DeepBook: The Ultimate Liquidity Engine for Web3
What is DeepBook?
Think "on-chain order book meets centralized-exchange performance." Instead of an off-chain matching engine or typical AMM, DeepBook gives you a fully on-chain, central limit order book (CLOB) where anyone (yes, anyone) can create new pairs, provide liquidity, and trade with near-instant finality.
The result?
Trading on Sui that’s rivaling the speed, tight spreads, and liquidity experience of a Binance or Coinbase, without ever ceding self-custody.
The Rise of On-Chain Trading
If you’ve been paying attention to the crypto market since 2023, you’ll have noticed one unmistakable trend: on-chain trading is on a serious upswing.
Back in early 2023, decentralized exchanges (DEXs) handled barely 9–10% of total spot volume.
Fast-forward to early 2025, and that share has jumped to around 15–20%. A historic shift that’s reshaping how new tokens launch and how price discovery happens.
We’re seeing tokens rocket to multi-billion-dollar valuations before they ever set foot on a centralized exchange.
In some cases, like $TRUMP, which hit a mind-boggling $14.5 billion market cap within 48 hours, trading stayed almost entirely on-chain.
That means the first spark, the early hype, and the biggest gains are all happening on DEXs.
So why is this happening?
In 2022–2023, a string of CEX missteps, ranging from withdrawal freezes to full-blown collapses soured public sentiment toward centralized intermediaries. At the same time on-chain trading hit a new level of maturity.
All of this added up to a big shift in sentiment:
Events like FTX’s collapse convinced many that holding their own private keys is the safer bet. People realized they don’t need permission from a centralized gatekeeper to trade or list a new token.
As wallets and dApps became more user-friendly, traders found it less intimidating to hop on-chain.
It’s no longer the “Wild West,” but a dynamic and modern financial arena with high-speed trades and lower risk of custodian failure.
Plus, new-gen high-throughput blockchains like Sui started offering low-latency environments and cheap gas.
This makes it feasible for professional market makers to update orders as quickly as they do on a CEX, run tight spreads, and still profit.
Given this backdrop, one question naturally arises.
If the future is heading toward most assets (crypto or otherwise) existing on-chain, doesn’t it make sense for most of the trading to move on-chain, too?
But here’s the thing: not all on-chain models are equally equipped to deliver the best possible price discovery, tight spreads, and familiar trading workflows.
So that brings us to a critical piece of the puzzle: The need for fully on-chain central limit order books (CLOBs).
Something traditional finance has relied on for decades, but which is only now getting real traction in the Web3 world.
This is Why a Central Limit Order Book Matters
A CLOB has long been the gold standard in traditional finance. Major stock exchanges like the NYSE and NASDAQ rely on it to match billions of dollars of orders each day.
The premise is straightforward: traders place bids and asks into a shared order book, liquidity providers compete to capture small spreads, and everyone enjoys relatively tight pricing and minimal slippage.
For high-volume venues, the CLOB model is tried-and-true: it offers the most direct price discovery, with clear visibility into how bids and asks shift in real time.
When AMMs (Automated Market Makers) burst onto the scene in DeFi, they solved an enormous bootstrapping issue: letting anyone deposit token pairs into a liquidity pool to earn fees.
This democratized market making.
But AMMs aren’t without quirks:
Pool Ratios: Prices rely on a fixed ratio of assets, which can distort heavily during rapid price swings.
Impermanent Loss: Liquidity providers risk losing out when the market moves one asset’s price significantly.
Capital Efficiency: Tighter spreads often require huge amounts of locked capital, which might be economically inefficient for larger-scale trading.
For high-frequency, large-order trading, the kind you see on top-tier centralized exchanges, CLOBs remain king.
They’re more capital-efficient for matching big trades, can maintain narrower spreads, and provide that familiar interface many professional and retail traders already know from the traditional finance world.
The challenge has always been how to bring that CLOB reliability on-chain.
Most blockchains are either too slow, making constant order updates impossible, or too expensive in gas fees, so frequent cancellations and placements become unfeasible.
That’s why we’re pushing this idea of an on-chain CLOB with the right infrastructure.
If we can combine sub-second finality, low gas fees, and robust developer support, there’s no reason an on-chain order book can’t go toe-to-toe with any centralized exchange.
And in a landscape where more assets are moving on-chain daily, having a truly decentralized, high-speed order book may be the key to unlocking that next wave of liquidity.
