Sui (SUI)

Only through a Governance vote.

Initially, the SUI is being staked to earn new issuance (“inflationary”) subsidies. This means that the SUI supply will increase by approximately 1,111,111 SUI tokens per epoch (24 hours) and stakers will capture the newly issued SUI through rewards. It is estimated that stakers will earn around 6% annually. However, the subsidies will decrease every 90 days by 10%. So it would reduce from 6% to 5.40%, then 4.86%, reducing continuously each 90 days. Although the inflationary subsidies will reduce over time, the total Staking rewards rate also consists of rewards derived from network activity / gas fees. Due to low network activity upon launch, Stake subsidies will help make up for rewards until the activity picks up and eventually the rewards will largely be derived from gas fees rather than subsidies.

Stakers will also capture fees from network transactions, so as Sui transaction volume increases, SUI stakers will earn more than just new issuance subsidies.

The SUI token also gives stakers the right to vote on policy decisions for how the Sui network will operate and distribute treasury funds. Owning staked SUI is ownership of the Sui network, entitling SUI stakers to set/change the rules of the Sui network.

Currently, stakers can unbond their tokens right away. Eventually, there will be a unbonding period during which the tokens will be locked to the protocol. The unbonding period is subject to change through governance.

While your tokens are staked, you remain in control of your tokens. Third party custody providers such as Anchorage, Bitgo, and Ledger Enterprise offer services for storing your private keys for SUI. 

Currently, the parameters for how SUI could be slashed are not fully defined, however some slashing properties have been shared.

At the time of this article, Tally Rule Slashing applies, but there are no predefined slashing parameters:

Tally Rule Slashing: a validator who gets given a 0 score by 2/3 of its peers will see rewards slashed by a to-be-determined number. Parameters that will inform this will be low network performance, malicious behavior, and poor community membership.

Staking rewards on Sui Network are automatically distributed every 24 hours and Figment is never in control of your rewards. The rewards are both staked and compounded automatically, which means you will need to unstake to withdraw.

Your potential rewards depend upon validator performance. When your validator is down, you will not be earning staking rewards, and if your validator acts maliciously, you may be slashed a portion of your staked SUI tokens.

An additional way that a staker might miss out on rewards is by quoting an incorrect gas price that is enough outside of the norm to lead to an unoptimized Gas Reference Price for the network. This would mean that the reference price quoted by an individual validator could lead to suboptimal fee accrual from transactions on the network and resulting suboptimal transaction fee accrual for a validator. We do not cover a suboptimal rewards rate for the network on the basis of an out-of-norm RGP, but do have an optimization strategy that should lead to optimal rewards.

Sui uses token voting for on-chain governance, the details of which are not clear at this time.

If you have any outstanding questions, please feel free to reach out to our team at sales@figment.io.

The information herein is being provided to you for general informational purposes only. It is not intended to be, nor should it be relied upon as, legal, business, or investment advice. Figment undertakes no obligation to update the information herein. Figment and its officers and directors expressly disclaim any liability of any nature associated with the information herein. Please consult your own advisers and lawyers for their advice on the matters covered herein.