555.15 million in February 2025.

• Stablecoin Adoption: Over five major tokens (native and cross-chain stablecoins), with native stablecoins accounting 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 with Account-Based Systems

In typical blockchains like Ethereum or BNB Chain, each account holds a static balance updated through a credit/debit system recorded in a ledger. In contrast, Sui adopts an object-based model where each item—user wallets, tokens, NFTs—exists as an object with unique attributes and ownership. Key implications for stablecoins include:

• Object Versioning: Each transaction creates a new version of the affected object, preserving a complete audit trail of state changes.

• Partial Transfers: Partial transfers may result in the creation of new objects (representing the transferred portion) while updating the balance of the original object.

• Ownership Transfer: The transfer of stablecoins means transferring the ownership of the object (or 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 techniques to accurately track stablecoin supply, distribution, and historical balances.

How Object Versioning and Partial Transfers Work in Sui

Below is a conceptual diagram illustrating how a partial transfer of stablecoins (or any Sui-based token) creates new object versions and ownership changes.

• Original Object (Object0):

• Balance of 100 tokens (e.g., stablecoins).

• Owned by Alice (represented internally in the object by the owner field).

Partial Transfer of 30 Tokens:

• Unlike simply deducting 30 tokens from Alice's balance and adding them to Bob's, Sui modifies Object0, reducing its balance to 70 and creating 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*).

Versioning:

• Object0* is the updated version (version 2) of the original token object, while ObjectX is a brand new object.

• The original version of Object0 remains in historical storage for auditing, but its state has been "replaced" by Object0*.

3. SZNS's Indexing Solution

SZNS is a data solutions provider specializing in handling Sui's unique object-based structure. Unlike traditional account-based blockchains, where balances are stored in a single ledger entry, Sui represents assets as objects, meaning each transaction updates and creates a new version of an object rather than merely changing the wallet balance.

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

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

Object-Level Balance Reconstruction

• Scanning all objects associated with wallets and retaining only the latest versions for real-time balance visibility.

• Archiving past states and old versions for historical queries (e.g., checking balances at a specific block height).

Unified DeFi Liquidity Mapping

• Identifying custom DeFi structures, such as pool objects, lending certificates, or custody contracts.

• Normalizing attributes (reserves, LP shares, fees) into a standard internal data model, simplifying liquidity comparisons across multiple protocols.

Exception Handling

• Supporting special cases, such as locking (staking) or delegating (staking) stablecoins.

• Introducing 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.

Step-by-Step Explanation

Data Ingestion

SZNS continuously monitors new transactions, block data, and state 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. Only the latest version of each object ID is retained in the "real-time" index. Old versions of each object are archived for historical lookup or forensic analysis (e.g., checking a wallet's balance at a specific block number or date).

DeFi Liquidity Mapper

Identifying protocol-specific object types related to DeFi:

• Pool objects for DEXs.

• Lending certificates for lending platforms.

• Custody contracts for dedicated yield farms or IDO platforms. Normalizing data into a standard internal model for cross-DeFi protocol comparisons. For example, "pool reserves" may be stored differently across two DEXs, but SZNS standardizes it to [tokenA_reserve, tokenB_reserve].

Exception Handler

• Locking or staking tokens until a future date for transfer.

• Delegating or staking tokens in dedicated contracts or staking modules.

• Any protocol-specific special cases (e.g., "rebase" stablecoins, partial collateral structures). These exceptions are tagged and categorized correctly to ensure they do not inflate or misrepresent the user's tradable stablecoin balance.

Final Aggregation and API

The data from the aforementioned steps is aggregated into a single repository. End users (wallet explorers, analytics dashboards, DeFi applications) can query SZNS's API for:

• Real-time stablecoin balances.

• Liquidity across DEXs, lending pools, and yield farms.

• Historical states (e.g., user balances on specific dates).

4. Growth Trajectory and Ecosystem Composition

Market Trends

From $5.42 million to $555.15 million, the total market capitalization of stablecoins on Sui highlights the robust growth of the ecosystem.

This growth reflects Sui's technological advantages and user-friendly design:

• Scalability: High throughput and low final confirmation times make Sui an ideal platform for stablecoin issuers seeking a seamless user experience.

• Institutional Confidence: Funds like VanEck and other large capital allocators have given positive evaluations of Sui's performance.

• Diverse Use Cases: In addition to DeFi, stablecoins on Sui are gaining increasing attention in gaming, cross-border payments, and the NFT market.

