KuCoin AMA With Cetus Protocol (CETUS) — Pioneer DEX and Concentrated Liquidity Protocol Built on Sui and Aptos
Dear KuCoin Users,
Time: May 9, 2023, 12:00 PM - 1:48 PM (UTC)
Official Website: https://www.cetus.zone/
Whitepaper: Click to view
Vince — Marketing Lead of Cetus Protocol
Q&A from KuCoin
Q: Can you briefly introduce what Cetus is building?
Vince: Cetus is a pioneer DEX and concentrated liquidity protocol focusing on the Move-based blockchains such as Sui and Aptos. The mission of Cetus is to build a powerful and flexible underlying liquidity network to make trading easier for any users and assets.It focuses on delivering the best trading experience and superior liquidity efficiency to DeFi users by building its concentrated liquidity protocol and a series of affiliate functional modules.
The core product of Cetus is its concentrated liquidity market maker, which is very similar to the Uniswap V3 on Ethereum. And the real potential of this classic model has yet to be fully explored on Ethereum.
Compared with traditional AMM DEXes, Cetus can provide much higher capital utilization and better market depth because, in an AMM, liquidity spreads along the full price curve, and it's severely diluted. At the same time, Cetus allows liquidity providers to set their custom price ranges when they add their liquidity. In this way, LPs can concentrate their capital within a range more likely to be utilized by ongoing transactions.
This market-proven model can support the Sui eco growth from day one because it's self-sustainable, without a strong reliance on external resources.
Based on the underlying protocol, a series of affiliate and supplement modules and functions will be offered to Sui ecosystem users one by one by Cetus.
Q: Why did you choose to start building on Sui?
Vince: The reason mainly comes from two aspects: the technical aspect and the ecosystem perspective.
From the technical side, the unique object-oriented design gives Web3 developers the ideal soil to build safe smart contracts and DeFi protocols. The native bytecode verifier Sui offers also helps screen out common vulnerabilities before deploying the code onto the chain. This is very important for all web3 devs.
Also, its parallel consensus mechanisms prevent the potential congestion resulting from the possible surge of transactions like NFT minting. It has different consensus mechanisms for simple and complicated transactions to lower the pressure over the chain.
This is extremely helpful for DeFi builders who want to build high-end strategies and products.
From an ecosystem perspective, the Sui blockchain is highly focused on serving NFT and GameFi projects. The team behind Sui has a strong gene to capture top-class gaming and NFT teams to its ecosystem.
This means a lot in the current market environment. Because before we decide to join a layer1 ecosystem, we want to ensure it can continuously bring new traffic and trending topics.
Traffic means everything in Web3, so we feel happy we made the right decision.
Q: What benefits and values can Cetus bring to the Sui ecosystem?
Vince: Cetus can create various values for different people in this ecosystem.
For LPs, which are the most important role in DeFi, we provide them with superior capital efficiency and liquidity utilization compared with constant product AMMs. As a result, LPs can earn organic transaction fees faster with a relatively small liquidity size.
They also have much higher flexibility to manage their liquidity and design their LP strategies. They can execute different LP solutions by customizing their liquidity position price ranges. They can even apply for support from external tools or plugins to call our service. Those most professional LPs can even design contracts and integrate with us to chase the best trading performance.
Traders can enjoy a much better market depth and low price slippage in CLMM pools because, with the same level of TVL, the liquidity in our CLMM protocol will be more concentrated around the current market price.
For each trading pair, there can be multiple fee tiers routed by our swap router. Different fee-tier pools will show different trading performances under different market conditions. The market and traders will naturally decide which pool is most traded as the market changes continuously.
For developers, they can easily integrate with our SDKs to build their swap interface or serve their product functions. Moreover, developers on Sui can build a different wheel repeatedly. We will offer a ready-to-use plugin to give ease to all subsequent builders on Sui.
Those are the main values we can bring to different people in the eco.
Q: Does Cetus offer any other products or features?
Vince: Another unique feature built by us is our fee-based farming module.
