Felix Pinkston
Jul 18, 2024 05:32
DeepBook’s deep liquidity, quick execution, and ease of integration give Sui DeFi protocols a competitive edge.
DeFi protocols are increasingly highlighting the advantages of using DeepBook, an open-source central limit order book (CLOB) that offers deep liquidity, quick execution, and ease of integration. According to The Sui Blog, protocols such as Kriya, FlowX, and Hop Aggregator have integrated DeepBook to enhance their trading platforms.
DeepBook’s Technical Benefits
After a year in operation, DeepBook has significantly benefited Sui DeFi protocols by offering deep liquidity, faster execution, and reduced slippage. Its open-source smart contracts allow for seamless integration, ensuring transparency and flexibility. DeepBook supports both market and limit orders, providing traders with a range of options.
Aditya Dwivedi, co-founder of Kriya, noted, “We were the first to provide limit orders natively in our web app via DeepBook. It integrated seamlessly as a liquidity source in our swap router, further reducing slippage for traders.”
Sui Network Advantages
DeepBook leverages the Sui network’s fast transaction processing and scalability. Sui’s consensus engine allows single-owner transactions to bypass traditional consensus, enhancing performance. This architecture supports scaling, enabling network infrastructure supporters to add resources as traffic increases.
DeFi activities using DeepBook achieve settlement in about 500 milliseconds with sub-second finality, maintaining consistent and lower gas fees compared to other blockchains. The upcoming Mysticeti upgrade to Sui’s consensus engine is expected to further enhance DeepBook’s performance.
User Experience and Cost Efficiency
Neville Nguyen, CEO of FlowX Finance, stated, “On FlowX, we’ve seen how well DeepBook performs in trades involving primary pairs like SUI-USDC and USDC-USDT. In most cases, our aggregator routes some swap volume through DeepBook.”
DeepBook’s ability to parallelize trading pairs increases transaction speed and settlement times, directly benefiting user experience. Additionally, its low gas fees and efficient trading rates save DeFi users money.
Bonkman, Founder of Hop Aggregator, highlighted, “Our goal at Hop is to provide customers with the best rates for all Sui assets. Leveraging DeepBook supports this goal because it often has the best rates, especially during times of market volatility.”
Future Developments
DeepBook’s sophisticated architecture allows for various trading activities, including limit orders and perpetual derivatives (perps). This flexibility makes it popular among protocols exploring new offerings. Kriya Perps, for example, combines private DeepBook pools with a proprietary margin engine to offer users centralized exchange-like latency and decentralized exchange-like transparency.
Protocols interested in using DeepBook can refer to its documentation. As an open-source liquidity layer, it is permissionless, allowing for community-driven updates and improvements through the Sui Improvement Proposals (SIPs) program.
DeepBook’s audited contracts provide a security advantage for protocols, reducing the burden of implementing robust security measures. This foundational liquidity layer supports DeFi protocols by offering a publicly accessible trading pool and enabling sophisticated trading strategies.
Looking ahead, DeepBook plans to launch its own token, DEEP, to involve both institutional and retail traders in governance. With ongoing development and new features, DeepBook aims to maintain its position at the forefront of liquidity solutions in the DeFi space.
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