Uniswap

DeFi

<h4>As more people join DeFi, the benefits for <a href="https://www.techopedia.com/definition/liquidity-provider" target="_blank" rel="noopener">liquidity providers </a>(LPs) are higher. These benefits for LPs are usually in the form of yields. Sui DeFi protocols offer 20–40% returns, a fair investment for investors.</h4> 
There are a lot of financial products and services available on Sui.&nbsp; Let’s look into these products and services. This is the second part of this article. Here is the <a href="https://www.altcoinbuzz.io/bitcoin-and-crypto-guide/suis-first-state-of-sui-defi-report-part-1/" target="_blank" rel="noopener">first part</a>. 
<h5>Lending Protocols</h5> 
Lending protocols are the means through which you can borrow money from <a href="https://www.altcoinbuzz.io/?s=liquidity+pools" target="_blank" rel="noopener">liquidity pools</a>. Liquidity pools are not actual pools but systems that hold extra cash for your use. So, if you need liquidity (extra money), you can get it from liquidity pools. 
Using lending protocols, you borrow the amount you want from the pools. If you meet specific criteria, you can borrow money from liquidity pools. Here is a review of Suilend, one of the best Sui lending protocols. 
<img decoding="async" class="wp-image-144987 aligncenter" src="https://www.altcoinbuzz.io/wp-content/uploads/2024/07/vcxfdggfdhgf-300x278.jpg" alt="" width="509" height="472" srcset="https://www.altcoinbuzz.io/wp-content/uploads/2024/07/vcxfdggfdhgf-300x278.jpg 300w, https://www.altcoinbuzz.io/wp-content/uploads/2024/07/vcxfdggfdhgf.jpg 391w" sizes="(max-width: 509px) 100vw, 509px"> 
<h6 style="text-align: center;">Source: <a href="https://x.com/BL0CKRUNNER/status/1807347542914392132" target="_blank" rel="noopener">X</a></h6> 
<h5>DEX Pools</h5> 
DEX pools involve trading between decentralized exchange pools to create liquidity. 
In traditional yield farming, higher yields involve increased risks. But, in Sui, using liquid staking protocols with around 3-4% yields on SUI tokens is safer. In the thread below, you’ll discover how easy is to use liquid staking in Sui wallet. 
<img decoding="async" class="wp-image-144988 aligncenter" src="https://www.altcoinbuzz.io/wp-content/uploads/2024/07/vxcfggfhjhg-215x300.jpg" alt="" width="370" height="516" srcset="https://www.altcoinbuzz.io/wp-content/uploads/2024/07/vxcfggfhjhg-215x300.jpg 215w, https://www.altcoinbuzz.io/wp-content/uploads/2024/07/vxcfggfhjhg-301x420.jpg 301w, https://www.altcoinbuzz.io/wp-content/uploads/2024/07/vxcfggfhjhg.jpg 393w" sizes="(max-width: 370px) 100vw, 370px"> 
<h5>Learning about the Application of DeFi in Sui</h5> 
<ul> 
 <li>Liquidity Staking</li> 
</ul> 
<a href="https://chain.link/education-hub/what-is-staking-crypto" target="_blank" rel="noopener">Staking</a> is the means through which a <a href="https://www.investopedia.com/terms/p/proof-stake-pos.asp" target="_blank" rel="noopener">POS blockchain </a>functions. Blockchains that use the POS mechanism function well because of staking. So, how does it work? Stakers ensures transaction validation, allowing validators to do their work and receive payment. So, <a href="https://www.coingecko.com/en/coins/sui" target="_blank" rel="noopener">$SUI token</a> holders can stake them on Sui and receive a staking reward of 3.5% every year. 
Liquid staking provides users <a href="https://www.bitcoin.com/get-started/what-is-a-liquid-staking-token/" target="_blank" rel="noopener">LSTs</a> such as HaSUI, vSUI, and afSUI in return for staked SUI tokens. Such LSTs are helpful in other DeFi operations. For example, you staked cash and now need to do other DeFi-related actions. You can do so using LSTs. LSTs are tokens in the liquid state one receives in exchange for the underlying assets they staked. Here is an example: 
