Sui Chief Economist Discusses Blockchain Economic Model Design

Recently, Alonso de Gortari, the chief economist of Mysten Labs, shared his insights on the design of blockchain economic models, discussing how to achieve incentive balance among various parties in the network and the evolution of the Sui network economy.

de Gortari was initially an international trade researcher, focusing on global value chains. He believes that blockchain technology is highly relevant to supply chain management, as it can transparently track the product manufacturing process. This has prompted him to apply his economics background to the Web3 domain.

When designing the economic model of Sui, the key is to balance the interests of three types of participants: validating nodes, token holders, and users. Validating nodes want to receive higher gas fees, users want lower fees, and token holders are in the middle. Finding the appropriate level of gas fees is crucial.

The tokenomics of Sui has several innovations. First, its unique horizontal scalability allows for an increase in block space during peak demand, keeping gas fees stable. Second, the reference gas price mechanism brings transparency and predictability to the market. In addition, the storage fund requires users to prepay storage fees, addressing the negative externality issue.

Regarding inflation and deflation, de Gortari pointed out that it depends on the comparison between the growth of network activity and the speed of token unlocking. Sui has set a limited token supply cap, with a total long-term amount of 10 billion coins, and this transparency helps all parties understand the economic situation of the network.

Looking ahead, the token economy of Sui will be adjusted with the usage and development of the network. Recent issues encountered in storage may require slight adjustments to the design of the storage fund. The overall goal remains to guide the incentives of all participants towards the prosperous development of the network.