After a year in operation, DeepBook has revolutionized Sui DeFi protocols, offering users unparalleled trading experiences with deep liquidity, faster execution, and reduced slippage. Protocols like Kriya, FlowX, and Hop Aggregator have integrated DeepBook, creating vibrant markets for DeFi users. As an open-source central limit order book (CLOB), DeepBook provides a transparent and easily integrable liquidity source for any Sui DeFi protocol. Its support for both market and limit orders offers traders a range of options, making it a cornerstone for sophisticated trading activities. “We were the first to provide limit orders natively in our web app via DeepBook,” said Aditya Dwivedi, co-founder of Kriya.

Unmatched Performance and Scalability

DeepBook, as a native liquidity layer on Sui, benefits immensely from Sui’s rapid transaction processing and scalability. Sui’s consensus engine allows single-owner transactions to bypass traditional consensus, removing significant performance hurdles. This architecture supports scaling, enabling network infrastructure supporters to add resources as traffic increases.

These technical advantages mean DeFi activities leveraging DeepBook achieve settlement in about 500 milliseconds, with sub-second finality, while gas fees remain consistent and lower than fees on other blockchains. Speed and low overhead are two essential traits for DeFi users. The upcoming deployment of Mysticeti, an upgrade to Sui’s consensus engine, will make DeepBook and the network as a whole even more performant.

“On FlowX, we’ve seen how well DeepBook performs in trades involving primary pairs like SUI-USDC and USDC-USDT,” said Neville Nguyen, CEO at FlowX Finance. “In most cases, our aggregator will route some of its swap volume through DeepBook.”

FlowX’s aggregator seamlessly integrates DeepBook among its liquidity sources to enable swaps. DeepBook easily parallelizes trading pairs, increasing transaction speed and settlement times. These benefits translate directly to the user experience on protocols that leverage it.

Maximizing Market Efficiency

Sui’s scalability ensures consistent and low gas fees, benefiting transactions on DeepBook. However, DeepBook also saves DeFi users money by offering the lowest trading rates.

“Our goal at Hop is to provide customers with the best rates for all Sui assets,” said Bonkman, Founder at Hop Aggregator. “Leveraging DeepBook supports this goal because it often has the best rates, especially during times of market volatility.” Hop Aggregator shows the path it takes to get the best rates, which frequently leverages DeepBook.

As a foundational liquidity layer, DeepBook supports DeFi protocols on Sui by offering a publicly accessible trading pool. Protocols can kickstart their own trading activity by leveraging assets on DeepBook. The common nature of DeepBook means users of one protocol can trade with users of another protocol. Of course, protocols can include DeepBook with other pools as well, ensuring users always get the lowest rates.

DeepBook allows for sophisticated trading activities. As a CLOB, it supports limit orders, so a protocol can let its users set a price at which they are willing to sell an asset within a specific timeframe. In this set-it-and-forget-it strategy, if someone is willing to meet the set price of the asset, the trade goes through, whether the user who initially offered it is active or not.

“DeepBook is the base layer for spot liquidity across Sui DeFi, but its modular tech can be used as a plug-and-play open source matching engine for other use cases as well,” said Dwivedi. “Kriya Perps combines private DeepBook pools with our proprietary margin engine, offering users CEX-like latency and DEX-like transparency at the same time.”

Kriya offers Perps, a DeFi mechanism letting users speculate on the future price of an asset. Perpetual derivatives, or perps, let users speculate on the future price of an asset through a contract. They can let the contract run for however long they like, typically executing it once the asset price hits a point where the user makes a profit. DeepBook’s flexibility in supporting products such as perps makes it popular for protocols that want to explore new offerings.

Smart and Secure Integration

Protocols interested in leveraging DeepBook can refer to its documentation. As an open-source liquidity layer and a public good intended to help DeFi protocols on Sui, it is permissionless. The documentation includes smart contracts for such activities as querying the pool, placing orders, and routing swaps.

“Integrating DeepBook on our frontend was a seamless experience,” said Bonkman. “The open-source DeepBook contracts made this a pleasant experience and a testament to decentralization.”

As open-source software, the community can help make DeepBook fit its needs through updates. DeepBook is included in the Sui Improvement Proposals (SIPs) program, a process through which builders can submit ideas to make Sui better. Early adopter Kriya raised two SIPs focused on private order book creation and order books for specific pairs, adding support for products it was interested in offering and helping out the entire community in the process.

Protocols using DeepBook also draft on its audited contracts, giving them a leg up in their security implementation. Although every protocol needs to ensure that it protects users, a good part of that work is already complete due to the fact DeepBook has already been subject to a thorough audit of its contracts.

DeepBook Secures DeFi’s Future on Sui

DeepBook adds tremendous value to DeFi protocols on Sui, helping them bootstrap in their early stages and providing an ongoing source of wholesale liquidity for continuing operations. Its sophisticated architecture lets protocols design future-forward product offerings for their users.

“We’ll soon be launching tokenized strategies on top of DeepBook, such as delta-neutral market making and basis trading vaults,” said Dwivedi. “And with new upgrades to DeepBook core shipping soon, we’re excited for what’s to come.”

While DeepBook has given protocols an essential foundation, continual development means an exciting roadmap. As previously announced, DeepBook will launch its own token, DEEP, providing a means for both institutional and retail traders to become more involved with governance. Mysticeti’s launch will give DeepBook even lower latency, putting it on par with traditional financial trading platforms while keeping its costs low.

New features and user participation will maintain DeepBook’s position on the cutting edge of liquidity.

The author does not own or have any interest in the securities discussed in the article.