What’s Next for Sui in 2025

Sui has been one of the most talked-about L1s this cycle, garnering excitement over its roadmap plans and earning traction that has helped it pull ahead during a stormy time for prices.

Even when compared to other Move-based chains, Sui has had a stellar season as it has built out a robust foundation for its ecosystem that looks primed for future growth in 2025, with a series of major launches coming this quarter.

Let’s investigate these catalysts coming to Sui soon, ones that aim to bolster its DeFi suite, drive liquidity, expand its user base, and unlock support for new applications. 👇

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BanklessDavid C Aug 14, 2024 • 4 min read

1️⃣ Upgrading DeFi

While a series of upgrades are on the horizon for Sui’s DeFi, such as Aftermath’s perpetuals market launch and the continuation of the network’s institutional push, the upcoming automated market maker (AMM) Steamm from top-dog Suilend could juice Sui DeFi this quarter, attracting liquidity looking for highly efficient yields.

Traditionally, in AMMs, liquidity is provided across a range of prices for a trading pair. For example, if you provide liquidity for a USDC/SUI pool, your funds are distributed across all possible prices where trades might occur. However, trades only happen at specific price points, so much liquidity sits "idle" outside the active trading range. By introducing a “Bank” feature, Steamm channels these idle funds into Suilend’s lending pools, letting liquidity providers earn interest on capital not actively used for market making. This dual-purpose approach increases capital efficiency as providers collect yields from both trading fees and lending. Beyond increasing yield for liquidity providers, Steamm will also issue yield-bearing LP tokens, which other DeFi protocols on Sui can leverage for additional strategies, effectively recycling liquidity throughout the network.

2️⃣ Increasing Liquidity

A series of launches stand to drive substantial liquidity to Sui over the coming quarter, such as the launch of BTCfi protocol Babylon Labs (and the protocols built on top of it), as well as the mainnet deployment of multi-computation network Ika.

This cycle has seen a renewed attempt to unlock the trillions of dollars of capital siloed in Bitcoin, as whatever chain snags just a portion of this trove will get a substantial capital injection. Given Move’s security advantages, these chains offer an attractive environment for bridging liquidity, with Babylon and Lombard, a liquid Bitcoin staking protocol built on Babylon, announcing a strategic initiative to bring BTC to Sui. As Babylon’s largest protocol, Lombard has launched the LBTC wrapped bitcoin token, which accounts for ~$2.2B of Babylon’s ~$5.3B TVL. LBTC will allow Bitcoin holders to stake and earn yields while maintaining ownership of their BTC. Given Sui’s current ~$1.8B TVL, even a modest reallocation from Lombard or other Babylon-based protocols like SatLayer, which intend to launch on Sui as well, could significantly increase Sui’s overall liquidity. Further, with Babylon still working out the “demand-side” mechanics of its protocol, right now, BTC holders who stake through it or any of the applications on top of it are only awarded “points” for a presumed future airdrop.

A second avenue for more liquidity on Sui is Ika, a new network that takes multi-party computation (MPC) to another level. Unlike traditional bridges—which often rely on centralized points of trust—Ika uses a “2PC-MPC” model that spreads control over hundreds or even thousands of nodes, making it nearly impossible for any single entity to tamper with funds. By broadcasting messages rather than relying on one-to-one communication, Ika keeps transaction times low and can scale to thousands of signatures per second, all while remaining decentralized. This means assets like BTC, ETH, or SOL can move into Sui with fewer security worries and less congestion, letting developers tap into more cross-chain lending, staking, or trading options. The result is a more liquid, interconnected DeFi ecosystem, with Ika bridging Sui to the broader world of crypto without sacrificing speed or security.

3️⃣ Expanding the User Base

While increasing liquidity is vital, so is bringing in new users, which is where Phantom and Backpack wallets’ recently announced integrations come in. 

Phantom, renowned for its clean interface and broad support (Solana, Ethereum, and Bitcoin), has 7M monthly active users, almost as large as Sui’s total active accounts for the past 30 days. By adding Sui to Phantom, it will not only give those users a direct entry point to the chain, but also provide the network with a stamp of approval thanks to the strength of Phantom’s reputation. Meanwhile, Backpack wallet serves over 150 countries, while also boasting an exchange that has processed $60B in trading volume and will support Sui functionality.

Further, both wallets also provide mobile support, aligning with the growing trend of crypto users who prefer transacting via smartphones. As these integrations roll out, the barriers to using Sui will drop, increasing its distribution and setting it up to potentially gain more users.

4️⃣ Expanding the Use Cases

Developed by Sui creator Mysten Labs and expected to launch this quarter, Walrus will be a blockchain-agnostic, decentralized storage protocol that can broaden Sui’s capabilities beyond finance by enabling large-scale, media-rich data to be stored in a distributed manner. 

Walrus works through a process called Red Stuff erasure coding, which splits and disperses data across multiple nodes, reducing reliance on traditional centralized hosting. Thus, instead of making every Sui node hold massive files, Walrus offloads those blobs onto its own network, keeping Sui’s core ledger lean. By coordinating with the Sui blockchain for incentives and node management, Walrus can run efficiently without duplicating consensus or overloading storage.

This design opens up a wide range of possibilities. It will increase functionality for blockchain-based AI applications, which, through Walrus, can easily use decentralized data to train models for any use case. For media, Walrus provides a solution for storing content in a resilient, long-lasting environment, which continues to be a problem for digital content. Further, through Walrus Sites, developers can also build fully decentralized frontend websites that load their code and assets directly from Walrus, reducing reliance on traditional hosting. Even broader use cases, such as storing transaction history for high-speed chains or serving as a data availability layer for rollups, become possible on Walrus. 

By tackling the storage layer in a way that’s both cost-effective and highly scalable, Walrus paves the way for diverse applications that go beyond the typical DeFi and NFT focus, further expanding what’s achievable in Sui’s growing ecosystem.

Big Upgrades Ahead

While Sui’s immediate focus is on catalysts like Steamm’s capital-efficient AMM, Babylon/Lombard’s BTCfi liquidity, Ika’s cross-chain MPC, and Phantom/Backpack wallet integrations, the network’s evolution doesn’t end there. 

Deeper upgrades, like Mysticeti v2 and SIP-45, are also on the horizon. Mysticeti v2 refines Sui’s parallel transaction model, potentially unlocking faster confirmations for DeFi, gaming, and other resource-intensive applications. Meanwhile, SIP-45 addresses transaction fees during peak demand, proposing higher gas price limits and allowing users to pay extra for quick processing. This ensures vital actions don’t stall when network activity spikes.

Taken together, these developments tell of Sui’s broader ambitions. From boosting DeFi liquidity and user adoption to supporting large-scale data storage and advanced AI, Sui is laying a groundwork that extends beyond basic finance. As these protocols and upgrades go live, they stand to solidify Sui’s position as a versatile platform powered by the Move language — one poised to host not just crypto’s current use cases, but also the next generation of high-throughput, decentralized services.