DeepBook (DEEP) tokenomics

DeepBook is a permissionless central limit order book (CLOB) built on the Sui network, designed to provide a foundational liquidity layer for the entire Sui ecosystem. Its token economics are integrated with the broader Sui network architecture, utilizing the SUI token for core protocol functions and governance.

Issuance and Allocation Mechanism

The DeepBook protocol was released on July 12, 2023, alongside a dedicated SDK to facilitate developer integration. While specific internal allocation percentages for a native DeepBook token are not detailed in the available data, the protocol's operation is heavily tied to the SUI token's economic structure.

The SUI token itself has a maximum supply cap of 10,000,000,000 (10 billion) tokens. The allocation of SUI tokens is distributed among several key stakeholders to ensure long-term ecosystem sustainability:

Usage and Incentive Mechanism

DeepBook functions as a public utility for the Sui ecosystem, and its incentive structure is designed to encourage the creation of liquidity and trading activity.

• Pool Creation: Users can access DeepBook on Sui to create new trading pools. This action requires a one-time fee of 100 SUI.
• Network Governance: In the future, SUI tokens are intended to be used within the network’s governance model. Validators will possess voting power proportional to the combined number of SUI tokens they have self-staked and those delegated to them. To prevent centralization, this voting power is capped at 10.00% of the total voting power, even if a validator controls a larger portion of the supply.
• Developer Integration: The DeepBook SDK allows protocols to build on top of the CLOB, effectively using it as a shared liquidity source. This creates a network effect where increased developer adoption leads to deeper liquidity and better pricing for end-users.

Locking and Unlocking Mechanism

The locking and unlocking of tokens within the Sui ecosystem (and by extension, DeepBook) follow a structured schedule to manage inflation and align stakeholder interests.

• Staking and Delegation: SUI tokens can be staked with validators to secure the network. While specific "lock-up" periods for DeepBook-specific actions are not explicitly defined beyond the pool creation fee, the broader network employs a delegated proof-of-stake (dPoS) system.
• Vesting Schedules: Early contributors, investors, and the project team are typically subject to vesting schedules. For example, in similar high-scale protocols, these schedules often span 48 to 60 months to ensure a gradual release of tokens into the circulating supply.
• Governance Participation: The voting power of validators is tied directly to the amount of SUI locked in the staking system. This ensures that those with the most influence over the protocol's direction have a long-term economic stake in its success.

Information regarding specific "unlocking times" for DeepBook-specific liquidity incentives or a native protocol token was not available in the provided data. The protocol currently operates primarily through the utility and governance mechanisms of the SUI token.