Does the world need another blockchain? Evan Cheng, 52, CEO of Mysten Labs and founder of a new blockchain named Sui says yes.
Bitcoin is down 58% from its 2021 peak and the two most prominent crypto exchanges are under attack from the SEC, but Cheng has attracted a fresh $300 million in capital from an impressive lineup of backers including Andreesen Horowitz, Samsung, Franklin Tempeton and Shark Tank investor Kevin O’Leary. Mysten Lab’s August 2022 Series B funding valued the start-up at $2 billion and on May 3 Cheng’s new blockchain went live. The fully diluted value of the token backing it is now $7 billion.
Sui is the latest in a parade of Ethereum challengers including Solana, Cardano and Algorand, only it claims to have a killer app in the form of its programming language called Move. With Move, Sui developers, many of whom are refugees from Facebook’s failed crypto endeavor, have made creating decentralized applications faster, cheaper and safer. For example, using Sui you can sell an NFT in a half of a second, while on Ethereum it takes an average of 12 seconds to post a transaction. For power blockchain users that 12-second delay is an eternity. In testing environments, Sui has processed 297,000 transactions per second though it is only posting 356 per second currently. For comparison Ethereum posts 15 transactions per second.
“Ethereum is completely wrong.” argues Cheng “It’s considered a standard, but there are too many things broken about it.”
In fact, Cheng believes that the current wave of crypto companies investing more capital and resources in Ethereum is a big mistake. “Everybody seems to say, “Oh well, let’s just keep building on top [of Ethereum], because this is where the users are,” says Cheng. “But I see a path to nowhere. I don’t see technology being useful for anything at scale.”
Cheng believes the core feature of Mysten’s Move–namely the ability to update assets, including business contracts or say collectibles on a blockchain in real time– will be a game changer.
“If you have a baseball and get it signed by your favorite player, its characteristics have changed,” says Cheng. “Current blockchains cannot update assets like this in real time, they have to find hacks around it. It makes no sense.”
Initially Cheng is targeting the video gaming community because immutable real-time blockchain-based updating could be particularly valuable to players, who already devote thousands of dollars and hours to customizing and enhancing the capabilities of their avatars in games such as Fortnite and League of Legends. Gamers more than any other group understand the value of digital assets. But they also have little patience for the high fees and the heavy network congestion that has slowed down blockchains such as Ethereum in the past.
Evan Cheng has always believed in doing things his own way, and on his own schedule. He grew up in the southern Taiwanese city of Kaohsiung, where he started computer coding around the age of 10. “I was a lone wolf kind of engineer, literally the type of person you see in movies who lives by himself in a single room and doesn’t work well with others.”
In order to avoid compulsory military service Cheng left the island before turning 16 with his father who moved to South Africa to run a textile business. Cheng wanted to go to school in the United States so he applied to and enrolled at Marietta College in Ohio, a small liberal arts school, which admitted him without a high school diploma . “I completed two majors and a minor with a 4.0 GPA, it was very boring for me,” says Cheng, who graduated in 1992.
After toiling at a few software engineering jobs, Cheng joined Apple in 2005 where he met noted computer scientist Chris Lattner, who told Cheng he was working on a research project that would transform computer programming known as LLVM (Low Level Virtual Machine) and make it easier for developers to translate computer code into instructions that phones and computers could execute. “I went in to the vice president the next day and told them to move me out of my current team, that was polishing a turd.” Today LLVM has become an industry standard among Apple and Android devices.
Cheng started getting interested in crypto in 2017, but first primarily as a payments service. One of his first observations was that the programming language developed by Ethereum founder Vitalik Buterin for the blockchain, called Solidity, was “about as broken as can be”.
By that time he had moved over to Facebook as its director of engineering for programming languages and runtimes, and was leading some crypto internal enthusiast groups at the company. He ultimately caught the eye of one of Libra’s co-founders Morgan Beller, now general partner at venture capital firm NFX, who would make him the platform’s head of research and development. “Evan was a great partner in crime for me as he and I often tried to push for a more open and crypto-leaning strategy at Libra,” says Morgan. With his background in programming languages he pushed to develop a new language called Move designed to make blockchain programming more efficient. One of Morgan and Cheng’s big successes was open-sourcing Move so that it could be free to use by anyone.
Cheng has trained his new Move-based blockchain Sui on video gaming, which happens to be a huge market, estimated to produce $200 billion annually in revenues. Cheng’s isn’t the first blockchain company to target gaming. Early games such as Axie Infinity alienated gamers with inferior graphics and a focus on the “financialization” of gaming rather than gameplay itself. “It was always about these decentralized organizations, intricate tokens, people being able to make money,” says Clay Griffin, research analyst at MoffettNathanson. “It missed the mark.”
Cheng vows not to make the same mistakes and is intent on bringing high-quality games onto Sui. His team has already signed up 30 development studios and brought 47 games to Sui. One such game, The Walking Dead: Lands Survivor Series will shortly launch on Sui and was developed by Orange Comet labs in conjunction with AMC studios. By using Sui gamers playing Walking Dead can easily turn game items into NFTS, that are then freely trade-able and a source of income for players.
Anthony Palma, Mysten’s head of gaming investment and partnerships says that the goal is for users to not even know that they are using a blockchain. In fact, the vast majority of games themselves will continue to run on the cloud-based servers of the video game developer and only the in-game items will be connected to Sui’s blockchain when they are changed or updated. Palma’s team has been busy. According to research firm Dapp Radar, Sui onboarded more new blockchain games than any other network over the last quarter.
Will Mysten finally bring video gaming to blockchain and help Sui beat back the growing center of gravity around Ethereum? Momentum is not on Sui’s side and most experienced tech investors know that the best technology doesn’t always prevail, especially when rivals are entrenched.
Shark Tank’s Mr. Wonderful, Kevin O’Leary, who was part of Sui’s August 2022 funding round, is betting on the underdog, “Cheng’s making very interesting claims about what he can solve for. If half of it is true, he is the picks and shovels you want.”