Is Solana about to be dethroned? 👑

$SUI and $APT are coming for $SOL’s crown – but is this a battle they can realistically win? 👀

September 21, 2024

GM! Welcome to Milk Road PRO – the newsletter that collects crypto market insights, like a magpie collects shiny objects.

Solana holders…how often are you pinching yourselves?

It’s wild to think back to the start of 2023, when you could pick up $SOL for ~$10 per token.

Meanwhile in 2024, its year-to-date (YTD) range is sitting anywhere between $78-$209! 🤯 

There are very few assets that have been able to match Solana’s impressive performance over the last 12 months – and even though prices and sentiment cooled off after the March highs, it continues to deliver outstanding results.

Check out the chart below. 👇

[

Source: TradingView

As early as last September, $SOL was trading around $18. Now, it's around $148—a 747% increase. Not too bad, huh?

So what’s the key to $SOL’s success? 🤔 

It’s pretty simple: Solana delivers what people want—a fast blockchain with cheap transactions. 

Let’s take a step back to 2021. Back then, we saw the rise of so-called "$ETH-killers" like Solana, Avalanche, and Fantom – all promising fast and low-cost transactions. 

Ethereum was the dominant leader in smart contract blockchains, boasting the highest TVL, the largest developer community, the most users, and a vast ecosystem of apps. 

At that time, no other blockchain came close.

However, other Layer 1s saw an opportunity and attempted to challenge $ETH’s supremacy. For a while, it seemed like Solana might succeed, especially when you consider $SOL's performance against $ETH.

See the chart below. 

[

Source: TradingView

$SOL surged by an incredible +2,078% against $ETH, not just USD. That’s an outstanding performance!

But here’s the reality—many of these so-called $ETH killers once saw impressive gains against $ETH, but most are now nearing their all-time lows in comparison. 📉 

Expecting them to hit new highs against $ETH is wishful thinking. The truth is, challenging $ETH isn’t as easy as many make it out to be.

✅ Solana, however, is the exception. 

While most $ETH killers have struggled, Solana not only survived but thrived, filling a crucial gap in the market, by offering a fast and affordable blockchain. 

With its recent success, measured not just by price but across various key metrics, we could be on the verge of seeing a similar story unfold.

❓Now, it’s Solana’s turn to face its own challengers, like Aptos and SUI, which have launched blockchains with more efficient and secure programming languages.

The real question is: Can any of these new "$SOL killers" replicate Solana’s explosive rise from its first cycle, and give $SOL a run for its money? 

The stakes are high, and the race is on.

So today, let’s dive into the new Solana contenders, SUI and Aptos, and see how they stack up in the fight against Solana.

 THE ORIGIN STORY OF SUI AND APTOS

In June 2019, Facebook (now Meta) announced plans to create a permissioned blockchain and digital wallet for a global payment network. 

To achieve this, Meta led the Diem Association (formerly Libra Association) to build the blockchain, while its subsidiary, Novi Finance (formerly Calibra), was tasked with developing the digital wallet.

However, neither project fully materialized. Regulatory challenges forced Diem to shut down and sell its assets in January 2022. 💀

Later that year, Meta quietly ended the Novi project. Before their closure, several project leaders acknowledged that Meta's vision for a global payment network was likely doomed.

Despite these setbacks, the research from Diem and Novi led to the creation of two new blockchains: Aptos and SUI. 

Aptos continues the legacy of Diem by advancing its technology, while Mysten Labs, founded by former Novi leaders, created something entirely new with SUI.

Today, we’ll introduce you to both projects, compare them against each other, and then see how they measure up against Solana in the end. 🏁

P.S. - We’re hosting a PRO AMA next week — scroll to the bottom for more info. 👀

TEAMS

SUI

Mysten Labs, the team behind $SUI, was founded in 2021 by former Novi leads Evan Cheng, Adeniyi Abiodun, Sam Blackshear, George Danezis, and Kostas Chalkias. 

These founders bring deep expertise in software compilers, programming safety, distributed systems, cryptography, and cloud computing – with backgrounds at companies like Apple, Oracle, Microsoft, R3, and Facebook. 

Notably, co-founder Evan Cheng, a key figure in the development of SUI, received the ACM Software System Award for his work on LLVM, a technology widely used in Apple and Google devices.

APTOS

Aptos Labs was founded in December 2021 and launched in February 2022. 

It was co-founded by Mo Shaikh, former Head of Strategic Partnerships at Novi, and Avery Ching, Novi’s Principal Software Engineer with a background in supercomputing. 

Both founders brought significant experience from the blockchain and tech industries, with Shaikh previously leading strategy at Consensys and founding the blockchain-based real estate platform Meridio. 

The rest of the founding team included PhDs, researchers, engineers, and designers, many of whom had also worked on Diem or Novi.

