As Sui's first native liquidity layer, DeepBook promises to unleash a new world of token trading activity. With DeepBook, token exchanges leveraging the layer can feature transparency, a full range of trading options, and customer privacy. Equally as important, it embodies the virtues of decentralization by operating as a fair and permissionless environment to support token trades.
Further, as part of the Sui codebase, DeepBook is open for community development. Anyone may use the Sui Improvement Proposals (SIPs) process to suggest changes to make DeepBook better.
In itself, DeepBook does not include an end-user interface for token trading. Rather, it offers built-in trading functionality which can support token trades from decentralized exchanges, wallets, or other apps. Developers building apps will be able to leverage its SDK to build functionality for token trades and price queries.
DeepBook gives the Sui community a direct mechanism to participate in the Sui economy.
Similar to order books for other market places, DeepBook's central limit order book (CLOB) architecture lets users enter market and limit orders. People selling SUI tokens, referred to as an "ask," can set the price they want, referred to as a limit order, or sell at the market's going price. Those seeking to buy SUI, referred to as a "bid," can pay the current market price or set a limit amount they're willing to pay. Limit orders only get fulfilled if the CLOB finds a match between a buyer and seller.
DeepBook's ability to pool orders offers even greater flexibility than simple one-to-one trades. If a buyer puts in a limit order for 1,000 SUI, and no single seller is currently offering that quantity of tokens, DeepBook automatically pools the current asks to meet the quantity of the buyer's bid.
Transparency and privacy
As a CLOB, DeepBook works like a digital ledger, logging bids and asks in chronological order and automatically finding matches between the two sides. It takes into account user parameters on trades such as prices.
The digital ledger is open so people can view the trades and prices, giving clear proof of fairness. This transparency can also be used to create metrics and dashboards to monitor trading activity.
Despite the open window on trading activity, DeepBook maintains user privacy in keeping with general Sui practices and technology by showing wallet addresses in its ledger rather than personally identifying information.
Just the beginning
Sui needs liquidity mechanisms to operate, and a CLOB fits this need well. In particular, DeepBook's sophisticated trading functionality supports a wide range of participants, from individual to institutional. As with Sui's highly performant network technology, builders can leverage DeepBook to give users gratifying experiences and robust features.
However, DeepBook is not the only option. Although it is a native, open source liquidity layer, builders may develop their own alternative liquidity layers. Some, through the SIPs process, may become Sui native, while others may operate independently.
On Sui, DeepBook begins a new chapter in liquidity.