DeepBook unveils token launch plan alongside NFT airdrop preview

Sui’s first native liquidity layer, DeepBook, is reaffirming its status as the network’s central financial infrastructure by creating its native token, DEEP. Institutions and institutional traders that use DeepBook to supply wholesale liquidity in DeFi are the target audience for DEEP. DeepBook and DEEP, working together, provide the best Web3 location for DeFi apps to source liquidity.

The DEEP coin has several important characteristics, such as maker incentives and volume-based fees. Users must attain particular DeepBook pool staking criteria to use those functionalities. By staking their DEEP tokens, those users will also participate in the governance of those pools.

Professional traders and DeFi protocols can use DeepBook’s pools and take advantage of its fully on-chain central limit order book architecture, which provides rich retail services. Users can make limit orders in DeepBook pools in addition to market token orders, enabling complex trading capability. Deepbook delivers a practical framework for DeFi, facilitating liquidity and opening doors for financial product innovation.

Due to the DEEP token’s design, DeepBook’s several unique participants are encouraged to cooperate to provide sufficient liquidity that is available 24/7, which improves wholesale liquidity. It will strengthen the fundamental liquidity of DeepBook for DeFi protocols. Features of this design are targeted toward institutional users.

• Volume-based fees: Although anyone can trade on DeepBook, the costs that these traders must pay vary depending on how active they are in the trading pool. In contrast to occasional traders who pay greater fees and are more inclined to utilize brokers or DeFi protocols, this enables institutional traders, DeFi protocols, and other active participants to pay modest fees on the margin.

• Maker incentives: Additional DeepBook token-denominated incentives are given to DeepBook’s liquidity providers, known as makers, which collectively reduce the total amount of liquidity supplied in a particular epoch. Because of this, DeepBook can sustain a steady depth of liquidity during times when there would typically be little of it.

• Stake-based participation: To take advantage of the discounted fees and incentives offered by the two programs mentioned above, traders must stake a minimum amount of tokens in the pool upfront and throughout the era. There are no clear rewards for these stakes. In addition to paying the usual trading charge in that DeepBook pool, any trader failing to stake this minimum amount will also forfeit their eligibility for any maker incentives the pool may offer. Because of this initial capital requirement, DeepBook is further positioned as a focus for wholesale instead of retail liquidity.
• Stake-based governance: Distinctly, the management of a particular pool is managed by its stakeholders. Stakeholders in a given pool will specifically set the boundaries surrounding fees and maker incentives, with governance rights increasing with stake weights.

DeepBook reduces governance capture by restricting the parameters used to define rules. While traders can vote for lower costs, such a vote would apply to all charge schedules, removing the possibility of price schedules specifically designed to benefit certain users only.

In addition to verifying governance capture, staking quantities exceeding specified thresholds result in declining governance rights, which do not rise linearly with stake quantity. Smaller traders in the system continue to have a voice thanks to this process.