Recently, @MMTFinance's rapid rise on the Sui chain is truly impressive, with TVL surpassing $55 million in just one month, making it the fastest-growing project in Sui chain history. In the current DEX landscape, where homogeneity is severe and user stickiness is insufficient, how can Momentum break through quickly? The answer lies in its adoption of the ve(3,3) mechanism. Next, let me share my thoughts:
—— The DEX track urgently needs a new breakthrough point, and ve(3,3) comes at the right time.
In my view, the current DEX market faces two major dilemmas: 1) The incentives of the traditional AMM model are unsustainable, with most projects falling into a "mine, withdraw, sell" death spiral; 2) Liquidity fragmentation is severe, user loyalty is low, and there is a lack of long-term value capture mechanisms.
The emergence of the ve(3,3) mechanism provides solutions to these dilemmas. Simply put, it combines Curve's Vote Escrow locking mechanism with the (3,3) game theory of Olympus DAO, allowing users to lock tokens to gain voting rights, guiding protocol resource allocation through voting. Project teams can "bribe" to attract votes, with all transaction fees distributed to voters.
The brilliance of this mechanism lies in its construction of a self-reinforcing Flywheel: increased staking ratio → reduced selling pressure on tokens → price increase → improved market-making APR → attracting more liquidity → increased trading volume → increased fee rebates, forming a positive cycle. To some extent, this is the "holy grail" mechanism for the sustainable development of DeFi protocols.
—— Sui's technical foundation: The natural advantages of Move-based public chains.
Momentum's choice of Sui is not accidental. The ve(3,3) mechanism involves complex interactions of voting, "bribing", reward distribution, etc., which require extremely high underlying performance and security.
1) In terms of performance, Sui achieves 297,000 TPS through parallel transaction processing, supporting the high-frequency complex interactions of ve(3,3);
2) In terms of security, the resource ownership model and object-centric design of the Move language make dynamic weight management and complex state changes more secure and reliable;
3) In terms of user experience, Sui's sub-second confirmation ensures the timely execution of voting and reward distribution, which is crucial for the timeliness of the "bribing" mechanism.
In layman's terms, if we compare ve(3,3) to a precision flywheel machine, Sui is the high-performance engine tailor-made for this machine.
—— Strong backing: The dual buff of the Qatari royal family and foundation.
The cold start of the ve(3,3) mechanism is a classic chicken-and-egg problem that requires strong initial resource support. Momentum's investment lineup is luxurious: @Coinbase Ventures, @SuiNetwork Foundation, @jump_Crypto, and Varys Capital, backed by the Qatari royal family, as the leading investor.
More critically, founder @ChefMMT_X was involved in Meta's Diem project, which is the predecessor of Sui. This technical heritage has enabled Momentum to gain dual support from the Sui Foundation and Mysten Labs, not only in terms of funding but also in comprehensive ecological resource tilt.
In fact, successful ve(3,3) projects (like Aerodrome on the Base chain) cannot do without foundation support. The strong backing provides key assistance for Momentum to quickly accumulate TVL and activate the flywheel.
—— Ecological positioning: Not just a DEX, but also a resource distribution center for Sui.
From the performance of breaking into the top ten of Sui chain TVL in just one month, Momentum clearly has ambitions to become the DEX infrastructure of the Sui ecosystem. The ve(3,3) mechanism makes it not just a trading platform but more like an ecological traffic distribution center.
Through the "bribing" mechanism, new projects in the Sui ecosystem can obtain liquidity support through Momentum, which gives Momentum the potential to replicate Curve's success in the Ethereum ecosystem, becoming an important component of Sui's DeFi Lego.
Undoubtedly, in the competition of high-performance L1s, the chain that establishes a strong DeFi infrastructure first is more likely to gain ecological dividends, and Momentum is an important weapon for Sui in this competition.
That's all.
However, there are also significant challenges that need to be addressed. The recent @CetusProtocol hacking incident is a typical example; although MMT itself is secure, the overall risk aversion sentiment in the Sui ecosystem has led to a noticeable drop in TVL. It currently appears to be a code-level issue with Cetus, not involving the underlying security of Sui, but the transmission effect of ecological risk cannot be ignored.
To some extent, this also confirms the risks we mentioned earlier: firstly, the controversy over centralization at the Sui ecosystem level requires the market to digest for a while; secondly, the sustainability of the ve(3,3) mechanism itself still needs to be verified. Historically, many similar projects faced the risk of flywheel reversal after an initial FOMO, and once TVL growth slows down, the positive cycle may turn into a negative spiral.
However, crises often present opportunities. The dissipating risk aversion sentiment after the Cetus incident may bring a window of liquidity rebound for safe projects like Momentum. Finally, the upcoming July TGE will be a key test, as token distribution and long-term incentive mechanism design will directly impact the project's sustainable development.
Overall, Momentum's rapid rise through the ve(3,3) mechanism on Sui represents an important attempt at DeFi innovation for Move-based public chains. This is both a test that Sui must face and a crucial examination of whether the old DeFi model of ve(3,3) can regain vitality on new soil.
