DeepBook, Sui’s native Central Limit Order Book (CLOB) and foundational liquidity layer, will be ready for primetime in a few weeks. The community is completing final testing and you are invited to participate. In addition, app builders can start integrating their apps with DeepBook now so they are ready to go when the order book is fully tested and reaches the liquidity to start trading.
An Introduction to DeepBook
A robust financial system requires liquidity. Users must be able to easily and efficiently trade their assets. In traditional finance, this role is taken by centralized exchanges such as the New York Stock Exchange and Nasdaq. In decentralized finance, this role is taken by decentralized exchanges which usually take the form of Automated Market Makers (AMM) or Central Limit Order Books (CLOB).
AMMs are a straightforward approach to liquidity. A smart contract establishes a liquidity pool of particular assets. The rate of exchange is determined by the amount of each asset in the pool and the total value of the pool. Trades are submitted at the set price and assets are exchanged immediately. An order book is not necessary.
On the other hand, a CLOB is a trade execution model where both sides of a trade must be matched by the system. Both buy and sell orders are submitted, either at the market price or a limit price (a specific price desired by the trader), and the matching engine executes the orders when criteria on both sides are met. In Sui, the order book, DeepBook, lives on-chain with complete visibility into the order flow, depth of the order book, and the order matching process.
DeepBook is the public CLOB that makes up the foundational liquidity layer on Sui. The goal of DeepBook is to ensure there is liquidity available for all builders interested in developing financial products on Sui. Just like traditional finance exchanges enable financial activities such as raising capital, trading, and market making, DeepBook will provide the liquidity rails for many of Sui’s on-chain finance applications.
DeepBook was conceived as a public good for the Sui community, with a focus on execution and user experience rather than monetization. For this reason, it does not have a token associated with it nor does it have any required gates for users to trade on it or applications to integrate with it.
How You Can Help
DeepBook’s codebase was originally developed by MovEX and now has been merged into Sui Network as an integral part of the Sui framework. Like the rest of the Sui Network, it is open source and welcomes community contributions.
Although DeepBook’s code base has been fully audited by an external and independent party, DeFi builders in the Sui community can help ensure that DeepBook has the performance and security characteristics needed for success. Integrate DeepBook with your app today. Provide feedback and contributions by reporting issues and sending pull requests on GitHub.
Community members can also use the Sui Improvement Proposals process to facilitate, and collectively decide on its next steps.
Liquidity is Coming to the Assets on Sui
These final weeks of testing should open the doors for liquidity on Sui. At that point, Sui’s on-chain finance ecosystem will be ready for action, allowing users to create new trading pairs and exchange assets directly, as well as enabling more apps to integrate with DeepBook to leverage its deep liquidity.
Community participation will also ensure the initial development of DeepBook accelerates the process of the full decentralization of Sui.