5. In-Depth Analysis of Major Native 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 highlights the strong growth of the ecosystem.

The Sui ecosystem is experiencing rapid growth, primarily driven by a surge in new accounts, strong DeFi adoption, and increased trading activity. In discussions with the head of Sui's ecosystem, it was mentioned that Sui is actively incentivizing the development of the DeFi ecosystem.

Despite the thriving DeFi sector driven by rising TVL, there has been a temporary slowdown in the creation of NFTs and tokens, attributed to market trends.

• User Growth: 7 million new accounts in 7 days (+104.91%), indicating strong adoption momentum.

• DeFi: TVL reached $1.26 billion, with Suilend leading at $387.5 million (which intersects with stablecoin supply).

• Ongoing Network Activity: Total transaction volume reached 8.49 billion, with a 24-hour increase of 11.8 million.

• Dominance of Stablecoins in DEX Pools: USDC/SUI (trading volume of $46.9 million) is the most active trading pair.

• Decline in NFT and Token Activity: New NFTs decreased by 47.98%, and new tokens decreased by 5.8%.

Additionally, Sui has surpassed Ethereum in daily active addresses and is gradually approaching Aptos. Its steady growth highlights the ongoing adoption in DeFi, gaming, and stablecoins, making it a strong L1 competitor.

• Rapid Growth of Sui: The number of daily active addresses on Sui reached 1.7 million, surpassing Ethereum (440,600) and gradually approaching Aptos (1.1 million), marking an increase in adoption rates.

• Stronger Market Position: Sui ranks third among the fastest-growing blockchains, ahead of major competitors like BNB Chain, Base, and Arbitrum.

• Competing with Leaders: Although Solana (5.3 million) and Near (3.3 million) lead, Sui's steady growth demonstrates its increasing influence in the blockchain space.

Overview of Sui Stablecoin Supply

The total market capitalization of Sui stablecoins is $495.1 million, with an increase of $15.82 million (3.30%) over the past 7 days, reflecting strong growth and sustained demand.

Starting in 2025, the steady rise in total market capitalization of stablecoins indicates growing market confidence in the Sui stablecoin ecosystem, with diversification into stablecoins like FDUSD and AUSD gradually gaining attention alongside USDC.

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

Notable Growth Performers:

• First Digital USD (FDUSD) grew by 24.35% in the past 7 days, indicating increased adoption.

• Ondo US Dollar Yield (USDY) trades at $1.09, rising 0.93% in 7 days, reflecting strong demand for yield chasing.

Underperforming Stablecoins:

• Tether (USDT) declined by -11.16% in the past 7 days, losing $1.86 million in market capitalization.

• Bucket Protocol (BUCK) decreased by -3.18%, possibly due to liquidity fluctuations.

Below is a detailed analysis of the three largest native stablecoins—AUSD, USDC (Sui native), and USDY—along with FDUSD and BUCK.

4.1 Supply Growth

The supply of stablecoins on Sui is surging, primarily driven by demand from DeFi protocols, institutional trust, and ecosystem incentives. Lending markets like Suilend and yield farms on Cetus are facilitating adoption, while Circle's issuance of USDC enhances credibility. AUSD and USDY are thriving with strong DeFi incentives, attracting liquidity and capital inflows.

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

Strong Supply Growth Driven by Protocols:

• DeFi Protocol Demand – Lending markets (e.g., Suilend) and DEX yield farms (e.g., Cetus) significantly drive the demand for stablecoins.

• Brand Trust and Partnerships – USDC on Sui enjoys institutional trust due to Circle's direct issuance, while AUSD and USDY have cultivated strong DeFi communities and incentive programs.

• Ecosystem Incentives – Sui-based protocols offer aggressive annual percentage rates (APRs) and liquidity mining rewards, driving capital inflows into stablecoins.

• AUSD and USDY primarily focus on DeFi, providing liquidity incentives to encourage capital inflows.

6. Stablecoin Growth and Use Cases, and Anchoring Mechanisms

AUSD

Anchoring Mechanism: Algorithmic + Collateralized

• AUSD adopts a hybrid approach. Part of the supply is backed by a basket of crypto assets held in a dedicated vault (typically including SUI tokens), while the algorithm stabilizes short-term price fluctuations.

• If the price deviates from $1, on-chain auctions or a "stability module" can rebalance AUSD by buying and selling collateral.

Collateral Model:

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

• The vault may accept mainstream assets bridged to Sui (e.g., BTC, ETH) or native SUI.

