Key Takeaways
- Native Sui Order Book: DeepBook is a decentralized CLOB protocol native to the Sui blockchain, providing shared liquidity across the network.
- Unified Liquidity & Performance: Embedded in Sui’s infrastructure, DeepBook consolidates liquidity and offers high throughput with sub-second settlement, reducing DeFi performance issues.
- Ecosystem Integration: Supported by the Sui Foundation, DeepBook is integrated into Sui’s core infrastructure, with contributions from Mysten Labs and MovEX.
- Key Features: DeepBook offers composability for dApps, efficient execution with limit/market orders, and transparent on-chain matching. It enables easy integration for developers and provides minimal slippage for traders.
- Token & Incentives: The DEEP token is used for fees, staking rewards, and governance. A TGE occurred in late 2024, with a fixed supply of 10 billion DEEP tokens.
Introduction
Decentralized finance on Sui is evolving, with DeepBook at its core. As Sui’s first native liquidity engine, DeepBook provides a single central limit order book, centralizing liquidity and reducing slippage across Sui-based apps.
This post explores DeepBook’s role as foundational infrastructure on Sui, its support and backing, and its key features, composability for developers, efficiency for traders, and transparency. We’ll also look at the DEEP token, designed to drive liquidity growth. By the end, you’ll understand DeepBook’s vision and how to get started.
What is DeepBook and Why Does Sui Need It?
DeepBook is a decentralized exchange engine built into the Sui blockchain, functioning as a fully on-chain central limit order book (CLOB). Unlike automated market makers (AMMs), DeepBook matches buy and sell orders with price-time priority on-chain, providing several benefits to the Sui ecosystem:
- Foundational Liquidity: DeepBook is integrated directly into Sui's protocol, ensuring all trading activity on the network can access a shared order book, avoiding fragmented liquidity across DEXs.
- Solving Fragmented Liquidity: By using one central order book, DeepBook minimizes slippage, improves price discovery, and offers tighter bid-ask spreads, benefiting users across wallets, aggregators, and DEXs.
- High Performance: Built on Sui's high-speed, low-latency Layer-1, DeepBook offers centralized exchange-like performance with transactions settling in 300–400 milliseconds, enabling high-frequency trading and low-cost transactions.
- Transparency and Security: DeepBook operates fully on-chain, ensuring transparency and fairness with public order books and secure smart contracts. Users retain control of their assets in wallets, unlike centralized exchanges.
- Technical Architecture: DeepBook uses Sui’s object-centric model to process orders in parallel, providing high throughput without bottlenecks. It exposes Move modules for developers to integrate with user-facing platforms.
- Team and Origin: Developed by the Sui Foundation, Mysten Labs, and the MovEX team, DeepBook launched alongside Sui’s mainnet in 2023. It remains open-source and community-governed through Sui’s SIP process.
In essence, DeepBook is crucial to ensuring efficient and scalable DeFi on Sui by providing a unified, high-performance trading engine accessible to all Sui-based applications.
Ecosystem Support, Funding, and Partnerships
DeepBook, a decentralized liquidity protocol on Sui, has strong backing from key players in the Sui ecosystem. Incubated by the Sui Foundation and Mysten Labs, it also benefits from partnerships with other ecosystem contributors. Early backers and liquidity partners hold a significant portion of DEEP tokens, providing further support and ensuring deep order books on the platform. In summary, DeepBook benefits from a robust ecosystem of support from the Sui Foundation, investors, and the community, positioning it to grow alongside Sui’s expanding DeFi ecosystem.
Key Features and Benefits of DeepBook
DeepBook is a next-generation decentralized central limit order book (CLOB) built on the Sui blockchain, designed to deliver high-performance, low-latency trading on-chain. Leveraging Sui’s parallel execution and low transaction fees, DeepBook introduces advanced features, including flash loans, governance, and an enhanced matching engine.
Key Features
- Scalability: DeepBook handles high-performance, low-latency trading on the Sui blockchain, addressing scalability issues that traditional DeFi platforms face.
