Jack Anderson
21 Aug 2024 06:20
DeepBook, the underlying liquidity layer of Sui, enhances the platform’s DeFi protocols by exploring new use cases including futures, lending, and payments.
DeepBook, a native liquidity layer launched on the Sui blockchain last year, is set to revolutionize decentralized finance (DeFi) with a variety of new use cases. According to The Sui Blog, DeepBook’s functionality extends far beyond its current applications, with potential features including perpetual futures, lending, and payments.
Enhanced DeFi Features
Built as a permissionless central limit order book, DeepBook functions as a neutral exchange with built-in mechanisms to enable DeFi on Sui. Several DeFi protocols such as Cetus, Aftermath, Kriya, FlowX, and Hop Aggregator are already leveraging DeepBook for their liquidity needs, creating dynamic markets for their users.
The protocol finds DeepBook’s features attractive. For example, Aftermath praised its trading speeds and reduced processing times, which enable a fully on-chain trading environment that rivals centralized exchanges in terms of liquidity and user experience.
Future Use Cases
Currently, DeepBook supports both market orders and limit orders. However, the architecture is designed to accommodate more advanced features. In the near future, protocols using DeepBook can expect a variety of new features. One of the most anticipated is the integration of perpetual futures (perp). Perp allows users to enter into contracts to buy or sell assets at a specified price without an expiration date, providing flexibility and capital efficiency.
In addition to Puff, DeepBook is ready to support permissionless lending and borrowing. Sui’s current lending protocol allows users to offer assets at interest, but the lender loses access to those assets until the loan is repaid. DeepBook can pool user assets and make them available to borrowers through the platform, increasing liquidity and user engagement.
Cross-chain integration
Recently, Sui Bridge, a native bridge for Sui, was launched, allowing for fast and cheap transfers of assets between Sui and Ethereum blockchains. Integrating Sui Bridge with DeepBook would be a logical extension, allowing users to access capital from other blockchains for use in the Sui DeFi protocol. This integration can improve the user experience by streamlining the process that currently involves multiple parties.
Cross-chain aggregation is another potential development. This will allow DeepBook to access liquidity pools on other blockchains, greatly expanding the range 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, to optimize the trading experience for users.
Payment in legal tender
One of the most ambitious potential use cases for DeepBook is building a payment platform that trades fiat currencies. Users can pay with fiat currencies via Sui through various onramps and offramps, but integrating DeepBook can streamline this process. A payment platform built on DeepBook would excel at fiat currency exchange, using SUI or custom digital assets as an intermediary between various global fiat currencies.
As a liquidity layer that serves all DeFi protocols on Sui, DeepBook provides powerful trading functions similar to traditional financial markets. By integrating advanced features such as puffs, lending, and cross-chain aggregation, DeepBook can provide more efficient services that benefit both protocols and end users.
NOTE: This content has been prepared 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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