💡 The founders of both projects share a common history at Facebook (Meta), and they seem to have an excellent founder-market fit.

This term refers to when a team is uniquely positioned to build something because they possess specialized experience and knowledge that few others have.

FUNDING

SUI

In December 2021, Mysten Labs raised $36M in a Series A round led by a16z, with participation from Redpoint, Lightspeed, Coinbase Ventures, and others. 

In September 2022, Mysten raised $300M in a Series B round at a valuation of over $2 billion, led by FTX Ventures with contributions from a16z, Jump Crypto, Binance Labs, and others.

✍️  SUI has raised over $330M in funding, with a valuation exceeding $2 billion.

APTOS

In March 2022, Aptos Labs raised $200M, launching its public devnet and open-source codebase. 

This funding round, led by a16z, included investors like Multicoin Capital, ParaFi Capital, and Coinbase Ventures. 

In July 2022, Aptos secured an additional $150M, raising its valuation to $2 billion. 

This round was led by FTX Ventures and Jump Crypto, with FTX's investments now under bankruptcy control. 

Additional investments from Binance Labs and Dragonfly Capital brought Aptos' total funding to around $400M.

✍️ Aptos has successfully raised $400M, achieving a valuation of over $2 billion.

💡 Both projects have raised similar amounts of funding and share comparable valuations.

TOKENOMICS

SUI

Here’s the distribution breakdown of the total supply of 10 billion $SUI tokens.

[

Source: @SuiDailyTK

We can summarize it like this: 50% of $SUI tokens are allocated to the community, while the remaining 50% are primarily controlled by the team and investors.

But perhaps it's worth taking a closer look at the token unlock schedule. 🔎

[

Source: StormGain

Currently, 26% of tokens are in circulation. We can also see that significant unlocks began in April 2024, and the yearly inflation rate is around 40%!

✍️ Currently around 1 billion new $SUI tokens are unlocked per year, potentially leading to $800M in sell pressure. 

With the current price at $1.53, the fully diluted valuation (FDV) stands at $15.4 billion—four times higher than the last Series B funding round.

APTOS

Here’s the distribution breakdown of the genesis supply of 1 billion $APT tokens.

[

Source: CryptoBriefing

The token distribution is also quite similar. 51% of $APT tokens are allocated to the community, while the remaining 49% are mainly controlled by the team and investors.

Great, now let's have a look on the unlocks to determine how many tokens are entering the market. 

[

Source: AptosFundation

Approximately 48% of tokens are in circulation today. 

At genesis, 1 billion $APT tokens were allocated across several categories, each with different lockup periods. 

It's important to note that $APT has no fixed supply, meaning the total number of tokens can increase over time.

✍️ Currently, around 200M new $APT tokens are unlocked each year, potentially leading to $1.2 billion in sell pressure if all tokens are immediately sold. 

With the current price at $7.3, this brings the fully diluted valuation (FDV) to $8.1 billion—three times higher than the last funding round.

💡 Aptos has a significantly higher percentage of tokens in circulation at 48%, compared to SUI's 26%.

Both projects are set to unlock substantial amounts of tokens, valued at around $1 billion annually.

Currently, both Aptos and SUI are trading at four times their last valuations.

However, since earlier funding rounds were at much lower valuations, those investors could be sitting on even greater profits.

❗The tokenomics aren't exactly favorable for investors.

TECHNOLOGY

We’re not technical experts, but we want to give you a quick overview of their key tech features.

SUI

SUI is very good at processing many transactions at once, especially when those transactions involve different objects (like separate NFTs or tokens). 

Because of its object-centric model, SUI can efficiently handle a lot of activity where transactions don’t need to interact with each other. 

For example, in a game with thousands of players trading different items, SUI can manage these trades simultaneously without slowing down.

SUI shines in scenarios where you need fine control over how individual assets behave and interact. 

This makes it ideal for applications like games, digital collectibles, or any system where assets have complex rules and interactions.

APTOS

Aptos is designed to handle a massive number of transactions all at once, even when they do need to interact with each other. 

Its consensus mechanism is optimized to quickly agree on and finalize transactions, making it particularly strong in situations where you have a lot of users doing many things at the same time—like in a large-scale financial application or a social network.

Aptos ensures that the system remains fast and reliable even when the network is under heavy use, which is crucial for applications that need to maintain performance with millions of users.

💡 SUI is great for handling lots of transactions at once, especially when they don’t need to interact, making it ideal for games and collectibles.

Aptos excels at managing complex transactions that do need to interact, making it perfect for large-scale apps like financial systems or social networks.

ECOSYSTEM

Let's examine the onchain data of both SUI and Aptos to gauge their growth and adoption. 

Even with top-tier technology, the biggest challenge for L1s will be driving adoption, especially with Ethereum and Solana holding such a significant lead.