<img decoding="async" class="wp-image-144990 aligncenter" src="https://www.altcoinbuzz.io/wp-content/uploads/2024/07/vxcfdgferre-243x300.jpg" alt="" width="449" height="554" srcset="https://www.altcoinbuzz.io/wp-content/uploads/2024/07/vxcfdgferre-243x300.jpg 243w, https://www.altcoinbuzz.io/wp-content/uploads/2024/07/vxcfdgferre-340x420.jpg 340w, https://www.altcoinbuzz.io/wp-content/uploads/2024/07/vxcfdgferre-324x400.jpg 324w, https://www.altcoinbuzz.io/wp-content/uploads/2024/07/vxcfdgferre.jpg 391w" sizes="(max-width: 449px) 100vw, 449px"> 
<h6 style="text-align: center;">Source: <a href="https://x.com/volo_sui/status/1805590426478432507" target="_blank" rel="noopener">X</a></h6> 
<ul> 
 <li>Decentralized Exchanges (DEXs)</li> 
</ul> 
<a href="https://chain.link/education-hub/what-is-decentralized-exchange-dex" target="_blank" rel="noopener">DEXs</a> are critical components of Decentralized finance. DEXs let you swap on-chain tokens at any given time. It runs round the clock. 
Many DEXs use the <a href="https://chain.link/education-hub/what-is-an-automated-market-maker-amm" target="_blank" rel="noopener">AMM</a> model to integrate trading through liquidity pools. Liquidity providers lock up an equal amount of two assets into these pools. When they do this, they receive transaction fees as rewards. So, what’s the risk involved in this? 
<img decoding="async" class="wp-image-144991 aligncenter" src="https://www.altcoinbuzz.io/wp-content/uploads/2024/07/vxcfdghgfyjytj-203x300.jpg" alt="" width="408" height="603" srcset="https://www.altcoinbuzz.io/wp-content/uploads/2024/07/vxcfdghgfyjytj-203x300.jpg 203w, https://www.altcoinbuzz.io/wp-content/uploads/2024/07/vxcfdghgfyjytj-284x420.jpg 284w, https://www.altcoinbuzz.io/wp-content/uploads/2024/07/vxcfdghgfyjytj.jpg 391w" sizes="(max-width: 408px) 100vw, 408px"> 
<h6 style="text-align: center;">Source: <a href="https://x.com/swiftott/status/1808151395453096361" target="_blank" rel="noopener">X</a></h6> 
<h5>Key Risks</h5> 
<ul> 
 <li>Impermanent Loss</li> 
</ul> 
If, for instance, the value of the deposited assets changes, it is an <a href="https://tangem.com/en/blog/post/impermanent-loss/#" target="_blank" rel="noopener">impermanent loss</a>. If the asset price falls, the liquidity provider might profit less than if they held the assets differently. 
<ul> 
 <li>Trading Volume and Liquidity</li> 
</ul> 
Having high liquidity in a pool reduces slippage and makes trading easier. Models such as Uniswap V3 increase capital efficiency. It enables LPs to divide capital within a certain price level to cut slippage. 
Notable decentralized exchanges (DEXs) on Sui include Cetus and Turbos based on the Uniswap V3 protocol. We also have Kriya and FlowX based on Uniswap V2. 
DeepBook is also on the list as an on-chain <a href="https://www.nasdaq.com/articles/demystifying-the-central-limit-order-book-clob-everything-you-need-to-know" target="_blank" rel="noopener">central limit order book</a> (CLOB). One feature of <a href="https://x.com/deepbookonsui?s=21" target="_blank" rel="noopener">DeepBook</a> that stands out is the comprehensive <a href="https://www.babypips.com/crypto/glossary/on-chain" target="_blank" rel="noopener">on-chain trading </a>activities in the platform. 
<img decoding="async" class="wp-image-144993 aligncenter" src="https://www.altcoinbuzz.io/wp-content/uploads/2024/07/vxcggffgg-216x300.jpg" alt="" width="390" height="542" srcset="https://www.altcoinbuzz.io/wp-content/uploads/2024/07/vxcggffgg-216x300.jpg 216w, https://www.altcoinbuzz.io/wp-content/uploads/2024/07/vxcggffgg-303x420.jpg 303w, https://www.altcoinbuzz.io/wp-content/uploads/2024/07/vxcggffgg.jpg 391w" sizes="(max-width: 390px) 100vw, 390px"> 
<h6 style="text-align: center;">Source: <a href="https://x.com/matteodotsui/status/1787035807364038899" target="_blank" rel="noopener">X</a></h6> 
<ul> 
 <li>Lending Protocols</li> 
</ul> 
The lending protocols on Sui are the real deal. Lending protocols enable you to lend your assets for a yield. You can also borrow assets by posting collateral. There are some lending protocols we should look into.&nbsp; They are: 