This is Why We Built DeepBook
DeepBook is a fully on-chain CLOB. DeepBook is purpose-built to serve as the foundational liquidity layer for all on-chain assets and financial applications on Sui.
It delivers a high-performance trading infrastructure that any dApp on Sui can seamlessly integrate.
Under the hood, DeepBook operates as a fully on-chain matching engine running on Sui’s high-speed, low-latency architecture.
Each trading pair has its own “Pool” object, a shared on-chain data structure storing the entire order book and vault for active orders.
Thanks to Sui’s parallel execution and fast finality (~390ms on average), DeepBook can settle trades near-instantly.
This design also relies on the BalanceManager module to manage user funds seamlessly.
Whenever a trade executes, tokens are swapped directly via these on-chain vaults, ensuring everything is transparent and verified in a single atomic transaction.
Liquidity itself accumulates through both retail and professional market makers posting orders, leading to tight spreads and ample depth.
There’s no black-box matching engine. No custodial middleman. Just a high-throughput blockchain powering a genuine order book that any DEX or DeFi project can tap into.
Put simply: It’s reminiscent of a major centralized exchange, but everything happens on-chain.
Despite launching relatively recently, DeepBook has already emerged as one of the most successful fully on-chain CLOBs in the industry.
From Launch to Breakout Success
Despite arriving on mainnet relatively recently, DeepBook has rocketed to the forefront as one of the most successful on-chain order books anywhere.
By Q4 2024, the numbers told a striking story:
$1.266 billion in trading volume that quarter alone.
A 443.6% volume increase from the previous quarter.
On normal days, DeepBook processes a steady $10-15 million in 24-hour volume, occasionally spiking above $80 million during high-volatility events.
All told, in under a year, DeepBook handled over $6 billion in cumulative trading.
Liquidity depth has also been a standout, especially on major pairs like SUI/USDC, where spreads often remain just a few basis points wide.
On the fee side, DeepBook has introduced the DEEP token to incentivize liquidity and reward traders. Over 7 million DEEP tokens have already been burned from trading fees.
At the same time, liquidity providers and market makers earn rebates for deepening the order book, creating a self-reinforcing cycle: more fees → better incentives → more liquidity → higher volume.
Beyond the raw numbers, ecosystem growth metrics highlight DeepBook’s central role in Sui’s DeFi landscape.
Combine all this with the fact that 20+ major projects, DEXs, wallets, aggregators, are already integrating DeepBook.
It’s now overwhelmingly clear that DeepBook has already established itself as the go-to exchange venue on Sui.
So, DeepBook has managed to thrive when most on-chain CLOBs fail to sustain liquidity and adoption. The natural question is, what makes it different from the rest?
Why Is DeepBook So Successful?
So why is DeepBook thriving when so many on-chain order books struggle to maintain liquidity and user interest?
It boils down to these factors:
1. Ultra-Low Latency
Most blockchains finalize slowly or risk reorganizations, forcing market makers to widen spreads and wait longer between updates.
Not so on Sui, where blocks finalize in about 390 ms. On Sui there is almost no delay, almost no reorg risk.
That’s a game-changer for pro traders who can replace orders in real time without worrying about chain rollbacks.
It’s the difference between a clunky on-chain environment and something that “feels almost like a CEX”.
Less risk translates to tighter spreads, deeper books, and near-instant confirmations.
2. Minimal Gas Fees
In many on-chain markets, high gas costs or slow confirmations crush high-frequency trading.
DeepBook, on the other hand, charges a fraction of a cent per order update.
That near-zero overhead encourages market makers to refresh quotes constantly and engage in micro-spread strategies once thought impossible on-chain.
Add Sui’s parallel execution, and you’ve got a rapid-fire environment where trades fill fast and spreads remain tight.
Plus, One of the less obvious but potent ways DeepBook gains an edge is through the use of PTBs to handle complex interactions around the order book.
3. Sui’s Programmable Transaction Blocks (PTBs)
One of the less obvious but crucial ways DeepBook gains an edge is by leveraging PTBs to handle complex order book interactions and multi-step operations in a single atomic transaction.
Market makers often maintain dozens, or even hundreds of open orders and need to update them rapidly as market conditions change.
With PTBs, they can bundle multiple order cancellations and placements into a single transaction, executed atomically.
Instead of sending 10 separate transactions to cancel old orders and another 10 to place new ones, a market maker can construct one PTB containing 20 commands.
This drastically reduces overhead and latency for frequent order updates.