Be aware: When evaluating L1 blockchains, we typically focus on key metrics that reveal market interest and user value. 

In our report, "3 Ways to Value Tokens," one of the methods we explored was relative comparison, where we analyzed key blockchain metrics. 

For consistency, we'll continue using these metrics:

• Fees

• Stablecoins

• Active users

• DEX volumes

• Active developers

• Total Value Locked (TVL)

❗ However, it's important to recognize that much of the activity and TVL could be driven by airdrop hunters rather than real users who are genuinely attracted by the unique value of the blockchain.

So, we need to keep that in mind as we move forward. 📝

Let’s begin with active users, as these numbers are likely to be the most influenced by that activity.

[

Source: Artemis

SUI boasts an average of 600,000 daily active addresses, significantly more than Aptos' 174,000. 

When it comes to monthly active users, SUI leads with 3.54 million, just edging out Aptos' 3.3 million.

💡 SUI significantly outperforms Aptos in daily active addresses, though they’re quite similar on a monthly basis.

Next, let’s look at fees to see how much these addresses are actually paying.

[

Source: Artemis

Daily fees on SUI are around $6,000, compared to $2,000 on Aptos – the average transaction fee is $0.002 on SUI and $0.001 on Aptos. 

Both blockchains have similar TPS (around 40), but Aptos has a slightly faster block time at 0.3 seconds, compared to SUI's 0.4 seconds.

💡 The differences here are also minor. SUI’s higher fees could be due to its higher average transaction fee, which doesn’t necessarily provide the full picture.

Overall, most of the other key metrics between the two projects are quite similar.

Let's continue with Total Value Locked (TVL).

[

Source: Artemis

SUI's TVL stands at $700M, compared to Aptos' $430M. Both blockchains show similar sideways trends in TVL, remaining close to their all-time highs. 

💡 With close to 50% more in TVL, SUI gains an edge in this area.

Ok, what about stablecoins?

[

Source: DefiLlama

Stablecoins on SUI have remained relatively flat at around $380M, while Aptos has seen a solid uptrend, reaching $186M. 

💡 Although Aptos still has 55% fewer stablecoins than SUI, the momentum is clearly in Aptos' favor.

Will SUI's higher TVL and stablecoins translate into more trading volume as well? 

[

Source: Artemis

The average daily trading volume for both projects hovers around $40–$50M. However, the trends paint a different picture—SUI's volume is on the rise, while Aptos is seeing a decline.

💡 Although their volumes are comparable, SUI clearly has the momentum on its side.

Now, let's take a look at developer activity.

[

Source: Artemis

Both chains have around 200 active developers – at this point, it’s hardly surprising that both projects are showing such similar numbers across the board, no? 😂

💡 Both projects have roughly 200 active developers, making it a tie in this area.

We’ve compared these two projects against each other, but if they’re supposed to compete with Solana, you might be curious how these numbers stack up against $SOL…

We’re right there with you! But before diving into that comparison, we need to gather a bit more info on these projects.

OTHER FACTORS AND CATALYSTS

SUI

1/ zkLogins

zkLogin offers users the ability to create a SUI account with a social login, such as Google or Twitch, but without that company knowing anything about the users’ onchain activity.

2/ Sponsored transactions

Sponsored transactions on SUI, where developers cover users' transaction fees, make it easier for apps like Wave Wallet and FanTV to attract users by eliminating the need to buy tokens upfront. 

This feature simplifies the user experience and can drive greater adoption of SUI-based applications.

Now that we have a solid understanding of SUI, you might be wondering what could drive new users or activity, potentially leading to price growth.

3/ Mysticeti upgrade

Mysticeti, SUI's new consensus protocol launched in August 2024, should be a major boost for the blockchain by offering ultra-low latency of 390 milliseconds, making it one of the fastest for large-scale networks.

4/ SUI Play

It is a gaming console which could be used as a strong GTM strategy because it taps into the large gaming market, making blockchain technology accessible and engaging for mainstream users. 

By integrating NFTs and play-to-earn features, it drives blockchain adoption while creating a dedicated ecosystem of users and developers.

Preorders for the SuiPlay gaming console are now live at $599.

APTOS

1/ Aptos Connect

In July, Aptos introduced Aptos Connect, a self-custodial crypto wallet that simplifies access by allowing users to log in with familiar social accounts like Google, removing the need for complex private key management. 

If users lose access to their social account, the wallet offers easy recovery options. 

Aptos Connect ensures high security without the need for a browser extension or standalone mobile app, thanks to its use of ZK proofs in its user validation process, and works across different devices without transferring keys. 

Aptos Connect blends the ease of web2 with the security of web3, making it easier for users to manage their assets securely.

2/ Raptr 

Raptr is a new consensus protocol on Aptos which will be launched in 2 phases.

