As the cryptocurrency market tries to recover from the recent downturn, SUI, the token behind Sui Network, is enjoying a double-digit gain. This surge of 7.9% comes after last week’s heavy action against the world’s largest exchanges Binance and Coinbase by the United States Securities and Exchange Commission (SEC). The SEC’s move primarily targeted tokens it deemed securities, resulting in a shaken market.
Sui, a layer-1 blockchain platform developed by former members of Facebook’s (now Meta) blockchain team, features SUI as the native token for gas payments and validation on the network. As most tokens continue to struggle, some digital assets have seen minor gains of one to five percent in the last day.
The total crypto market capitalization has increased by approximately $10 billion (1%) within the past 24 hours. Bitcoin (BTC) is up by a meager 0.4%, and Ethereum (ETH) decreased by 0.3%.
A significant factor contributing to Sui’s rise is a recent tokenomics improvement proposal. On June 10, Sui core contributors introduced a Sui Improvement Proposal (SIP) allowing for liquid staking of SUI tokens if passed. Liquid staking enables users to lock their tokens in a proof-of-stake (PoS) blockchain and earn validator rewards while preserving the token’s liquidity. This liquidity is achieved through a representation of the staked amount in the form of a liquid token.
Currently, SUI validators receive a 5.43% annual return in SUI rewards for securing the network. Liquid staking could allow investors to earn this reward while actively trading using their liquid-staked tokens. This added flexibility may encourage more users to stake their holdings.
Another factor for SUI’s price surge is a short squeeze in the futures market. Coinglass data reveals that the funding rate for SUI perpetual contracts significantly dropped on June 11, indicating that traders opened aggressive short positions. This resulted in a prime opportunity for savvy traders to drive the price up and target the stop losses of the majority. In the past two days, $2.5 million worth of SUI long orders were liquidated as the contract’s funding rate stabilized near neutral values.
While this article provides an overview of the current market situation, it is crucial to understand that it serves solely informative purposes and does not constitute financial, investment, or other advice. Please exercise caution and conduct thorough research before making any investment decisions related to cryptocurrencies.
Source: Decrypt