Major Use Cases:

• Lending: Depositors lock collateral to mint AUSD; borrowers can borrow AUSD based on their holdings.

• Yield Farming: AUSD liquidity pools often offer attractive annual percentage rates, especially in new or smaller DEXs competing for liquidity. Growth drivers:

• High yields on Suilend,

• Frequent trading incentives on DEXs,

• Cross-promotion activities with other DeFi dApps (e.g., early user rewards for AUSD).

USDC (Sui)

Anchoring Mechanism: Fiat-backed (Circle)

• USDC is redeemable for dollars at a 1:1 ratio, with dollars held in regulated bank accounts or short-term government bonds.

• Circle's comprehensive compliance and licensing framework extends to USDC on Sui, reducing credit and regulatory risks.

Regulatory Compliance:

• Circle's brand has established trust among institutional players.

• KYC/AML programs can be integrated, making it suitable for enterprise-level or B2B use cases.

Major Use Cases:

• Payment Systems: Merchants, payroll systems, and cross-border remittances can settle through Sui's throughput in seconds with minimal fees.

• Institutional DeFi: Due to its stable anchoring and brand reputation, lower-risk protocols or major brokerage services welcome USDC.

• Bridging: With Circle issuing USDC across multiple chains (Ethereum, Solana, Sui), large capital can flow seamlessly through official bridging solutions—further increasing liquidity. Growth drivers:

• Trusted brand (Circle),

• Sui's fast finality and low fees,

• Partnerships with dApps offering enterprise-friendly products (e.g., advanced compliance, custody solutions).

USDY

Anchoring Mechanism: Crypto-Collateralized

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

• Smart contracts automatically liquidate positions if the collateral ratio falls below a safe threshold, helping to maintain the peg.

Strong Annual Percentage Rates:

• Particularly popular on DEXs like Cetus, offering annual percentage rates 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).

Major Use Cases:

• High-yield liquidity provision: For users willing to accept the risks of crypto-collateralized pegs, USDY typically offers the most attractive yields.

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

• Aggressive liquidity mining,

• Partnerships with yield aggregation platforms (e.g., SuiYieldFarm),

• Acquiring bridging solutions to bring additional collateral from other chains (e.g., BTC, ETH).

FDUSD

Although not widely tracked in the analysis, FDUSD is a rapidly emerging stablecoin with a market cap exceeding $120 million:

Anchoring Mechanism and Collateral:

It may be fiat-backed or have quasi-fiat reserves, but specific details vary based on disclosures from the issuing entity.

Adoption Factors:

• Likely to see widespread use in Sui-based gaming ecosystems or dedicated DeFi protocols directly collaborating with FDUSD issuers.

• Based on user adoption data, it may integrate with payment solutions focused on the Asian market.

BUCK

• Currently with a market cap of about $39 million, BUCK is a smaller but notable stablecoin that adopts a hybrid model:

Hybrid Collateralization:

• Partially fiat-backed and partially crypto-backed. Some speculate it includes algorithmic elements, but official documentation has not fully confirmed this.

Major Use Cases:

• Initially used for dedicated yield farming programs or as a reward token for certain Sui-based P2E (play-to-earn) platforms.

Growth Potential:

• If BUCK establishes deeper partnerships with major DEXs or lending protocols, it could experience similar growth to AUSD or USDY.

7. Stablecoin Liquidity in Sui DeFi

5.1 Total Value Locked (TVL) Distribution

Below is the TVL distribution of the three main stablecoins—AUSD, USDC, and USDY—in leading DeFi protocols on Sui:

5.1.1 Observations

• AUSD is primarily locked in SUILEND (75.80%) due to its high lending annual percentage rate (approximately 11.19%).

• USDY is mainly used in CETUS (86.55%), attributed to attractive yield farming annual percentage rates (approximately 46.92%).

• USDC is distributed more evenly among CETUS, SUILEND, and NAVI, indicating broader acceptance and usage patterns.

5.1.2 Protocol Overview

@CetusProtocol: The leading DEX on Sui, known for its advanced AMM features and liquidity mining projects.

@suilendprotocol: A robust lending platform attracting stablecoin deposits with unique incentives.

@navi_protocol: Offers moderate annual percentage rates (approximately 5%), appealing to more conservative liquidity providers.

5.2 Liquidity Fragmentation and Emerging Solutions

• Fragmentation: Different stablecoins often thrive in different liquidity "pockets," driven by varying yields.

• Aggregation Platforms: New yield optimization tools (e.g., SuiVault, SuiYieldFarm) are emerging, allowing users to automatically compound across multiple protocols.

