What is DeepBook? DeepBook is a decentralized Central limit order book (CLOB) built on Sui’s ecosystem. DeepBook provides deep liquidity for all Defi protocols built on Sui. So what’s special about DeepBook? Let’s find out with Weakhand in this article.
Before jumping into the article, everyone can refer to some of the following articles to understand better.
- What is sui (SUI)? Overview of the Sui cryptocurrency
- Sui Ecosystem & The First Pieces of the Ecosystem Puzzle
- Summary of potential projects on the Sui Network ecosystem
What is DeepBook?
What is DeepBook?
DeepBook was built by the Sui Foundation & MovEX development team as a public product for the Sui community, focusing on execution and user experience rather than monetization. Therefore, DeepBook will have no tokens nor any mandatory conditions for users to transact or integrated applications on DeepBook.
DeepBook Operating Model
Sui opens a new chapter in Defi with the launch of DeepBook – decentralized Central limit order book (CLOB). Built by a community of Sui Contributors, DeepBook allows new projects to find available liquidity to build and grow their projects.
DeepBook provides Defi developers with a ready-to-use liquidity layer
DeepBook’s architectural model includes two main components: Order matching engine and intelligent routing engine. With the order matching engine using an order book built on a shared object pool across all DeepBook integrated Defi protocols. Matching between assets happens on-chain, while the routing engine handles off-chain transactions allowing to find all transactions in the Swap Pool and use a test run to simulate the number of Tokens that users Users can receive from each route thereby helping users get the best amount of liquidity at that time.
Additionally, DeepBook supports both Limit Orders and Market Orders from sellers and buyers. This helps users to use many different strategies during their trading process.
The Benefits That DeepBook Brings
Liquidity support
DeepBook provides the Sui community with a direct mechanism to participate in the Sui economy. Similar to Order Book in other markets, DeepBook’s order book architecture allows users to enter the market and place Limit Orders. Those who sell SUI tokens are called “Ask” can set the price they want called a Limit Order or use a Market Order to sell at the current market price.
Those who want to buy the SUI token called “Bid” can also use 2 commands Limit Orders and Market Order for your trading activities. The Limit Order is only executed if CLOB finds a match between the buyer and seller.
DeepBook’s order pooling capabilities also provide greater flexibility compared to simple one-to-one transactions. If a buyer uses a Limit Order of 1,000 SUI and there are currently no sellers offering that amount of tokens, DeepBook will automatically pool current seller orders to satisfy the bid amount. of the buyer.
Transparency and privacy
As a CLOB, DeepBook acts like a digital ledger that records buy and sell orders in chronological order and automatically looks for matches between the two. It also takes into account user parameters in transactions such as price.
The digital ledger is open so everyone can see transactions and prices, providing clear evidence of equality. This transparency can also be used to create metrics and dashboards to monitor trading activity.
Although transactions are public, DeepBook maintains user privacy in accordance with Sui’s general practices and technology by displaying wallet addresses in the ledger instead of personally identifiable information.
Economical with large-scale transactions
With DeepBook being a common Order Book for many Defi protocols on the Sui ecosystem at the present time. This allows for aggregation and provides a large source of liquidity to help investors and organizations buy and sell large amounts of Tokens without fear of being affected by large price fluctuations.
Additionally, in most other Blockchains gas fees increase as transactions increase but gas fees do not increase significantly on Sui. This very important difference means that on other Blockchains, the majority of users will pay more transaction fees simply because there are more users making transactions. As trading volume increases significantly on Sui, gas fees and costs per transaction will not increase. This will help users save more money to spend in the market.
summary
DeepBook was created with the purpose of helping any developer integrate into their Defi protocol and take advantage of the large liquidity that DeepBook provides. Above is all the information I want to introduce about DeepBook, hope everyone has received a lot of useful knowledge.
