An Overview of the DeFi Landscape on SUI Network

Mar 8, 2024 6 min read
SUI DeFI overview


Introduction

Sui, developed by Mysten Labs, is designed to address common challenges in the blockchain space, such as transaction speed and network congestion. SUI features a unique consensus mechanism aimed at increasing transaction throughput and minimizing latency. As a result, Sui is well-suited for a range of applications, particularly in the rapidly expanding area of Decentralized Finance (DeFi).

Decentralized Finance, or DeFi, is changing how we think about financial services. Using blockchain technology, DeFi offers a more transparent, accessible, and inclusive financial system. It removes the need for traditional financial intermediaries, making services like lending, borrowing, and trading available to a broader audience. As the blockchain sector evolves, DeFi is expected to become increasingly influential in the global finance arena.

This article will provide a detailed analysis of the DeFi ecosystem on the Sui network. We will explore the specific attributes of Sui that support DeFi applications, highlight key projects and developments, and examine both the challenges and opportunities in this area. Our goal is to offer an informative and thorough overview that appeals to both those familiar with blockchain technology and those seeking to understand Sui's role in the future of DeFi.

Note: Stakin is a SUI network validator, which means you can stake your SUI tokens with an institutional-grade SUI staking provider for maximum security and reliability, and an attractive APR

The Advancement of Sui DeFi

The Sui network, a newer entrant in the blockchain field, has rapidly expanded its DeFi ecosystem. Initially, the network's DeFi offerings were limited, featuring basic trading platforms and yield farming applications. However, in recent months, there has been significant growth. More complex DeFi applications have been developed, such as sophisticated decentralized exchanges (DEXes) and lending platforms. This growth is largely due to Sui's high-performance architecture, which supports fast and efficient transactions, a key requirement for successful DeFi applications.

Sui's recent DeFi growth can be attributed to several factors:

Developer Engagement: Increased interest from developers, drawn by Sui's efficient design and user-friendly features, has led to a broader range of DeFi applications.

Community Support: The expanding Sui community, encompassing developers and users, has created an environment that encourages the rapid development and improvement of DeFi projects. SUI features a thriving support of developers, and a commendable number of total network commits.

Source: SUI’s Developer report

Technological Advancements: Ongoing updates and enhancements to the Sui network have made it more scalable and secure, attracting complex financial applications.

Strategic Partnerships: Collaborations with various entities in the blockchain sector are playing a key role in advancing Sui's DeFi ecosystem.

Compared to other blockchain networks, Sui's DeFi landscape shows both similarities and distinct features. For instance, Sui's scalability and transaction efficiency set it apart from networks like Ethereum, potentially making it more suitable for high-frequency DeFi applications. 

While other networks have more established DeFi ecosystems with a wide range of products, Sui is rapidly developing, focusing on refining standard DeFi offerings. Additionally, Sui's approach to engaging developers and the community is now more aggressive, which could lead to quicker growth of its DeFi ecosystem compared to more established networks.

Source: DeFiLlama 

The Total Value Locked (TVL) in the Sui ecosystem stands at $530+ million as of March 08, 2024. This figure represents the amount of capital that is being staked, lent, or made available for trading on decentralized financial markets. The TVL's significant value suggests a strong trust and commitment from users in the Sui network's DeFi protocols.

The chart also shows a steady and pronounced uptrend, which indicates that more users are engaging with the network over time and that there's an increasing amount of capital being injected into Sui's DeFi platforms. 

The sharp rise toward the end of the period could be due to several factors, such as the launch of new DeFi protocols on the network, upgrades to existing protocols, increased publicity, and broader market conditions becoming more favorable for DeFi investments.

Source: KriyaDEX Documentation

Introduction to Key Protocols in Sui DeFi

NAVI Protocol
NAVI stands as the first Native One-Stop Liquidity Protocol on Sui, offering a platform for users to either provide liquidity or borrow within the ecosystem. Liquidity providers contribute assets to the market, earning yields, while borrowers access loans for various assets. 

NAVI aims to be a central figure in Sui's evolving DeFi world. NAVI’s features, including Automatic Leverage Vaults and Isolation Mode, allow users to leverage their assets with minimized risks. NAVI supports digital assets at varied risk levels and prioritizes security to protect user funds, its key offerings include earning interest, borrowing, and accessing both Bluechip and LP-based Pools.NAVI recently integrated Volo, a liquid staking service on Sui, marking a significant expansion to offer a combined suite of borrowing, lending, and staking services. As of March 08’, 2024, NAVI has over $110 million in Total Value Locked, according to DefiLlama.