• Cross-Protocol Collateralization: Some lending markets now accept multiple stablecoins as collateral for each other, potentially reducing fragmentation over time.

8. Holder Distribution and Concentration

EOA (Externally Owned Address)

Despite the growth in total supply, ownership of stablecoins remains highly concentrated among a few addresses:

• AUSD: Largest holder (Wallet A): 47.4% of EOA holds the supply. Behavior: Primarily deploying funds in Suilend to take advantage of high annual percentage rates.

• USDC (Sui): Largest holder (Wallet D): 16.6%. The next five largest holders: account for about 25% of the total. Behavior: Actively providing liquidity across multiple DEXs (e.g., Cetus, Navi).

• USDY: Two wallets (Wallet B, Wallet C): together account for 94%. Behavior: Engaging in yield farming operations on CETUS, leveraging the protocol's 46.92% annual percentage rate.

9. Beyond DeFi: Real-World Use Cases

While DeFi remains the core driver of stablecoin adoption, Sui is actively expanding into gaming and payment solutions—two major areas for stablecoin usage.

7.1 Gaming: The Case of SuiPlay0x1

@SuiPlay aims to integrate Sui's blockchain technology into mainstream PC and console gaming.

Key Elements:

• NFT and token rewards: Assets earned by players through gameplay can be turned into NFTs or tokenized as credits on Sui.

• Stablecoin exit mechanism: Players wishing to cash out or convert these rewards into fiat can use stablecoins like USDC, AUSD, or USDY.

• Comparison with Steam: Steam's 132 million monthly active users far exceed the current Web3 gaming market (the 2024 Web3 gaming market is approximately $31.8 billion, compared to the overall PC gaming market of $60.84 billion).

• Future Potential: Collaborations with major publishers could attract millions of players, each requiring stablecoins for transactions or cashing out rewards.

• Example: A popular role-playing game might issue NFT-based skins that can be immediately sold for AUSD or USDC (Sui), linking real-world value with in-game achievements.

7.2 Payments and Financial Inclusion

Sui co-founder Kostas Krypto showcased a text message-based transaction mechanism designed for the unbanked:

• SMS transaction mechanism: Users with basic 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 before executing the transaction.

• Underbanked regions: Sub-Saharan Africa or Southeast Asia may see increased adoption of stablecoins as remittance and peer-to-peer payment options. This reduces reliance on traditional wire transfers or remittance operators, which often charge higher fees and settle more slowly.

• Issuer Opportunities: Local stablecoin issuers (e.g., AUSD, USDC on Sui) can integrate with local telecom companies or NGOs to provide a stable medium of exchange for everyday transactions. Collaborations with micro-lending institutions or local cooperatives can facilitate lending through stablecoins, promoting financial inclusion.

10. Comparative Analysis: Sui vs. Other L1 Blockchains

While this report focuses on Sui, a brief comparative table helps to contrast Sui's stablecoin growth with other major L1s like Ethereum, Solana, and Avalanche:

Key Points:

• Ethereum: The largest stablecoin ecosystem, but also the most expensive.

• Solana: Good scalability, but historically faced reliability challenges.

• Avalanche: Strong cross-chain bridging (e.g., subnets), but overall DeFi momentum is weaker compared to Ethereum.

• Sui: Combines low fees, a user-friendly developer ecosystem, and a rapidly growing stablecoin market, laying the groundwork for widespread adoption in gaming and payments.

11. Conclusion

Sui has evolved from an early-stage L1 blockchain into a rapidly growing ecosystem where stablecoins play a crucial role.

• Exponential market capitalization growth: From $5.42 million to $555.15 million, reflecting strong DeFi and institutional interest.

• Object-based nuances: While the architecture adds complexity to indexing, tools like SZNS make data insights into stablecoin metrics reliable.

• DeFi Dominance: High-yield protocols (Suilend, Cetus) drive capital flows into stablecoins, often leading to whale concentration.

• Expansion into gaming and payments: Initiatives like SuiPlay0x1 and SMS-based transaction projects open doors to mainstream markets and underbanked markets.

• Future Potential: Ongoing improvements—aggregation platforms, multi-chain collateralization, micropayment systems—could further expand the use of stablecoins.

As Sui continues to expand and explore new domains, stablecoins will remain central to achieving liquidity and stable on-chain commerce.

The next phase of Sui's development may position it as the preferred blockchain for global payments, gaming economies, and innovative DeFi products—all driven by stablecoins that provide trust and liquidity.

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