- Low Fees: Leveraging Sui’s parallel execution and low transaction costs, DeepBook enables fast, cost-efficient trades, making it accessible for users and developers.
- Liquidity Consolidation: DeepBook provides a shared liquidity pool for all Sui dApps, ensuring minimal slippage and a robust trading environment for both professional traders and institutional investors.
- Governance: The DEEP token enables decentralized governance of pool parameters, giving users control over fees and staking requirements through a quasi-concave voting system.
- Flash Loans: Allows on-chain borrowing within a single transaction, ideal for arbitrage and liquidation strategies, boosting liquidity and flexibility for traders.
- Staking Incentives: Users can stake DEEP tokens to earn fee reductions and maker rebates, incentivizing liquidity provision and ensuring continuous platform growth.
Incentive Programs and User Engagement
1. Early User Airdrop via Soulbound NFTs
On March 28, 2024, DeepBook distributed the DBClaimNFT, a soulbound (non-transferable) NFT, to over 100,000 active Sui ecosystem participants. These NFTs were unwrapped into DEEP tokens during the token generation event (TGE), ensuring that the airdrop reached genuine users and not speculators.
2. "Trade to Earn" Incentives
DeepBook has engaged users through campaigns like Sui Wonderland 2024, where participants completed tasks such as placing trades or providing liquidity to earn rewards. These initiatives gamified the onboarding process and familiarized users with DeepBook's interface.
3. Liquidity Mining and Partner Programs
While DeepBook operates as a CLOB, it incentivizes liquidity provision through maker incentives. Market makers who stake DEEP tokens can earn rebates, and strategic partners, including professional market-making firms, have been allocated DEEP tokens to support liquidity.
4. Community Engagement and Governance Events
DeepBook maintains community involvement through regular updates and educational content. The introduction of DEEP token staking allows users to participate in governance, influencing parameters like fee structures and staking requirements.
The DEEP Token: TGE, Airdrop, and Tokenomics
The DEEP is the official token of DeepBook, the decentralized central limit order book (CLOB) built on the Sui blockchain. As DeepBook continues to grow, DEEP plays a pivotal role in facilitating seamless transactions, incentivizing liquidity, and aligning the interests of all participants in the ecosystem.
Key Metrics:
- Total Volume: $8.6B
- Total Users: 11.2M
- 24-Hour Volume: $28.5M
- DEEP Burnt from Trading Fees: $15.2M
DEEP’s Utility
Payment: DEEP is used for trading fees and pool creation fees on DeepBook. By utilizing a native currency, DeepBook ensures a unified and cohesive trading experience, enhancing user convenience.
Liquidity: DEEP boosts liquidity within DeepBook pools by providing rebates to market makers during low liquidity periods and offering volume-based discounts to liquidity takers. This ensures minimal slippage and creates a robust trading environment suitable for both professional traders and institutional investors.
Governance: DEEP enables governance at the pool level, allowing users to vote on critical parameters such as staking requirements and fees. The token’s quasi-concave voting system ensures that smaller token holders maintain a significant voice, preventing large holders from dominating governance decisions.
Token Distribution & Release Schedule
DeepBook's Token Generation Event (TGE) marks a crucial step in solidifying its position as the leading platform for wholesale liquidity in Web3. The tokenomics strategy ensures that incentives are aligned with the ecosystem's growth and sustainability.
- Token Symbol: DEEP
- Max Supply: 10,000,000,000
- Initial Circulating Supply: 2,500,000,000
- Vesting: 25% unlocked at genesis, with the remaining tokens gradually released over 7 years.
Token Allocation Breakdown:
- 10% – Initial Community Airdrop: Fully unlocked and distributed at TGE, this portion rewards early adopters and active users who have contributed to the success of DeepBook.
- 28.43% – Core Contributors and Early Backers: Allocated to investors, team members, and early backers. This portion is subject to a 3-year vesting schedule, with a 1-year cliff and 24-month linear unlock. Mysten Labs receives 1% unlocked at TGE, with the remaining tokens unlocking over 48 months.
