DeepBook (DEEP) Tokenomics

The DeepBook Protocol, operating on the Sui blockchain, introduced its native token, DEEP, with the launch of DeepBook v3 in October 2024. The protocol is designed as a decentralized, on-chain central limit order book (CLOB) and aims to serve as the liquidity backbone for Sui’s DeFi ecosystem. Below is a comprehensive breakdown of the DEEP token’s economics, including issuance, allocation, usage, incentives, locking, and unlocking mechanisms.

Issuance Mechanism

• Token Name: DEEP
• Total Supply: 10,000,000,000 DEEP
• Initial Distribution: The DEEP token was launched with allocations to DBClaimNFT holders and participants in the v3 testing phase. The token is available on both centralized and decentralized exchanges.
• Ongoing Issuance: There is no evidence of ongoing inflationary issuance; the supply appears fixed at launch.

Allocation Mechanism

While a detailed allocation table is not available in the public datasets, the following allocations are confirmed:

For the most up-to-date and granular allocation breakdown, refer to the DeepBook whitepaper.

Usage and Incentive Mechanism

• Trading Fees: DEEP is used to pay trading fees on DeepBook. Staking DEEP can reduce taker fees to as low as 0.25 bps (stable pairs) and 2.5 bps (volatile pairs).
• Staking Incentives:
  • Takers: Staked DEEP reduces trading fees.
  • Makers: Staked DEEP earns rebates based on maker volume.
• Governance: Future upgrades will allow DEEP holders to participate in protocol governance, though as of the latest update, no active governance process is in place.
• Liquidity Incentives: The protocol incentivizes both liquidity providers (makers) and active traders (takers) through a volume-based fee and rebate structure.

Locking Mechanism

• Staking: Users can stake DEEP to access fee reductions and maker rebates.
• No Explicit Lockups: There is no evidence of mandatory lockups or vesting for the majority of circulating tokens, except for possible allocations to team or contributors, which are not detailed in public datasets.
• Governance Locking (Planned): Future governance may introduce locking for voting power, but this is not yet implemented.

Unlocking Time

• Initial Unlock: Tokens for DBClaimNFT holders and v3 testers were claimable at launch (October 2024).
• No Public Vesting Schedule: There is no detailed public vesting or unlock schedule for team, foundation, or ecosystem allocations as of the latest available data.
• Future Unlocks: Any future unlocks or vesting would likely be disclosed in protocol updates or governance proposals.

Summary Table

Additional Resources

• DeepBook Whitepaper (PDF)
• Official Documentation
• DEEP Token Governance Blog

Analysis and Implications

• Efficiency and Incentives: The DEEP token model is designed to reward both liquidity providers and active traders, aligning incentives for deep, efficient markets.
• Decentralization Roadmap: While governance is not yet live, the protocol’s roadmap includes community-driven upgrades and decision-making.
• Transparency: The lack of a fully public, granular allocation and vesting schedule is a limitation for deep due diligence, though major categories are disclosed.
• Ecosystem Impact: As the foundational liquidity layer for Sui, DeepBook and the DEEP token are positioned to play a central role in the network’s DeFi growth.

Recommendation: For the most current and detailed tokenomics, including any future changes to allocation or unlocking, consult the official DeepBook documentation and whitepaper, and monitor protocol governance channels.