Sui Network’s ability to support large transaction volumes while maintaining low fees has attracted many developers and users. Currently, it has become the home of one of the quickest-growing DeFi apps.
Scallop, a decentralized finance (DeFi) lending protocol built on Sui, is leveraging the network’s strengths to create a user-friendly platform for borrowing and lending digital assets.
As blockchain networks gain popularity and use, they encounter growing demands for transaction throughput and efficient resource allocation. The current blockchains mostly struggle to handle the increasing transaction volume without having to compromise performance, resulting in higher transaction fees, slower transaction speeds, and possible scalability bottlenecks.
Resolving these scalability issues is important for blockchain to fulfill its potential as a mainstream technology. On that note, scalable blockchains can support lots of applications, attract more users, and power widespread adoption across different sectors. One of them is layer-1 blockchain Sui Network, which strives to simplify Web3 onboarding and address the scalability limitations.
Sui Increases DeFi Presence
Unleashed in May 2023, Sui implements a distinct architecture to achieve high scalability, utilizing horizontal scaling to ensure that the transaction fees remain low even during high demand. The network is capable of processing many transactions simultaneously, achieving immediate finality and security.
One of the quickest-growing DeFi apps that reflect Sui’s efficiency is Scallop, a lending protocol that has expanded to become the leading money market for the Sui network.
The protocol provides an extensive suite for institutional-grade features, including tools for developing Sui Programmable Transaction Blocks (PTxs), Sui Kit for interacting with Sui while using the TypeScript SDK, Scallop SDK for interacting with Scallop, and sCoins (Scallop Market Coins) for zero-cost flash loans.
Scallop is the first DeFi project to be awarded by the Sui Foundation via a grant. It has also acquired different awards from Sui Builder House hackathons. The protocol also secured funds from major institutions and venture capital (VC) firms, such as OtterSec and Comma 3 Ventures.
Users can transfer their digital assets to the Sui network utilizing Scallop’s bridging solution, which consists of Portal Bridge, Wormhole Connect, and Celer Bridge. Furthermore, Scallop provides low transaction fees which makes it an attractive option for users who wish to save money on their decentralized finance (DeFi) transactions.
In 2022, the team behind Scallop went on a quest seeking the perfect blockchain foundation for their lending protocol. Their search led them to the Sui blockchain, which they identified for its exceptional security and composability. Unlike the other blockchains, Sui’s infrastructure allows the smooth incorporation of Scallop into the existing DeFi applications, enabling the developers to create some innovative and interlinked DeFi experiences.
On that note, Sui’s Move smart contract development language, built upon the massive Rust programming language, also solidified its appeal, addressing critical security issues inherent in DeFi smart contracts.
Scallop allows users to borrow and lend major stablecoins, like USDT and USDC, as well as CETUS and SUI. CETUS is the naïve token of Cetus, a Sui-based decentralized exchange (DEX). Through its temporary incentive program mainly funded by the Sui Foundation, Mysten Labs, and Openblock Labs, Scallop rewards lenders and borrowers who get SUI tokens for participating in its ecosystem.
Notably, Scallop values its users and intends to recognize early users and supporters of Scallop with the Scallop token, SCA, which is scheduled to launch in Q1 2024.
Related: MUFEX Revolutionizes DeFi with CEX-Like Trading Experience and Lightning-Fast Order Processing
Increased Adoption
Scallop experienced considerable growth in the last quarter of 2023. As of December 6, its total value locked (TVL) surpassed $40 million, making it the second-biggest DeFi app on the SUI chain after Cetus. The growth marks a considerable increase from September when Scallop’s TVL was less than $4 million.
The upside trend reflects the increasing adoption of Scallop’s lending pools that offer users the chance to earn interest on their crypto holdings or borrow assets for different purposes. The protocol’s primary focus on accessibility, security, and user-friendly interfaces might help contribute to its appeal among SUI users.
Scallop now plans to set the standards for all the lending DeFi platforms on all the chains by focusing on user security and experience. The team, made up of fintech, DeFi, cybersecurity, and quantitative trading experts, strived to build an extensive monetary market leveraging Sui’s composability and security, implementing risk management, and offering continuous user support.