PTBs also enable complex, user-level transactions that involve DeepBook alongside other DeFi protocols in a single seamless flow.
A trader could borrow funds, place an order on DeepBook, repay the loan, and claim any arbitrage profit, all in one atomic step.
With DeepBook V3, which introduced support for flash loans, the benefits of PTBs multiply.
Borrowing and repaying within a single transaction eliminates risk to liquidity providers if the user can’t repay, opening the door for arbitrage, aggregator strategies, and other sophisticated DeFi applications natively on Sui.
By using PTBs and Sui’s parallel execution, DeepBook effectively brings high-frequency trading on-chain.
Frequent order churn, large-scale arbitrage, and multi-step DeFi strategies all become cheaper, faster, and more reliable than on many legacy blockchains.
4. High-Speed Development Environment
Sui’s Move language lets the DeepBook team iterate fast. From V2 to V3, DeepBook’s devs cut gas usage by 80%.
They leveraged Sui’s concurrency model to make the matching engine more efficient, allowing more orders and higher throughput without increasing costs.
That synergy between protocol and network means every iteration makes the user experience more fluid.
5. Ecosystem Support
Being woven directly into the Sui ecosystem gives DeepBook a powerful tailwind.
There’s a dedicated community, robust developer resources, and a portion of DEEP tokens (70%+) set aside to incentivize builders and market participants.
All these factors combine to deliver a CEX-like trading environment in a trustless, composable way, something on-chain order books have historically failed to achieve.
Rather than shipping half-baked code, the DeepBook team was able to iterate fast, incorporate user feedback, and become the go-to liquidity hub for the entire Sui network.
With these fundamentals locked in, DeepBook is now gearing up for some major upgrades that promise to shake up on-chain trading even further.
What’s Next for DeepBook
DeepBook is gearing up for an ambitious 3.1 upgrade that will unlock new capabilities and remove friction points for traders, market makers, and dApp builders alike.
The goal is clear: recreate the speed and flexibility of a top-tier centralized exchange, only in a trustless way that any Sui project can hook into.
Here’s what’s on the horizon:
1. Trading Fees in Input Tokens
Right now, if you’re trading on DeepBook, you need DEEP (the native token) on hand to cover taker fees.
That’s not a deal-breaker for power users, but it can trip up newcomers.
The upcoming upgrade fixes that friction:
You’ll be able to pay fees in whatever asset you’re selling (the “input token”). If you’re selling SUI, the protocol simply deducts a small cut in SUI. No extra steps.
This drastically lowers user friction, because you no longer have to acquire DEEP ahead of time.
It also invites more mainstream traders, who expect fees to come out of the transaction itself. It's very similar to the way a centralized exchange might deduct fees from your trade proceeds.
Under the hood, DeepBook will still handle the math of converting or allocating fees in DEEP if needed, but from the user’s perspective it becomes “plug in Token A, get out Token B, fees automatically handled.”
2. Permissionless Pool Creation
When Uniswap first let anyone list a new token pair, it kickstarted a revolution in DeFi.
Now, DeepBook is applying that same permissionless ethos to a fully on-chain CLOB, something practically unheard of.
This feature means a game developer creating a new in-game token, or a DeFi project launching a brand-new asset, can immediately create a spot market on DeepBook. No waiting for approvals or liquidity partnership deals.
By removing top-down listing controls, DeepBook aims to be the de facto “universal exchange” for anything launching on Sui.
3. Enhanced Composability (Balance Manager Upgrades)
DeepBook’s Balance Manager is the behind-the-scenes module that handles user funds for trading.
With the new upgrade, it becomes significantly more composable for outside protocols.
Imagine a margin-trading platform, a derivatives dApp, or even a specialized aggregator plugging straight into DeepBook’s liquidity engine, it’s super powerful
Sui’s concurrency model and object-based design mean protocols can seamlessly read and write to these “BalanceManager” objects.
This enables advanced features like perps or margin lending to exist natively on top of DeepBook’s spot markets.
If you’ve ever used something like dYdX or GMX on other chains, think of that experience, but now fully integrated into Sui with sub-second finality and real on-chain order books.
4. Vault-Based Market Making
Finally, the upgrade paves the way for “passive liquidity” protocols like Lotus.
Instead of a single professional market maker posting orders 24/7, an entire community can pool funds into a vault that places orders algorithmically on DeepBook’s order book.
This approach “democratizes market making”, so everyday users can earn a slice of the fees.
A vault can continuously refresh orders, manage inventory, and track price movements. This similar to how an AMM invests user deposits, only now in a CLOB environment.