- 61.57% – Ecosystem Growth: Allocated to long-term ecosystem growth, including developer grants, community programs, and initiatives. 14% of this allocation is unlocked at TGE, with the remainder to be unlocked gradually over 7 years to ensure sustainable growth.
DEEP will be distributed over the next 7 years to support the long-term expansion of DeepBook’s ecosystem, ensuring that community-driven growth and decentralized governance remain at the core of its development.
Getting Started with DeepBook
Now that we’ve covered the what and why of DeepBook, you might be wondering: How can I actually use DeepBook to trade or build? The good news is that interacting with DeepBook is becoming increasingly straightforward, thanks to wallet integrations and friendly front-ends. Here’s a quick guide to getting started:
1. Set Up a Sui-Compatible Wallet: To trade on DeepBook, you’ll need a Sui wallet that can connect to DEX interfaces or dApps. If you already have Backpack, simply add the Sui network in your wallet settings. Once your wallet is set up with Sui and funded with some SUI (for gas), you’re ready to go.
2. Access a DeepBook-Enabled Trading Interface: Remember, DeepBook itself doesn’t have a native GUI, but many platforms provide a front-end for it. One simple way is via Backpack Wallet. Use dedicated Sui DEX UIs that plug into DeepBook. Some of the prominent ones include: Aftermath Finance, Cetus, Turbos Finance, etc. These platforms often present order books, price charts, and trade forms. For instance, Aftermath Finance provides a pro trading interface where any limit orders you place are actually going to DeepBook’s shared order book (Aftermath is essentially a front-end and additional DeFi services on top of DeepBook). You can pick any of these, ultimately, they should all give you access to the same liquidity. It’s like different portals to the same exchange. Choose one you find user-friendly. (If you prefer command-line or writing code, you could also interact via the DeepBook SDK or directly through Sui client calls, but that’s for advanced users.).
3. Trade DEEP on Backpack Exchange: The DEEP token is now officially listed and available for trading on Backpack Exchange. Plus, participate in the DEEP Trading Quest Pool, the top 300 traders by trading volume in the DEEP token pair will share a prize pool of 112,500 DEEP tokens. Start trading now and earn rewards!
In case you run into any issues or have questions, DeepBook has documentation on Sui’s developer docs and an active Discord community.
DeepBook’s Vision and Long-Term Impact
DeepBook is set to transform decentralized finance (DeFi) with its innovative on-chain order book, offering a high-performance liquidity infrastructure. By integrating with the Sui blockchain, DeepBook aims to become the go-to platform for professional traders and DeFi protocols, driving deeper liquidity and tighter spreads.
Looking ahead, DeepBook plans to expand its ecosystem, with features like cross-chain liquidity and new trading products. These developments could position DeepBook as a leading decentralized exchange across multiple blockchains.
Join the DeepBook community today, explore the platform, start trading, or participate in governance to help shape the future of DeFi.
FAQ Section
What is DeepBook?
DeepBook is a decentralized central limit order book (CLOB) native to the Sui blockchain, designed to provide shared liquidity and high-performance trading for DeFi applications.
How does DeepBook differ from traditional AMMs?
Unlike automated market makers (AMMs), DeepBook matches buy and sell orders with price-time priority on-chain, offering tighter spreads and better price discovery.
What is the DEEP token used for?
The DEEP token is used for trading fees, staking rewards, and governance within the DeepBook ecosystem. It incentivizes liquidity provision and aligns the interests of all participants.
How can I start trading on DeepBook?
To start trading, set up a Sui-compatible wallet, fund it with SUI for gas, and access a DeepBook-enabled trading interface like Aftermath Finance or Backpack Exchange.
What are the benefits of staking DEEP tokens?
Staking DEEP tokens allows users to earn fee reductions, maker rebates, and participate in governance decisions, influencing parameters like fees and staking requirements.
Is DeepBook secure?
Yes, DeepBook operates fully on-chain, ensuring transparency and security. Users retain control of their assets in their wallets, unlike centralized exchanges.
Ready to explore DeepBook? Download Backpack Exchange today and start trading DEEP!