SPAM mining transactions help Sui's trading volume surpass Solana, but are caught in a wave of traffic?

Author: Frank, PANews

Just as the founder of Cyber Capital questioned the token model, Sui suddenly rose in data, with the number of transactions on the Sui mainnet exceeding 40 million on May 3, a 20-fold increase from 1.85 million on May 1. This figure surpasses that of active public chains, including Solana. In the following days, the number of transactions on the Sui mainnet continued to maintain above 30 million, leading all public chains.

Does this surge in data mean that Sui has truly ushered in an explosion in its ecosystem?

SPAM Has Generated Over 100 Million Transactions

According to an investigation by PANews, the surge in Sui's data mainly stems from a project within the ecosystem that mines transaction volume called SPAM (meaning junk mail). This project officially launched on May 2, bringing 3,800 transactions to Sui on its first day. As of May 8, the project has generated a total of 147 million transactions, contributing approximately $120,000 in transaction fee revenue to the mainnet.

In addition to transaction volume, SPAM has also brought a significant increase in active addresses for Sui. On April 29, Sui had about 12,000 daily active addresses, which grew to 73,000 by May 6.

Clearly, SPAM and Sui's official team are in a mutually beneficial collaboration. The project was initiated by Juzy, the founder of Polymedia, and on May 5, Sui's official Twitter account retweeted two posts introducing SPAM, bringing a wave of traffic to SPAM. Correspondingly, SPAM's frequent volume-boosting activities have pushed Sui's transaction volume and TPS to new heights.

In a subsequent discussion about TPS exceeding 800+, Sui's official team stated that Sui can fully support the TPS required by SPAM.

Users Digging Themselves Deeper into Losses

However, in the mining battle of SPAM, the biggest winners may only be Sui and the RPC nodes.

According to PANews' tests, participating in this mining activity is essentially a losing proposition.

The introduction of SPAM states that users can earn SPAM by sending transactions on Sui, with a mechanism of minting 1 billion SPAM tokens daily. The more transactions sent, the more SPAM earned. According to PANews statistics, since its launch, SPAM has completed 147 million transactions, mining 3.5 billion tokens. On average, each transaction can mine 23 SPAM tokens.

Based on PANews statistics, since the token's launch, the earnings generated from mining have been lower than the transaction fees incurred. For mining users, it merely helps Sui's mainnet refresh its transaction volume and fees.

(Note: Since SPAM launched on May 5, the prices from May 3 to May 5 are calculated using the closing price on May 5.)

Due to SPAM's token issuance mechanism of adding 1 billion tokens daily, many users believe this will lead to significant inflation, ultimately causing prices to continue to fall. The explanation from SPAM's founder is akin to a statistical genius: "Because the supply of SPAM is increasing every day, but the new supply added each day is constant. On the 10th day, there is a supply of 10B, and 1B will be minted (daily inflation of 10%); on the 100th day, there will be a supply of 100B, and 1B will be minted (daily inflation of 1%)." His point is that although the number of SPAM increases daily, this does not count as inflation; rather, because the total number is increasing, the inflation rate is decreasing. Juzy also posted a diagram illustrating the inflation rate.

PANews created a chart of the token quantity changes based on actual inflation changes, which happens to be the opposite of Juzy's curve.

However, the price curve of SPAM perfectly coincides with Juzy's inflation curve, continuously declining since its launch, from a high of 0.0002113 down to 0.00001532. The maximum drop is 92.7%. As of May 7, its circulating market cap was only $63,700, while the liquidity pool of the trading pool was just $26,000.

Mining Projects Caught in a Wave of Traffic

Of course, for public chains, the true test of ecosystem activity and technical capability is not solely based on transaction numbers and TPS. As of May 7, the total number of tokens issued on the Sui chain was 10,811, while the number of new tokens on the Solana chain on May 5 was 13,642. In terms of active users, Sui's highest number of active addresses in the past week was 73,000, while Solana's active addresses were consistently above 800,000.

In terms of TVL, Solana currently has a TVL of about $4 billion, while Sui's data is around $640 million. After multiple comparisons, it was found that the overall data gap between Sui and Solana still exists at nearly 10 times.

Moreover, within 24 hours (data time from May 6, 17:00 to May 7, 17:00), among the 11 newly launched trading pairs on Sui, the number of traders was only 1 to 2. It seems that this phenomenon-level product SPAM has not brought true ecological prosperity to Sui.

For Sui's official team, it may need to consider supporting some truly innovative projects with sustainable positive feedback.