DeepBook Protocol (DEEP): a new trading platform on Sui
As the market for decentralized finance (DeFi) has evolved, it has engaged developers in an arms race: now, decentralized trading protocols need to stand out from their competitors in some way to attract liquidity. This could involve being more performant, secure, and flexible than others, as well as embracing new blockchain ecosystems.
What is DeepBook Protocol?
DeepBook Protocol is a new decentralized trading platform and automated market maker (AMM) protocol based on the Sui blockchain.
DeepBook Protocol is designed to ensure minimal slippage (the difference between the price at which a user intended to execute a trade and the price at which it was executed) when trading digital assets on a decentralized platform.
The DeepBook Protocol team pays no less attention to protocol security and, therefore, applies a comprehensive approach to protecting the platform. Developers and independent auditors regularly check the code for possible bugs and exploits. To encourage the community to participate in security, DeepBook Protocol offers bug bounty programs. One such program paid out over $50,000 in 2024 to researchers who discovered and reported various vulnerabilities.
The DeepBook protocol uses an advanced market-making algorithm (Central Limit Order Book model — CLOB) designed specifically to ensure stable liquidity of all trading pairs and minimal slippage when trading on the platform. According to the developers, the mechanism embedded in the DeepBook Protocol can process large trading volumes without losing performance.
Advantages and disadvantages of DeepBook Protocol
The first advantage of DeepBook Protocol lies in the high performance of the Sui blockchain, which underlies the protocol. The Sui blockchain platform can process transactions in 390 ms, and the average fee on this network is less than a cent.
This makes Sui a suitable blockchain for trading platforms where high order processing speed is important. For comparison, the commission in the Ethereum network as of February 2025 is $0.11, and the transaction execution time is about 1.5 minutes.
In addition, DeepBook Protocol developers regularly release protocol updates. Just a year and a half after its launch, the third version of the DeepBook Protocol was released, which further improved the trading platform's performance by providing deeper liquidity and reducing spreads (the difference between the buy and sell prices of assets).
The disadvantages of the DeepBook Protocol include relatively small liquidity. Even though DeepBook Protocol ranks second among DEX exchanges in the Sui ecosystem regarding total blocked value (TVL) after Cetus AMM, according to DeFi Llama data for February 2025, this figure is only $19.8 million. This is hundreds of times less than the leading DEX exchanges in the DeFi segment: Uniswap, Raydium, or PancakeSwap.
Another disadvantage of the DeepBook Protocol platform is that it depends on the only Sui ecosystem, which, according to DeFi Llama data, ranks only 8th in terms of the value of blockchain assets in the DeFi segment, far behind Base and Arbitrum.
DeepBook Protocol token
In October 2024, the DeepBook Protocol team released its own token, DEEP, on the Sui blockchain. That same month, the token was listed on exchanges, and DEEP reached $0.015 at the start of trading.
Since listing, the price of the DEEP token has increased by more than 700% to $0.20. The historical maximum price of the DEEP token was recorded in January 2025 at $0.34.
Initially, 2.5 billion DEEP tokens were issued, or 25% of the maximum supply of 10 billion. According to the unlock schedule, the tokens will be unlocked within 7 years. Currently, 2.87 billion DEEP tokens are circulating on the market.
According to CoinMarketCap's February 2025 data, the DEEP token is ranked 108th in the overall cryptocurrency ranking by market capitalization, which is $600 million.
The DEEP token is a key asset of the DeepBook Protocol ecosystem and performs the following functions:
- Payment of commissions. Investors and traders can use DEEP tokens to pay trading fees and pooling commissions on DeepBook's DEX exchange;
- Liquidity Discounts. The DeepBook Protocol platform provides discounts on commission payments to liquidity providers and market makers;
- Governance. DEEP token holders can manage pools on the DeepBook Protocol platform by voting to adjust the staking requirements and trading commission levels. The governance mechanism is designed so that even small DEEP holders receive a large voting weight.
The Future of DeepBook Protocol
According to the roadmap, the team plans to integrate open-ended futures trading into the DeepBook Protocol and add lending mechanisms, including using cross-chain liquidity (pooling liquidity from multiple blockchains).
However, the team's plans to add support for other networks to trade assets on the DeepBook Protocol platform have not been announced yet.