Everyone should already be very familiar with liquidity mining/farming. For example, in constant product AMM (x*y=k model), if a DEX or a token issuer wants to do farming, it has to incentivize every dollar within its pool because all liquidity is equal.
As a result, the cost for DEX or token issuer will be extremely high. And the token-selling pressure will be extremely high as well. So that's what we call the pool2 dilemma. That's also why we saw many big and successful AMM DEXs with very poor token performance on the secondary market. So the TVL they have to incentivize needs to be bigger.
We distribute our farming rewards to LPs on Cetus according to their performance of transaction fees. Therefore, only those LPs whose liquidity handles transactions and generates fee earnings for the pool can receive farming rewards.
The more transaction fees you generate for the pool, the more farming rewards you can get.
In the past, only whale players could get a significant portion from liquidity mining. But now, if you are more professional or diligent in managing your liquidity, you can earn more than others.
Therefore, our farming incentives only go to real contributors with active and effective liquidity. This gives us a more efficient solution to bootstrap the liquidity. Moreover, it can save the cost of both our protocol and those token issuers/project owners, which makes a project sustainable in the long term.
More unique functions and features will be delivered individually based on our CLMM protocol. We'll announce it when it's ready.
Q: In building a more prosperous Sui ecosystem, what do we still need?
Vince: We need the infrastructure on Sui to mature. So it may take some time.
We need powerful lending protocols, liquid staking protocols, and tools for DeFi, NFT, and games, such as mature multi-sig solutions and vesting tools.
We need the DAO governance protocol to be constructed so that the ecosystem can grow towards decentralization for real.
And we still need more liquidity to be bootstrapped to the Sui blockchain. So I'm happy that Wormhole has done much work here but still needs more support.
We need to give users a reason to migrate their assets onto the Sui network. That requires different platforms on Sui to design sustainable and organic incentivization programs to encourage the circulation between off-chain and on-chain ecosystems. In addition, a sufficient liquidity reserve on-chain is the prerequisite for developing and designing subsequent applications.
Besides, we need more builders to feel comfortable building on Sui. The Sui Foundation has done well regarding developer PR and support. From our angle, we'll build a solid liquidity layer and a full toolkit to ease future developers in the Move language and Sui ecosystem.
Everything we are doing right now is to get prepared for the future soar of world-class gaming projects to onboarding with Sui blockchain. Cetus is dedicated to building the underlying liquidity layer for this ecosystem.
Q: Please share your short-term roadmap.
Vince: We'll be super busy in the next few months. The dev contributors behind Cetus have been working 24/7 in the past weeks.
We have a series of important offerings to ecosystem users in the upcoming weeks and months. The first thing will be launching our permissionless pool.
Anybody will be able to create a new market on Cetus in minutes. That will ignite the Sui Summer, and more projects will join Sui soon.
Besides, this is still a very early stage of this ecosystem. However, we see a lot of high-quality and sophisticated project teams that are ready to launch on the mainnet real quickly. As Cetus also has a native launchpad with its DEX, we will help those outstanding projects to conduct their IDO on Cetus.
There are already several candidates waiting in the queue. We'll also design our token utility for attaching it to our launchpad project participation.
Furthermore, we know Sui Foundation will launch its underlying CLOB market Deepbook, a public liquidity module offered by Sui that every developer can utilize. We will aggregate the Deepbook liquidity onto the Cetus liquidity when it's mature to provide the ecosystem users with an upgrade liquidity layer.
The aggregated liquidity pool can handle every order placed on Cetus in the future to give the best price and lowest price slippage to all traders.
Those will be our main directions in the short term, and we know the Web3 market is changing extremely fast. Therefore, we will agilely adjust our plans and roadmap according to the ongoing market changes.
Q: What's your long-term vision for Cetus?
Vince: Based on a user-oriented DEX and liquidity layer, we are not pursuing just being a DEX. We also want to become a fundamental infrastructure builder on Sui and an open-minded ecosystem incubator.