<ul> 
 <li style="list-style-type: none;"> 
 <ul> 
 <li>Navi and SuiLend</li> 
 </ul> </li> 
</ul> 
Here, lenders can use their initial deposits as collateral to borrow other assets. It’s going to the bank with your collateral while requesting extra cash. 
<ul> 
 <li style="list-style-type: none;"> 
 <ul> 
 <li>Scallop</li> 
 </ul> </li> 
</ul> 
With Scallop, the borrowing pool differs from the lending pools that need much collateral. 
<ul> 
 <li style="list-style-type: none;"> 
 <ul> 
 <li>Bucket</li> 
 </ul> </li> 
</ul> 
The bucket is a <a href="https://www.forbes.com/digital-assets/assets/bucket-protocol-buck-stablecoin-buck/" target="_blank" rel="noopener">CDP</a> protocol that allows you to mint stablecoins. They mint stablecoins by collateralizing existing assets. Minting stablecoins sounds nice because stablecoins do not depreciate. Stablecoin BUCK is helpful in some DeFi and gaming applications. 
<img decoding="async" class="wp-image-144994 aligncenter" src="https://www.altcoinbuzz.io/wp-content/uploads/2024/07/xvcdfgfhf-200x300.jpg" alt="" width="408" height="613" srcset="https://www.altcoinbuzz.io/wp-content/uploads/2024/07/xvcdfgfhf-200x300.jpg 200w, https://www.altcoinbuzz.io/wp-content/uploads/2024/07/xvcdfgfhf-280x420.jpg 280w, https://www.altcoinbuzz.io/wp-content/uploads/2024/07/xvcdfgfhf.jpg 391w" sizes="(max-width: 408px) 100vw, 408px"> 
<h6 style="text-align: center;">Source: <a href="https://x.com/navi_protocol/status/1807802214787768721" target="_blank" rel="noopener">X</a></h6> 
<h5>Derivatives</h5> 
The <a href="https://www.investopedia.com/terms/d/derivative.asp" target="_blank" rel="noopener">derivatives</a> on Sui are gaining traction because of their efficiency. <a href="https://learn.bluefin.io/bluefin/" target="_blank" rel="noopener">BlueFin</a> is offering perpetual exchanges, and <a href="https://sui.directory/project/typus-finance/" target="_blank" rel="noopener">Typus</a> is building options vaults. They allow traders to hedge their positions or leverage their trades. But here’s the thing: they are more valuable to seasoned pro traders based on their complex nature. 
<h5>Types of Derivatives</h5> 
<ul> 
 <li>Perpetual Exchanges</li> 
</ul> 
Perpetual exchanges allow traders to open leveraged positions based on their market views. 
<ul> 
 <li> Option Vaults</li> 
</ul> 
Option vaults assist in managing spot positions or increasing returns. 
<img decoding="async" class="wp-image-144995 aligncenter" src="https://www.altcoinbuzz.io/wp-content/uploads/2024/07/xcvbghg-242x300.jpg" alt="" width="405" height="502" srcset="https://www.altcoinbuzz.io/wp-content/uploads/2024/07/xcvbghg-242x300.jpg 242w, https://www.altcoinbuzz.io/wp-content/uploads/2024/07/xcvbghg-339x420.jpg 339w, https://www.altcoinbuzz.io/wp-content/uploads/2024/07/xcvbghg.jpg 391w" sizes="(max-width: 405px) 100vw, 405px"> 
<h6 style="text-align: center;">Source: <a href="https://x.com/bluefinapp/status/1808448700324438288" target="_blank" rel="noopener">X</a></h6> 
<h5>Conclusion</h5> 
Sui continues to grow its core. It provides yield, trading, and asset management options for traders. It is a good platform for liquidity staking and lending protocols. Sui’s DEXs are also efficient with operation and customer satisfaction. 
Are you a seasoned trader or a beginner? Sui’s DeFi protocols offer something for everyone. 
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<h6>Disclaimer</h6> 
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd. 
The post <a href="https://www.altcoinbuzz.io/bitcoin-and-crypto-guide/suis-first-state-of-sui-defi-report-part-2/">Sui’s First ‘State Of Sui DeFi’ Report – Part 2</a> appeared first on <a href="https://www.altcoinbuzz.io">Altcoin Buzz</a>.

Sui’s First ‘State Of Sui DeFi’ Report – Part 2

Altcoin Buzz

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