In the newest article by the Sui Ecosystem team, we’d like to cover a fresh protocol being built on Sui right now – Ballast. Seat your belts and let’s dive!
Overview
Ballast is a DeFi infrastructure initiative built on Sui.
Sounds complicated, we agree. Let’s make it simple.
The goal of the protocol is, “to offer a complete trading suite solution on Sui.” It includes:
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AMM & Swap Interface (v1)
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Central Limit Order Book model (v2)
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Spot trading (v2)
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Perpetuals (v3)
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Options (v4)
As you might have noticed, Ballast is going to implement its features in some stages, starting from v1. Let’s cover one by one.
AMM (v1)
AMM on Ballast works using a well-known model – liquidity pools.
Short reminder:
Anyone can become a liquidity provider (LP) for a pool by depositing an equivalent value of each underlying token in return for pool tokens. These tokens track pro rata LP shares of the total reserves, and can be redeemed for the underlying assets at any time.
Liquidity providers earn fees on each trade – 0.25%, while 0.05% goes to the Ballast reserve pool.
Actually, most the functions are pretty similar to the Uniswap V2 approach.
Spot trading + Order book (v2)
Ballast’s main focus is to build the leading AMM first. However, as was said, the final goal is to create an ultimate DeFi solution. Here comes spot DEX with order book implementation.
Simply talking, they’re planning to create a friendly spot DEX with similar to CEX user experience. With this mechanism, users will be able to place on-chain orders as well as perform instant swaps. Actually, it’s more comfortable in relation to trading – you don’t need to rely on centralized exchanges and constantly monitor prices, comparing to a general DEX.
Perpetuals (v3)
Perpetual contracts are extremely popular in the crypto space. Since the success of GMX on Arbitrum, we can definitely say – decentralized platforms allowing user to trade perps are a must. Moreover, since the recent collapse of FTX, users are tending to find the ways for trading and storing their assets other than CEXs.
Plans: support leveraged trading, cash settlements, and multi-collateral features.
Options (v4)
Options in crypto are not as popular as perps at the moment, but we believe it will attract more and more attention as the crypto space evolves.
There isn’t much info about the plans, so we’re just quoting the team:
“The goal of Ballast in terms of options trading is to provide a decentralized platform for their operation and to ensure a convenient and easy-to-use foundational block for well-versed, expert traders and as well as novel traders. Ballast will support partial collaterization for options.”
Summing-up
We have to admit – the project is on its earliest stage. There is no devnet or testnet running at the moment. However, with the recent blog post, we can expect the release of Ballast v1 before the end of 2022. Moreover, there is an incentive for early adopters – check here.
Official resources of Ballast:
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Article prepared by @macevoy_eth – team member of Sui Ecosystem.