We hope the liquidity layer built by Cetus can one day be utilized by every developer and user on Sui. Furthermore, we hope every transaction on the Sui network in the future will involve Cetus protocol, no matter whether the order or request is placed from the Cetus interface.
Also, we are closely observing the growth and expansion of the MoveVM ecosystem. Cetus can be a crucial part of it.
Free-Ask from KuCoin Community
Q: One of the key features of the Cetus Protocol is its support for cross-chain transactions. How does the protocol ensure the interoperability of different blockchain networks, and what are the technical challenges involved in achieving this? How does the protocol handle the issue of different consensus algorithms and transaction processing speeds across different networks?
Vince: We will not build cross-chain technologies by ourselves. Still, we plan to support cross-chain interoperability in the future, especially given that we want to expand the entire Move ecosystem. Wormhole is one of our very important strategic partners. They will support us in including the best solutions regarding interacting between different Move-based blockchains and make it possible for the multichain circulation of our assets.
Q: I am interested in investing in your project. When and where can I buy your tokens? Is it already listed on exchanges?
Vince: KuCoin just announced its listing announcement for Cetus Protocol. We are honored to be chosen by KuCoin Exchange from such an early time.
Q: Blockchain projects always prioritize security and anonymity in developing project platforms and technologies. So, do you have any technological solutions or plans to enhance user trust in these issues?
Vince: Security is always the top priority in our minds, and it should be for all DeFi builders. Therefore, we made a lot of investments in our smart contract audit and product review. Our protocol is audited by both OtterSec and MoveBit. Both are the leading and the most reputed audit firms in the Move ecosystem. We will continue the investment in security aspects like bug bounties and more to give long-term protection for our product.
Q: What is your strongest advantage that will make your team lead the market?
Vince: Firstly, we have a strong gene in trading. We choose to build a CLMM DEX in this non-EVM layer1 ecosystem. So we know exactly how to contribute to running a DEX and the DeFi scenarios based on it. Secondly, and more importantly, we build our product with a "composability" mindset. DeFi should work and should be built in a composable way. Compared with many other platforms trying to build a closed ecosystem, we want our platform to be more open and inclusive.
Q: How can I stay updated with the Cetus Protocol?
Vince: You can find all our social links on our official website. Indeed, I've seen some fake and counterfeit platforms or community groups trying to scam and phish others in the name of Cetus. Double-check any links with that on our official website before joining any events.
Q: Do the token holders have the right to participate in project governance? For example, what decisions can they vote on about the project?
Vince: Of course, governance right is the most important utility for the token. Users will be able to vote in the near future for major parameter settings of the Cetus protocol, such as the farming emission plan, farming allocation for each pool, and so on.
Q: How do you plan to improve the interaction with new users and users outside the crypto space?
Vince: UX improvement is also one of our main focuses in the next few months. We even scheduled a meeting with a famous UX studio to discuss the possible enhancements we can make to our interface. Of course, as we are still at the very beginning, there might still be some flaws in our front-end design, but we are open to all suggestions we gathered from our community.
Q: What are Cetus Protocol's plans to expand its ecosystem and attract new users?
Vince: We are not only aiming to grow our user base, but we also are striving to help expand the whole Sui ecosystem. That's why we have established connections with the most outstanding teams in this eco and invite them to join forces to build together. We want to bring new traffic and users to Sui and Cetus by providing a full toolbox and solutions for new project teams and builders. So the joint force will be stronger than ours alone.
KuCoin Post AMA Activity — Cetus Protocol (CETUS)
🎁 Participate in the Cetus Protocol AMA quiz now for a chance to win $10 in CETUS!
The form will remain open for five days from publishing this AMA recap.
KuCoin and Cetus Protocol have prepared a total of $2,000 in CETUS to give away to AMA participants.
1. Pre-AMA activity: $400 in CETUS
2. Free-ask section: $50 in CETUS
3. Flash mini-game: $400 in CETUS
4. Post-AMA quiz: $1,150 in CETUS
. . .
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