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$SUI had a two-hour network outage, where block production stalled. The chain is back to normal, but raises the issue of its resilience and scalability.
$SUI had a nearly two-hour network outage on November 21, raising questions of its scalability potential. Later, the network once again had a gap where no new block was discovered for over 29 minutes. The outages happened at a time when the $SUI network tried to process a record number of transactions per second.
In both cases, block production resumed at its usual high speed with one-second finality. The $SUI team stated the reason for the delay was a bug that caused validators to crash. Lack of consensus on $SUI can stall block production and propagation.
The Sui network is back up and processing transactions again, thanks to swift work from the incredible community of Sui validators.
The 2-hour downtime was caused by a bug in transaction scheduling logic that caused validators to crash, which has now been resolved. https://t.co/TJh2zwvQcD
— Sui (@SuiNetwork) November 21, 2024
The bug on $SUI concerned transaction scheduling, which made validators unable to handle the traffic and finality. Delegators are a crucial role on $SUI, both for network finality, and for producing passive returns through staking.
$SUI has a total of 108 validators, a fraction of Solana’s over 1,000 special entities. $SUI aims for success similar to Solana, but has already faced some of its first stress test. The recent outages had a fast recovery, but invited comparison to previous periods of Solana inactivity due to flawed validator consensus.
$SUI reaches price record on peak open interest
The outage happens at a time when $SUI rallied into the top 15 of coins and tokens, trading near its all-time high of $3.70. Later, $SUI slid toward $3.50 after the market rally slowed down. $SUI trades on a three-year peak of open interest above $655M. The token may face a further correction in case long positions are attacked, or the entire crypto market starts a drawdown.
$SUI tokens may face price pressures in the long run, as only 34.35% of the tokens are unlocked. The token has a slow unlocking schedule, but a significant share allocated to Series A, Series B and Early Contributor backers .
The $SUI L1 network was one of the best-financed chains, raising $385B in a series of VC rounds and token sales. $SUI used the market peak in 2022 to raise $300M in a single series B round, with backers including Binance Labs, Coinbase Ventures, and Andreessen Horowitz.
Despite the VC backing, $SUI had a unique start, launching its trading from the end of May. $SUI has not seen the usual drawdowns of VC-backed projects, but managed to enter the market during a bull market with favorable conditions. $SUI has a long way to go until all tokens are unlocked, with the horizon stretching into 2030.
Record traffic preceded the $SUI network outage
The increased traffic and interest caused a stress test for the project. $SUI also reached peak trading volumes on Binance, potentially leading to increased transaction count. $SUI also had a recent peak in token turnover as the L1 token reawakened along with other assets.
$SUI total value locked also increased, expanding almost constantly since the August 6 market correction. The chain now carries more than $1.64B in total value locked, with the biggest contributions from Navi protocol and $SUI Lend. $SUI carries up to 15M daily transactions, with 826.24 daily active wallets.
The chain also carries significant stablecoin liquidity, and is connected to the Ethereum ecosystem. $SUI received $864M in stablecoins and a small percentage of ERC-20 bridged tokens. The total inflows from Ethereum are $839.21M, among the top L1 chains to receive liquidity. $SUI also benefits from its high-profile token with a prominent community. Despite the slowdown in the L1 token narrative, $SUI remains an outlier.
On the day of the outage, the chain also had a vertical increase in the total transactions per second. The count went from under 500 TPS to 9.66K transactions per second, before validators could no longer arrange and coordinate blocks.
Previously, $SUI reached an all-time high of 8.45K TPS on October 14, then falling again to its baseline. The chain has previously performed ‘Break $SUI’ events to test the maximum possible transactions per second.
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