The Sui Network (SUI) is preparing to unlock nearly $300 million worth of its native token on January 1, 2025. This unlock is part of Sui’s tokenomics and monthly unlock schedule, which increases SUI’s circulating supply and dilutes investors’ holdings. Finbold has been monitoring and reporting on Sui cliff unlocks based on data from Tokenomist. In December, SUI saw its largest unlock in U.S. dollar value to date, unlocking $224 million worth of 64.19 million tokens.
If SUI continues to trade at its current level, the usual 64.19 million SUI unlock will have a nominal value of $274.11 million on the first day of 2025. This will artificially increase Sui’s circulating supply and market capitalization by 2.19% after the token unlock. Interestingly, there are still 1.85 billion SUI tokens locked in vested contracts with scheduled unlocks, while over 5.22 billion locked SUI tokens are classified as “TBD locked” by Tokenomist.
In the next seven days, $581.95 million worth of tokens will be unlocked by 43 cryptocurrency projects. SUI represents the largest share, unlocking approximately 50% of all cliff unlocks for the upcoming week. Other projects with significant unlocks include Optimism (OP) and ImmutableX (IMX), with $60.80 million and $36.04 million, respectively. SUI Series A and B investors receive the most tokens, with Mysten Labs also receiving a significant portion for various purposes.
The Sui Network has already unlocked 29% of its maximum capped supply of 10 billion SUI, with a fully diluted value of $42.70 billion at $4.27 per token. Each time the network unlocks more tokens, it increases the potential selling pressure and artificially inflates the market cap. This requires an increased demand to sustain prices, leading to potential threats for SUI investors as their holdings’ value may be diluted.
Sui has a unique tokenomics structure that allows Mysten Labs and Series A/B investors to stake their locked tokens, generating asymmetric liquid rewards against other staking investors. This gives these entities the opportunity to sell these rewards or compound their staking positions over time. As the SUI token unlocks more tokens, it will be important for investors to monitor the market effects and be prepared for potential price fluctuations in response to the increased circulating supply and market capitalization.
