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Behind the typical crypto trade, there’s a lot of high-tech work happening. In order to smoothly manage digital asset ownership, networks need to have enough liquid tokens to handle transfers. DeepBook aims to provide this valuable service for decentralized exchanges (DEXs). Its liquidity provision and order management system helps to streamline trading on the Sui network. Explore this guide to learn more about DeepBook and discover the investment potential of this fascinating project.
Key Takeaways:
DeepBook is a native liquidity layer for the Sui ecosystem that uses a central limit order book system to execute trades successfully.
Looking to trade DeepBook tokens? Bybit now offers the DEEP/USDT Spot trading pair and DEEPUSDT Perpetual contract.
DeepBook is a native liquidity layer for the Sui ecosystem. It uses a central limit order book system to execute trades successfully. DeepBook prides itself on offering high throughput with minimal slippage and low fees.
DeepBook is part of Sui's DeFI ecosystem. Sui is a standalone blockchain whose goal is to provide the benefits of web3 technology with the ease of use of Web 2.0 technology. As Sui worked to create scalable, secure and affordable infrastructure, its team began to realize that there was a need for improved wholesale liquidity. Many of the DeFi projects building on Sui were asking for a way to manage liquidity more efficiently.
Ultimately, the Sui Foundation decided to work on designing a project that would provide liquidity for any other tool built on Sui. It announced that DeepBook would be a public good that could support the entire network and encourage more people to build on Sui’s blockchain.
Like the rest of the Sui ecosystem, DeepBook hopes to offer unparalleled convenience without having to sacrifice decentralization. It plans to operate as a native liquidity layer and function as an intermediary between buyers and sellers, without requiring sellers to give up control of their assets. Unlike centralized exchanges (CEXs), DeepBook aims to stay true to its decentralized roots and keep power in the hands of its community. To achieve this goal, the DeepBook protocol has chosen to focus on achieving the following three essential elements.
Efficiency: DeepBook tries to outpace traditional networks by providing incredibly fast transaction throughput.
Transparency: To ensure that users' digital asset ownership is protected, DeepBook supports plans to keep all of its orders on-chain and completely viewable.
Permissionless: Instead of only allowing certain users to participate, DeepBook is introducing fundamental decentralization that lets any member of the public use its services.
DeepBook uses the concept of a central limit order book to provide liquidity for the Sui ecosystem. The order book keeps a listing of all buy and sell orders that users submit. It then matches these requests for limit orders by both price and quantity. This creates an efficient system in which users get the prices and speeds they want. DeepBook's smart order routing engine also structures its exchange to allow pools of liquidity. If a large buy order is placed, DeepBook can combine small sell orders to meet user demands. Likewise, it can divide up large sell orders to distribute funds to multiple buyers who need smaller amounts.
DeepBook's structure is also designed to be decentralized and transparent. Though it’s run by the Sui Foundation, any interested user can join the foundation or submit proposals. The Sui community can vote on proposals and popular recommendations will be implemented in DeepBook. DeepBook's ledgers are entirely available to the public, so people can get a full list of the prices and trades that it executes.
DeepBook's liquidity provision platform provides many benefits for users.
DeepBook has a settlement time of 390 milliseconds. In addition to preventing inconvenient lagging, this fast trading ensures that there’s minimal slippage. Prices for limit orders are as accurate as possible because orders are executed instantly, without time for market conditions to change. DeepBook's design allows it to retain these speeds even when handling large volumes of trading.
DeepBook's foundational liquidity layer also contributes to stable pricing, due to its substantial liquidity pools. The platform provides rewards for traders who offer liquidity, so it has large amounts of liquid tokens sitting around and waiting to be traded. This ensures that even huge orders are executed smoothly.
DeepBook is built on the same standards of composability as the rest of the Sui community. Its code seamlessly blends with all other projects that run on the Sui network. Developers can easily insert DeepBook's wholesale liquidity into their projects without having to write a lot of extra code.
DeepBook uses a dynamic fee system that adjusts to take market demand into account. However, unlike some other platforms with DeFi protocols, prices don't increase exponentially as trading volume increases. Even during times when it seems everyone is demanding digital asset ownership fast, DeepBook supports its mission to keep fees affordable.
Over the years, Sui has added features to DeepBook to gradually improve pricing efficiency, speed and liquidity support. Version 3 of DeepBook — with a new and improved smart order routing engine — was just released in the second quarter of 2024. It’s currently available on Sui’s testnet, and will be uploaded to its mainnet soon.
There are also a lot of goals on the Sui road map that will end up affecting DeepBook. In 2025, Sui's DeFi ecosystem will be updating a lot of its core functionalities. In addition to improved interfaces and APIs, there will also be more developer tools with DeFi protocols released. Ultimately, this will make it much easier to build on Sui, so there are likely to be more projects using the DeepBook foundational liquidity layer in the near future.
The DEEP token is an essential part of DeepBook's infrastructure. Users need the DeepBook token to pay for trading and pool creation fees. The token’s utility also includes providing rewards to market makers and allowing token holders to vote on staking requirements and fees.
DEEP has a maximum supply of 10 billion tokens, with an initial circulating supply of 2.5 billion. The tokens will gradually be distributed and unlocked over a period of seven years. Of the total token allocation, 61.57% is reserved for ecosystem development, and 28.43% is compensation for DeepBook's core contributors and early backers. The remaining 10% of the token allocation was used for the initial DEEP community airdrop.
Since its launch in mid-October 2024, DEEP has had a slow yet steady rise in price. The coin started out selling for around $0.01, and is currently retailing for roughly $0.06447 (as of Oct 23, 2024). The positive growth of the DeepBook token has led to an overwhelminglybullish outlook for the coin. With its recent 45% price increase, many crypto news aggregators have mentioned DEEP as one of their trending cryptos of the month. Some analysts believe the coin could easily reach over $0.10 within a few weeks. Analysis of its pricing history indicates that DEEP may evenreach $0.14 by the end of 2024.
Looking to trade DeepBook tokens? Bybit now offers the DEEP/USDT Spot trading pair and DEEPUSDT Perpetual contract. To get started, you’ll first need to create a Bybit account, then fund it with cryptocurrency and navigate to the DEEP/USDT Spot trading page or DEEPUSDT Perpetual contract page.
The DEEP token is a promising option for investors who want a trending token backed by a sound project. Not only does the token have a lot of exciting growth, but the underlying DeepBook protocol is also doing well. Sui is a leading blockchain ecosystem, so having support from Sui ensures DeepBook will maintain a flourishing user base for quite a while. Its mission of introducing fundamental decentralization and providing digital asset ownership fast has proven to be highly popular with crypto traders.
However, even if DEEP's token utility makes it more reliable than a random meme coin, some volatility is still likely. Like any other cryptocurrency, random market fluctuations or unflattering news about the coin may cause prices to drop. To protect yourself from this risk, it's essential to pay close attention to portfolio allocation. Never invest more than you can afford to lose in any token, including DEEP, and make sure you also include some blue chip tokens like Bitcoin or Ethereum in your portfolio.
Ultimately, DeepBook is an excellent example of how important liquidity providers can be. Its ability to facilitate trades throughout Sui's DeFi ecosystem has made it an essential part of countless DApps and projects. Any time someone wants to experience fast, affordable and decentralized trading, DeepBook provides an ideal way to obtain liquidity. Furthermore, the project's usefulness also means its crypto is quite valuable. If you enjoy investing in up-and-coming companies, be sure to check out DEEP.
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