How to DeFi on Sui
Learn about Sui's DeFi landscape and the unique powers offered to DeFi apps and users on Sui.
Whether you’re looking to swap tokens, dive into the world of NFTs, or simply lend your assets to earn rewards, Sui’s DeFi ecosystem has something for you. Sui DeFi is filled with uniquely powerful applications, thanks to native Sui primitives. These primitives help DeFi apps on Sui address common challenges such as liquidity bootstrapping via DeepBook.
A healthy DeFi ecosystem is made of a few cornerstone app types such as borrow and lending protocols, decentralized exchanges (DEXes), and NFT marketplaces. Enabled by Sui’s powerful primitives, the security of the Move programming language, and the ingenuity of the Sui builder community, Sui DeFi offers experiences unlike anything else in Web3.
After getting started on Sui and learning about the role of staking in DeFi, it’s time to get an understanding of Sui’s DeFi landscape.
DeFi on Sui
In other DeFi ecosystems, users often encounter friction points, especially when new to Web3. For example, submitting separate transactions to allow an app access to your assets can be cumbersome and requires gas fees. On Sui, there is no need for approval transactions, as a result of its object-oriented architecture, making DeFi activities smoother and more user-friendly.
Gas fees and transaction speed are crucial factors in DeFi. On Sui, gas fees are not only low but are also stable, ensuring predictability even during high demand thanks to Sui’s gas pricing mechanism that locks in rates each epoch. Additionally, Sui’s consensus mechanism, Mysticeti, finalizes transactions in under a second, offering the lowest latency in Web3 taking Sui DeFi to the next level.
How to DeFi
New DeFi users may find the first steps in interacting with an app to be a bit unfamiliar. Fortunately, most DeFi apps have very similar steps required. The first step is to connect your Sui wallet. There is a ‘Connect Wallet’ button usually found front and center or in the upper right corner of a webpage. When connecting a wallet, there will be multiple wallet options and you may even see the ability to login using a social account, such as Google, via zkLogin. After selecting the wallet app and specific account to connect, you're ready to start interacting with the app.
If you have multiple accounts, switching between them varies by app and wallet. Some apps offer seamless switching and some require you to disconnect, switch accounts, and reconnect. You may also need to disconnect from your wallet as well.
Next, it’s important to understand the various factors that may be worthy of consideration. For example, when considering a swap, it’s helpful to be aware you may incur slippage and gas fees. Slippage is the difference between the expected and actual price of your swap, while gas fees are the costs of processing your transaction. If you’re exploring options like borrowing assets, it’s common that lending might be required first. Understanding these basic concepts can be helpful in navigating DeFi with more confidence but no matter what path you choose, doing your own research and consulting with your advisors is always encouraged.
Sui’s DeFi landscape
Borrow and lending protocols
Borrow and lending protocols enable users to lend digital assets in exchange for the ability to borrow other assets, offering a low-friction, accessible alternative to traditional financial systems.
Driven by smart contracts, these protocols offer a fair and transparent avenue for a fundamental financial tool accessible worldwide.
Here is a list of popular borrow and lending protocols on Sui:
Decentralized exchanges
DEXes allow users to trade assets directly with one another, in a secure and featurefull manner. Leveraging smart contracts, DEXes can facilitate complex peer-to-peer transactions, in an autonomous manner.
Here is a list of popular DEXes and DEX aggregators on Sui:
Derivative exchanges
Derivative exchanges offer a way to trade derivatives, such as options, futures, and perpetual contracts. These exchanges enable traders to hedge against risks and access leverage, among other tools for sophisticated trading strategies.
Here is a list of popular derivative exchanges on Sui:
Yield aggregators
Yield aggregators help users optimize potential return on assets by automatically redistributing them across various yield-generating protocols. These tools offer a simple and efficient way for users to make the most out of the opportunities available in Sui’s DeFi ecosystem.
Here is a list of popular yield aggregators on Sui:
NFT marketplaces
NFT marketplaces are platforms where users can buy, sell, and trade NFTs. These marketplaces provide access to a wide range of digital assets, from art and collectibles to NFTs representing real world assets and infrastructure, enabling builders, creators, and collectors to trade uniquely powerful NFTs on Sui.
Here is a list of popular NFT marketplaces on Sui:
Liquid staking
Liquid staking protocols allow for users to obtain an asset that appreciates proportionally to SUI staking rewards while remaining liquid and transferable. These platforms and assets are foundational to an efficient DeFi ecosystem.
Here is a list of popular liquid staking protocols and their corresponding liquid staking token on Sui:
Step into DeFi
Sui’s DeFi ecosystem stands out by offering powerful user-friendly experiences. The combination of low, stable gas fees, lightning-fast transaction speeds, and the elimination of traditional friction points makes Sui DeFi particularly accessible for newcomers.
Now that you’re up to speed on how to DeFi on Sui, it’s your time to explore and find what excites you the most!
Note: This content is 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.