Scallop Lend
Scallop Lend emerged as the peer-to-peer Money Market in Sui's DeFi scene and the first recipient of an official grant from the Sui Foundation. It focuses on institutional-grade quality and security, offering high-interest lending, low-fee borrowing, AMM, and a digital asset management tool. Scallop Lend also provides an SDK for professional traders, enhancing its utility in the ecosystem.

Cetus
Cetus significantly impacts Sui's DeFi growth as a leading DEX and concentrated liquidity protocol. It operates on Sui and Aptos blockchains, aiming to simplify trading for users and assets. 

Cetus excels in liquidity efficiency, offering benefits to liquidity providers and traders through its concentrated liquidity algorithm. This approach allows for efficient transaction fee generation and low-slippage trading. Developers can also integrate with Cetus's openly accessible smart contracts and SDKs, tapping into its efficient liquidity sources. Cetus recently achieved a significant feat by surpassing $2 billion in total transaction volume.

AfterMath Finance
AfterMath Finance is developing a comprehensive platform for trading, investing, and yield earning. It focuses on creating an intuitive experience across its markets. The platform features a Constant Function Market Maker for multi-asset pools, low slippage trades, a Smart-Order Router, liquid staking derivatives, perpetual markets, and isolated lending pools. AfterMath is designed to cater to a broad range of DeFi activities, emphasizing speed, cost-efficiency, and transparency.

FlowX Finance
FlowX Finance is an ecosystem-focused DEX on Sui, enhancing the DeFi experience with advanced features. It aggregates rates from all AMMs on SUI, providing token swapping, liquidity contribution, yield farming, and IDO participation. The platform stands out with its multi-token swap function, position migrating, DEX aggregator, and Farming as a Service. These functionalities streamline the trading process and support new projects in launching their tokens.

KriyaDEX
KriyaDEX addresses the specific needs of institutions and large-scale traders in DeFi. It tackles issues like high latency, capital inefficiency, and complex onboarding processes. The Kriya Suite, including a cross-chain bridge, a Spot AMM, an order book-based DEX, and an OTC platform, is designed to aggregate liquidity, enhance capital efficiency, and offer an institutional-level user experience.

Deepbook
Deepbook is a decentralized central limit order book built for Sui's ecosystem. Deepbook's open-source, permissionless structure accelerates the development of financial apps on Sui, offering an efficient and shared financial layer for trading fungible assets.

Turbos
Turbos Finance is a non-custodial, efficient DEX on Sui. It revolutionizes decentralized trading with its concentrated liquidity concept. The platform maximizes capital efficiency and enables dynamic asset management, giving liquidity providers control over asset trading ranges.

Haedal Protocol
Haedal Protocol also offers liquid staking on Sui, allowing users to stake SUI tokens while remaining active in DeFi activities. It features easy staking, no lockup periods, and high DeFi yields. 

Impact in Sui's DeFi Landscape

Top 9 Protocols by TVL on the Sui Network of March 08, 2024. Source: DeFiLlama

These protocols collectively shape Sui's dynamic DeFi ecosystem. The recent significant transaction volumes of protocols like Cetus demonstrate strong user engagement.

Increasing user adoption on platforms like Scallop Lend and Haedal Protocol reflects the network's capacity to meet diverse DeFi requirements. 

Protocols like Deepbook and KriyaDEX enhance trading depth and liquidity pools, ensuring market efficiency.

Haedal Protocol's focus on liquid staking attracts many Sui token holders, bolstering network security and robustness. These diverse offerings highlight the growing user confidence and participation in Sui's DeFi landscape.

Final Thoughts

The DeFi sector within the Sui network has shown remarkable development, underscored by a substantial increase in Total Value Locked, which serves as a proxy for user trust and protocol utility. The network's core attributes, notably its high transaction throughput and low latency, have been critical in cultivating an environment where DeFi can flourish.

The excitement around anticipated airdrops and the inflow of new users suggests that interest in Sui's DeFi capabilities is not just steady but accelerating. With a lineup of promising protocols and a community-driven approach, Sui is crafting a DeFi environment that is functional and secure.

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