Overview of Sui Network Perp DEX: What are the differences among the four major protocols?

Attracting traders to the Perp DEX on the Sui network may require more than just technological innovation; an attractive incentive mechanism might be the key.

Written by: 0xShinChan, Crypto KOL

Compiled by: Felix, PANews

The post-FTX era has completely changed the trading landscape, driving a large number of users towards decentralized perpetual contract exchanges (Perp DEX). The daily trading volume on these platforms now often exceeds $30 billion, which indicates a huge demand from users for decentralized derivatives.

However, the fragmented characteristics of early Perp DEX were often affected by the usability of UI/UX, liquidity depth, and the reliability of price feeds, hindering their widespread application. Starting in 2024, the market landscape began to change, marked by the emergence of innovative models such as GMX PVP and dYdX order books. Today, lending, DEX, and yield trading protocol teams on the Sui Network are enriching their product lines, including perpetual contract trading.

Advantages of Sui in Perp DEX

Sui actually offers several compelling features that make it a strong competitor for building perpetual DEX.

• High performance and low latency: Sui’s parallel transaction processing enables high throughput and low latency, which is essential for efficient order matching and a smooth trading experience on DEX.
• Object-Centric Data Model: Sui’s unique data model supports efficient storage and parallel processing of account and asset data.
• zkLogin provides seamless onboarding: The zkLogin feature simplifies the onboarding process for users, allowing them to create accounts using familiar Web2 credentials, reducing the barriers to entry for new traders.

Sponsored Trading: Sui’s sponsored trading feature can reduce user costs and enhance the overall trading experience.

The following are the early builders of Sui:

• Bluefin
• Astros powered by NAVI Protocol
• Aftermath Finance
• Typus Finance GLP Trading Model

Kriya is also about to launch its Perp DEX.

Here is an overall comparison table before delving into each one.

The following will compare and study various protocols, analyzing their trading characteristics, protocol mechanisms, and performance.

Bluefin

Bluefin, as a well-established Perp DEX on Sui, combines a fast-matching off-chain order book with a secure on-chain settlement engine. The protocol’s liquidity is managed by professional market makers (MM):

Leveraging Sui’s parallel transaction processing capabilities, Bluefin boasts extremely low order execution latency and rapid on-chain finality (under 500 milliseconds). Additionally, it supports nearly all perpetual contract assets on Sui, covering a wide range, including $DEEP, $WAL, and $TRUMP.

• The Bluefin platform’s 24-hour perpetual contract trading volume ranges between 40 million and 70 million USD, indicating a high level of trading activity on the platform.
• The BTC-PERP trading pair usually accounts for the largest share of daily trading volume (about 60%), followed by SUI-PERP and ETH-PERP.
• According to Defi Llama data, the annual fees generated are approximately 4 million dollars.

The UI/UX is excellent. Users can use the trading view feature, which has a clear interface and contains all the content they need. It’s worth mentioning that Bluefin’s zkLogin integration is powered by Sui. This simplifies the user onboarding process and eliminates the complexity of wallets and seed phrases.

Aftermath (Testnet)

Aftermath will launch its Perp DEX testnet for the first time in November 2024. It operates entirely on-chain, unlike many Perp DEXs that rely on off-chain order book matching, Aftermath puts the entire order book on-chain. As it is still in the testnet phase, the statistics are limited.

Aftermath focuses more on enhancing the liquidity / TVL of its DEX and existing liquidity pools. Potential future incentives / The formal release of Perp DEX may take place later.

Astros (Test Version)

Astros is a DEX aggregator + Perp DEX developed by the NAVI Protocol team. Like Bluefin and Aftermath, NAVI Protocol also uses an order book mechanism in its Perp DEX. Since it is currently in the testing phase, information and specific mechanisms regarding the collaborating market maker (MM) are not yet detailed. Its 24-hour trading volume reaches 300 million USD, which may be driven by its ongoing trader incentive program.

Typus Perp

Typus Finance launched its GMX-style Perp DEX about two weeks ago. According to Defi Llama data, the 24-hour trading volume is approximately $200,000, and the TVL of the TLP pool exceeds $700,000.

The assets in the TLP pool include $SUI, $USDC, $DEEP, and $LBTC, with an APR currently exceeding 100%.

Some Observations and Conclusions

The Rise of Order Books: The Perp DEX ecosystem of Sui currently clearly favors the order book model, a phenomenon reflected both in the design choices of the protocol and in its dominant position in trading volume. This indicates that the order book mechanism either has inherent applicability within Sui’s architecture or has gained market recognition from its user base.

Asset Scarcity and the Temptation of Memes: The range of assets supported by the Sui Network Perp DEX is clearly limited, which represents a potential opportunity. If a protocol can quickly embrace the highly volatile but profitable memecoin trading space (a sector that has a developing cultural foundation on Sui), then leveraging the inherent speculative nature of these assets could drive an increase in platform trading volume.

The necessity of the initial stage and incentive mechanisms: Compared to the mature and highly liquid Perp DEX ecosystem on EVM and Solana, Sui’s cumulative trading volume and TVL are still in the initial stage. Given the existing feature sets and available functionalities of these alternative chains, attracting traders to switch to the Perp DEX on the Sui network may require more than just technical innovations; an attractive incentive mechanism might be the key factor in attracting speculative capital and promoting significant growth in the Perp DEX ecosystem.