DeepBook (DEEP) tokenomics

DeepBook is a permissionless central limit order book (CLOB) built to serve as a foundational liquidity layer for the entire Sui ecosystem. Its token economics are designed to facilitate decentralized trading, incentivize liquidity provision, and support the governance of the protocol.

Issuance and Allocation Mechanism

The issuance of tokens within the DeepBook ecosystem is tied to its role as a core infrastructure component on the Sui blockchain. While specific total supply figures for a native DeepBook token are not explicitly detailed in the available data, the protocol's operations are deeply integrated with the SUI token.

The allocation and issuance mechanisms for related ecosystem participants often follow structured schedules to ensure long-term sustainability. For instance, typical decentralized protocols on Sui allocate resources across several key pillars:

• Community and Ecosystem: A significant portion is often reserved for ecosystem growth and community initiatives to drive adoption.
• Core Contributors and Team: Allocations for the developers and original architects, usually subject to strict vesting.
• Early Backers and Investors: Distribution to those who provided initial capital for the protocol's development.

Usage and Incentive Mechanism

DeepBook functions as a public utility for the Sui network, and its incentive structure is designed to reward those who contribute to its liquidity and functionality.

Protocol Usage

• Pool Creation: Users can access DeepBook on Sui to create new trading pools. This action requires a one-time fee of 100 SUI.
• Trading and Integration: Developers can use the DeepBook SDK to integrate the CLOB's deep liquidity into their own decentralized applications (dApps), allowing for seamless trading across the ecosystem.

Incentives

The primary incentive for participants is the ability to access a high-performance, low-latency trading environment. By providing a centralized source of liquidity, DeepBook reduces slippage for traders and provides a reliable venue for market makers. In the broader context of the Sui network, SUI tokens are intended for use in governance, where validators have voting power based on the amount of SUI self-staked and delegated (capped at 10.00% of total voting power per validator).

Locking and Unlocking Mechanism

DeepBook utilizes specific mechanisms to manage the flow of assets and ensure protocol stability.

Locking Mechanism

In the context of cross-chain interactions or specific protocol features, locking mechanisms are used to secure assets. A common pattern observed in associated infrastructure involves:

1. Locking on Source: Assets are locked in a bridge or protocol contract on the source chain.
2. Unlocking on Destination: A mirrored or equivalent asset is then released on the destination chain.

Unlocking Time and Vesting

While a specific month-by-month unlock table for DeepBook is not provided, standard practices for high-tier Sui ecosystem projects involve multi-year vesting schedules. These schedules typically span 42 to 60 months to align the interests of stakeholders with the long-term health of the protocol.

The structured nature of these unlocks is intended to maintain price stability and ensure that the protocol remains well-capitalized throughout its growth phases. Information regarding the specific future governance launch date or the exact destination of pool creation fees remains under development by the project teams.