Sui Ecosystem Decentralized Finance Prosperity: Project Dynamics and Development Trends

Recently, the native token SUI of the Sui public blockchain has risen significantly in price, reaching a high of $1.36, nearly recovering to its highest level since its launch, surpassing its competitor in the MOVE ecosystem. Meanwhile, the total value locked (TVL) of Sui has also been steadily climbing, breaking through $275 million on January 13, reaching $282 million.

Behind this growth trend is the Sui Foundation's efforts to promote ecological development through various means. As of January 12, Sui has provided a total of $4.72 million in funding for 86 projects. In addition, Sui has also provided extra support for liquid staking, contributing 25 million SUI tokens last December to increase liquidity for the liquid staking token (LST) across various DeFi protocols.

Sui seems to continue providing token incentives for leading DeFi projects, with almost all major DeFi projects having official allocations of SUI token rewards. This incentive mechanism promotes the development of the Sui ecosystem, which in turn drives the price of SUI upward, creating a virtuous cycle. Here are the development statuses of several major DeFi projects within the Sui ecosystem:

NAVI Protocol

NAVI is a lending protocol that has seen a 208% increase in TVL over the past month. Deposits and loans of SUI, USDC, and USDT are incentivized, with deposit interest rates exceeding borrowing interest rates, allowing for arbitrage through circular lending. NAVI is expected to issue governance tokens in the first or second quarter of 2024, and there may be a chance to receive airdrops by using the platform now.

Cetus

Cetus is the largest DEX on Sui, consistently holding the top position in Sui's TVL rankings. It has a close relationship with Sui officials, such as co-hosting events like the Sui Liquidity Staking Hackathon. During periods of high market volatility, trading pairs on Cetus can generate substantial yields, with the total APR for the SUI-USDC trading pair exceeding 600%. However, it is important to note that Cetus uses a concentrated liquidity model, and non-stablecoin pairs may face significant impermanent loss.

Scallop

Scallop is another lending protocol where users can earn SUI token rewards through a multi-party joint funding incentive program. Users can deposit funds into Lending Pools and then stake them into sCoin Pools, or engage in circular lending, with an APR of about 20% for SUI, USDC, and USDT. Scallop has not yet launched its own governance token.

DeepBook

DeepBook is an order book DEX built by the Sui Foundation and the MovEx team, which other Decentralized Finance protocols can integrate its liquidity. As a public infrastructure, DeepBook may not issue additional governance tokens.

FlowX Finance

FlowX is a DEX with a continuously growing TVL. Providing liquidity can earn SUI token rewards, and the APR for stablecoin trading pairs USDC/USDT can reach 36%. FlowX has distributed some tokens through activities such as the Genesis Farm program, and regular liquidity mining activities may be starting soon.

Aftermath Finance

Aftermath provides LST, AMM DEX, and trading aggregator services. Its LST is afSUI, with the main liquidity coming from the afSUI/SUI trading pair. Only 4 liquidity pools are incentivized, with additional incentives coming entirely from SUI tokens, and the APR for stablecoin trading pairs is 28.13%.

KriyaDEX

KriyaDEX is a spot and perpetual contract DEX, with the perpetual contract feature still in testing. Its main feature is that it allows users to lock liquidity, with a higher APR for longer lock-in times. For example, the APR for the wUSDC/wUSDT trading pair ranges from 11.06% to 40.94%, with rewards coming from SUI.

Overall, the projects leading in TVL within the Sui ecosystem are mainly concentrated in three categories: liquid staking, lending, and DEX. Liquid staking projects can obtain additional liquidity provided by Sui, with various DEXs offering an APR of around 30%; lending projects like NAVI Protocol and Omni BTC have seen rapid growth recently, with TVL increasing by over 200% in a month, and there are expectations for airdrops; DEX projects are steadily developing, with Cetus still maintaining its industry-leading position.