The introduction of Raptr is positioned as a game-changer for Aptos, aiming to make it the "most production-ready blockchain" by enhancing its scalability, security, and efficiency. 

This upgrade is part of Aptos' broader strategy to provide a robust platform for developers and users, promising an environment where ideas can be quickly moved from conception to production with high performance and security.

3/ Move 2

Key features of v2 include improved performance, more informative error messages to make debugging easier for developers, enhanced compatibility with existing Move code, and faster compilation with better error reporting.

All aimed at improving the overall developer experience.

💡 Both projects understand the importance of delivering a great user experience, aiming to provide a web2-like experience.

Recently, they both launched new versions of their consensus protocols, promising more scalable and efficient blockchain capabilities.

A potential distinction lies in their go-to-market strategies. SUI is focused on end users, highlighted by their push into gaming with their own console.

In contrast, Aptos is more developer-centric, emphasizing tools and infrastructure for developers.

Now that we have a clearer picture of SUI and Aptos, we can finally compare these emerging challengers with their main competitor—Solana.

KEY TAKEAWAYS

Let’s start by highlighting one of the key factors behind Solana’s success: Its strong community.

Solana has risen from the ashes thanks to its resilient community after the FTX collapse. At the time, many saw Solana as the "FTX chain" and expected it to collapse alongside FTX.

But it dodged that bullet thanks to the strength of its community. 🚀

And one of the best ways to build a strong community is by offering real upside potential. 

For example: Early Solana investors could buy in at a sub $100 million market cap for around $1 per token. 

Today, Solana trades at $148 with a market cap of $69 billion – that’s something we’re unlikely to see again.

But you don’t need a 135x increase to build a robust community. 

Even those who joined later and saw gains in the tens of times have experienced life-changing returns. These are the people who made Solana’s incredible comeback a reality. 💪

Now, let’s turn our focus back to SUI and Aptos… 

Both projects have launched with market caps over $1 billion, entering a fiercely competitive and saturated market. 

It’s important to consider the current Fully Diluted Valuation (FDV) and recognize that the risk-reward potential that Solana once offered isn’t the same here.

Let’s take a look at the table below, to glean a more detailed insight.

[

Source: TokenTerminal

PS: We don’t need to dive into all the numbers__—instead, let's highlight some key takeaways from this comparison table.

In terms of fully diluted valuation (FDV), $SUI is valued 5.6 times lower than Solana, while $APT is valued 10.6 times lower. 

So, while we’re unlikely to see a Solana-like 130x upside with SUI or Aptos, using Solana’s FDV as a benchmark, there’s still the potential for an 8x or 11x return.

When examining key onchain metrics like active addresses, TVL, stablecoins, and volumes, we see multiples of 10x-20x compared to Solana. 

This suggests that the current valuations for SUI and Aptos could be fairly accurate.

However, aside from some positive trends in stablecoins and volumes on Aptos, and a potential upside in TVL on SUI, we don't see many signs that these blockchains are attracting significantly more users at this point.

And what about their token performances? Let’s quickly review how these projects have stacked up against Solana in the past.

[

Source: TradingView

Both tokens are in a strong downtrend against $SOL, but $SUI has shown some resilience in the last two months, bouncing off all-time lows and reaching new highs recently. 

The key question remains: Can $SUI or $APT replicate Solana's remarkable performance?

They certainly can. Sometimes, all it takes is one breakthrough or the right narrative for the price to skyrocket.

But Solana was the first to deliver a fast and cheap blockchain, which now boasts a substantial ecosystem and community.

For others to compete with Solana, it’s going to be tough. What can they offer that Solana can’t?

• A better and more secure programming language.

• Greater incentives for builders and users.

• Better tech? Perhaps, but that remains to be seen.

Meanwhile, they’ll have to contend with huge token unlocks, a small ecosystem, and almost non-existent network effects, making the battle even more challenging.

TL;DR: SUI and Aptos are both promising projects with strong teams and significant funding. 

They have the skills and resources to challenge Solana and potentially Layer 2 solutions on Ethereum. 

However, they still need to establish clear distinctions that would allow them to target specific markets or better serve particular groups of users.

It could be gaming for SUI, leveraging their console, or DePIN/payments for Aptos, taking advantage of their robust, highly scalable design. 

However, until we see these developments take shape, we'll keep both projects relegated to our watchlist.

What are your thoughts? Do you think SUI or Aptos will replicate Solana’s performance? 

Share your opinions on our Discord!

Ok, that’s it for today. Take care, and good luck!

FRESH AMA COMING UP 👀 

We’re excited to host another PRO-only AMA to tackle your burning crypto questions! 🔥

Wen? September 25th (Wednesday this week).

Where? In the Milk Road PRO Discord (meetup channel).

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