Mysten Labs Chief Economist Alonso de Gortari Talks About Sui Network Economy

Recently, a renowned economist shared his insights on blockchain economics, particularly regarding the economic model design of a well-known network. Here are the main points of the conversation:

From International Trade to Blockchain

This economist initially focused on international trade and global value chain research. He found that blockchain technology is closely related to supply chain management and can transparently track the product manufacturing process. The potential of this technology prompted him to shift from theoretical research to practical applications.

Design Network Economic Model

When designing a blockchain economy, the key is to balance the interests of three types of participants: network operators, token holders, and users. Operators want to earn revenue through gas fees, users want low costs, and token holders are in the middle. He emphasized that finding the right balance is at the core of the design.

Innovative Gas Price Mechanism

The network employs a unique gas pricing design. By utilizing horizontal scalability, it increases block space during peak demand, maintaining low gas fees. The reference gas pricing mechanism provides transparency and predictability, while market competition ensures the reasonableness of prices.

Storage Fund Solutions

To address the long-term cost issues of blockchain storage, the network has introduced a storage fund. Users pay a fee for permanent storage in advance, which is used to compensate the storage costs of validating nodes. This design ensures the long-term sustainability of the network.

Inflation and Deflation

Economists point out that the inflationary or deflationary state of the network depends on the comparison between the growth rate of on-chain activities and the growth of token supply. The network has set a capped token supply, with a long-term total reaching 1 billion tokens. This transparent and predictable design provides certainty to the market.

Future Development

Although the mainnet is still in its early stages, the token economy of the network will continuously adapt with usage and development. For example, recently emerging storage issues may require adjustments to the storage fund. Economists emphasize that the process of testing theories in practice is very interesting, while the network's goal is always to coordinate the interests of all parties and promote prosperous development.