DeepBook Expands Sui's Liquidity Layer with New Use Cases
Zach Anderson Aug 21, 2024 06:20
DeepBook, Sui's native liquidity layer, explores new use cases including perpetual futures, lending, and payments, enhancing DeFi protocols on the platform.
DeepBook, a native liquidity layer launched on the Sui blockchain last year, is set to revolutionize decentralized finance (DeFi) with a range of new use cases. According to The Sui Blog, DeepBook's capabilities extend far beyond its current applications, with potential features including perpetual futures, lending, and payments.
Enhanced DeFi Capabilities
Built as a permissionless central limit order book, DeepBook functions as a neutral trading floor with built-in mechanisms to enable DeFi on Sui. Several DeFi protocols, such as Cetus, Aftermath, Kriya, FlowX, and Hop Aggregator, already utilize DeepBook for their liquidity needs, creating dynamic markets for users.
Protocols find DeepBook's features compelling. Aftermath, for instance, has praised its transaction speed and reduced processing time, which enable a fully on-chain trading environment that rivals centralized exchanges in liquidity and user experience.
Future Use Cases
Currently, DeepBook supports both market and limit orders. However, its architecture is designed to accommodate more advanced functionalities. In the near future, protocols using DeepBook can expect a wealth of new capabilities. One of the most anticipated features is the integration of perpetual futures (perps). Perps allow users to enter contracts to buy or sell an asset at a specified price without an expiration date, offering flexibility and capital efficiency.
In addition to perps, DeepBook is poised to support permissionless lending and borrowing. Current lending protocols on Sui let users offer their assets at an interest rate, but the lender loses access to those assets until the loan is repaid. DeepBook could aggregate user assets into a pool, making them available to borrowers through the platform, thereby increasing liquidity and user engagement.
Cross-Chain Integration
The recent launch of Sui Bridge, a native bridge on Sui, facilitates the quick and inexpensive transfer of assets between Sui and Ethereum blockchains. Integrating Sui Bridge with DeepBook would be a logical extension, allowing users to access capital on another blockchain for use in a Sui DeFi protocol. This integration could streamline processes that currently involve multiple parties, enhancing user experience.
Cross-chain aggregation is another potential development. This would enable DeepBook to access liquidity pools on other blockchains, significantly expanding the breadth of liquidity available to users. Aggregators within the Sui ecosystem already use routers to find the best swap rates among various liquidity sources, including DeepBook, optimizing the trading experience for users.
Fiat Currency Payments
One of the most ambitious potential use cases for DeepBook is powering a payment platform dealing in fiat currency. Although users can make fiat currency payments over Sui through various onramps and offramps, integrating DeepBook could streamline this process. A payments platform built on DeepBook would excel in fiat currency exchange, using SUI or a bespoke digital asset as an intermediary between different global fiat currencies.
As a liquidity layer serving any DeFi protocol on Sui, DeepBook offers powerful trading functionality akin to traditional financial markets. By integrating advanced features like perps, lending, and cross-chain aggregation, DeepBook can provide even more efficient services, benefiting both protocols and end-users.
Note: This content is for general educational and informational purposes only and should not be construed or relied upon as an endorsement or recommendation to buy, sell, or hold any asset, investment, or financial product and does not constitute financial, legal, or tax advice.
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