Developed by former members of Facebook’s blockchain team (now Meta), the Sui Network token has experienced significant growth today as it targets the broader cryptocurrency market trying to recover from the recent downturn.
Sui (SUI)Sui (SUI) led the day’s positive movement with a notable 7.9% surge, driven by attractive offers to strengthen token economics and a selling squeeze targeting long positions in the futures market.
While most tokens have remained in the red over the past week, a handful of digital assets have achieved modest gains in the range of 1-5% since Monday.
Over the past 24 hours, the overall market capitalization of cryptocurrencies has increased by 1%, reaching approximately $10 billion.
Bitcoin (BTC) recently recorded a slight increase of 0.4% at its trading price of $26,140, while Ethereum (ETH) is currently down a slight 0.3% at $1,750.
Proposal to improve token economics
On June 10, Sui’s core contributors introduced the Sui Improvement Proposal (SIP), which aims to enable liquid staking of SUI tokens.
📣Coming Soon: Enable floating staking in Sui.
Developers can build liquid staking through SIP 6 protocol update: https://t.co/cY4pWZxMDq pic.twitter.com/0gBbhxiTPP
— Sui (@SuiNetwork) June 10, 2023
Currently, SUI validators are rewarded 5.43% per year in SUI tokens for protecting the network. By implementing floating staking, investors can actively trade using floating staked tokens while earning these rewards.
Short term pressure in the futures market
Another factor driving the SUI price rise is the short selling squeeze occurring in the futures market.
According to Coinglass data, the funding rate for SUI perpetual contracts fell significantly on June 11, indicating that traders have initiated aggressive short positions.
The funding rate represents the periodic payment exchanged between long-term and short-term traders in the perpetual contract market, and is based on market demand for that contract.
In the case of SUI, most traders took short positions and speculated on a decline in price. This created an opportunity for more sophisticated traders to push the price higher and trigger stop losses for the majority.
Over the past two days, approximately $2.5 million worth of long-term orders for SUI tokens have been liquidated, according to Coinglass data.