Sui launches gas-free stablecoin transfers as on-chain activity hits 18-month low

Sui Network is eliminating gas fees on stablecoin transfers in a bid to reverse a 70% collapse in stablecoin supply and revive developer activity on the once-promising layer-1 blockchain.

Sui Network on Thursday launched gas-free stablecoin transfers, allowing users to move USDC, USDT and other stable-value assets on the blockchain without paying transaction fees, the Sui team announced.

"The fee waiver removes one of the biggest friction points for stablecoin users, particularly in remittance and payment use cases where gas costs can eat into small transaction margins," a Sui Foundation spokesperson said.

The move comes as on-chain activity on Sui has deteriorated sharply. Stablecoin supply on the network has fallen 70% from a peak of $1.6 billion in May 2025 to $492 million, according to DefiLlama. App fees dropped to $1.4 million in June, the lowest since July 2024 and down 53% from the prior month. DEX volumes totaled $2.2 billion in June, a 92% decline from the October all-time high and 26% lower month-over-month.

The gas-free feature targets the core of Sui's adoption problem. Stablecoins account for the majority of transaction volume on most blockchains, and removing gas costs could drive a step-change in usage. Whether it arrives in time to reverse the exodus of capital and developers — and to support SUI's price, which has lost 46% this year — will determine if the network can reclaim its position among top-tier L1s.

Stablecoin Supply Collapse Reflects Broader Exodus

The decline in stablecoin balances on Sui mirrors a broader rotation of capital out of the ecosystem. Developers have shifted focus toward artificial intelligence and other emerging sectors, while a six-hour network outage in May further damaged credibility, according to multiple on-chain data providers.

Sui's total value locked across DeFi protocols has followed a similar trajectory, though the network still ranks among the top 15 L1s by TVL, per DefiLlama. The gas-free stablecoin initiative is the most aggressive attempt yet to reverse these trends, effectively subsidizing the most common transaction type on the network.

SUI Price Faces Test at $0.57 Support

SUI traded at $0.85 as of 14:30 UTC Thursday, down 46% year-to-date. The token has formed a descending price channel on the daily chart, with the next major support level at $0.57, according to TradingView data. A break below that level would represent an additional 33% decline from current prices.

The last two tests of the $0.57 zone — including during the October 2025 flash crash — produced sharp bounces. Whether that demand still exists given the current market environment remains unclear, analysts said.

The broader macro backdrop has also weighed on risk assets. Analysts now expect a Federal Reserve rate hike in September as inflation continues to exceed the central bank's 2% target, while geopolitical tensions and tariff disputes have pushed investors out of the riskiest corners of crypto.

This article is for informational purposes only and does not constitute investment advice.