The net effect: deeper order books, tighter spreads, and a more stable liquidity base that scales beyond a few big market makers
It also means newly launched tokens can kickstart their trading pairs by tapping these vaults for consistent buy/sell quotes. This is a crucial ingredient for a robust market.
Put all of this together, and DeepBook is heading toward a “universal liquidity layer” that can handle almost any asset or trading style on Sui.
Even in its current form, it’s already pulling in strong volumes from serious traders and experimental dApps.
But with permissionless listing, a frictionless fee model, and automated liquidity vaults, DeepBook aims to remove what little friction remains.
That brings us to one of the most exciting use cases on the horizon: Gaming.
Gaming: A New Frontier for DeepBook
One of the most exciting frontiers for DeepBook is Gaming.
Imagine a popular mobile or console title with its own in-game currency, call it “Gems.” Instead of getting stuck in a walled garden or relying on a slow, illiquid AMM pool, the developer can spin up a Gems–USDC market on DeepBook permissionlessly.
No exchange listing required, no dealing with a third-party gatekeeper.
If that frictionless approach becomes standard, entire in-game economies could flourish, with real-time order books for in-game assets.
That’s a massive differentiator from the typical ‘we have an in-game token but nowhere to trade it’ problem”.
It’s a total game changer. And that’s crucial because Sui is on the brink of a major gaming explosion.
Especially with the launch of SuiPlay 0x1, a handheld device running an Playtron OS that integrates Sui right at the system level.
Imagine an ecosystem where both Web2 titles and native Web3 games run side by side, with a self-custodial Sui wallet under the hood.
In that world, DeepBook is the “universal order book” that any game can rely on for secure, near-instant token trading.
We’re talking about bridging over assets from old-school PC games, or minted NFTs from brand-new AAA blockchain titles, all set to trade permissionlessly on-chain.
It’s the recipe for truly open, in-game economies, something that traditional gaming studios have tried to deliver for years, but never had the trustless infrastructure to pull off.
Which brings us to the bigger picture: DeepBook doesn’t want to stop at gaming tokens or typical DeFi. The grand vision is to become the liquidity layer for anything that belongs on-chain.
The Grand Vision: Become The Universal Liquidity Layer for Everything On-Chain
The ultimate North Star for DeepBook is to offer a universal liquidity backbone for everything from cross-chain crypto to real-world financial instruments.
Because if market participants can instantly trade across multiple blockchains (or across entire real-world industries) without leaving one consolidated order book.
With DeepBook you effectively have a global exchange that can outperform most centralized venues.
Sui native projects like @ikadotxyz are a major step in that direction.
You will soon be able to bring native BTC or ETH directly into Sui. There is no need for centralized bridging solutions or “wrapped” tokens.
Once these assets land on Sui, they can be permissionlessly listed on DeepBook.
This will create a broader catalog than any centralized exchange (which often faces regional regulations and listing gatekeepers).
So the first big leap is cross-chain expansions for all sorts of bridged tokens, but the endgame is much larger.
The Endgame: “Trade Everything on DeepBook”
The first practical milestone is cross-chain expansion to incorporate more exotic or bridged tokens.
Over time, as regulatory frameworks adapt, we could see legitimate real-world securities migrating on-chain.
We see a massive opportunity with tokenized real-world assets. Equities, bonds, commodities, you name it.
As these instruments migrate on-chain (whether through corporate initiatives or regulatory green lights), DeepBook will evolve as the premier spot market for them.
With real-time on-chain order books, you could see price discovery that rivals or even surpasses traditional financial venues.
Imagine running full-blown securities trading or bond markets via a decentralized CLOB that’s as fast and user-friendly as a mainstream exchange, but with the added perks of self-custody, permissionless listing, and universal accessibility.
That’s the endgame for DeepBook.
Of course, it's a huge undertaking. The right market makers, trustless bridging solutions, and optimal user demand are all pieces of the puzzle.
But we’re confident that Sui’s speed and scalability, paired with what we’re cooking for DeepBook, can eventually shape it into a one-stop, on-chain exchange. A decentralized and permissionless protocol that can genuinely threaten the “centralization advantage” that current large CEXs enjoy.
Is it ambitious? Absolutely.
But the data so far suggests that the long-term trend is on our side.
Adeniyi you are so locked in—it’s a treat to see! Thanks for this read. Extremely informative. I’m going to pac-man a fat stack of $DEEP now 🤑
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