TL;DR

• Ballast’s leadership team is formed

• Ballast product roadmap is clear

• Ballast’s v1 is ready to launch on devnet

• The BLT token is designed

• Ballast socials are booming!

Forming the dream-team

When the idea of building a DeFi product came to Mark and Silvia’s minds, they knew they had to bring on a handful of the best brains in the industry to make dreams become possible.

Ballast now boasts a top-tier leadership team, with talent from notorious protocols like Uniswap and Balancer as well as OG centralised exchanges such as OKX. In addition to cutting-edge experience, the leadership team also brings names like Pingkan, Accenture and HSBC to the table.

If working in a fast-pace environment alongside an ambitious team sounds like you, please check our open positions here. The list is growing.

Where to start ?

Sui Network’s timeline to main-net gives us the luxury to take a step back and reflect on what financial product is needed on day-1 of launch.

In this first month of operations, the team has laid out 4 versions of Ballast which will become the directory for our product roadmap.

AMM & Swap Interface (v1)

Starting with a Sui DEX ? Yes ! Our AMM is composed of a suite of persistent, non-upgradable smart contracts that together create an automated market maker, a protocol that facilitates peer-to-peer market making and swapping of tokens on the Sui blockchain.

Ballast’s v1 AMM is ready for devnet ! The v1 includes features such as : Swapping Sui tokens and adding & removing liquidity to token pairs.

Read more about Ballast’s v1 AMM here.

Central Limit Order Book model (v2)

Ballast v2 will use a single asset pool, the liquidity of which is sent for market making to the order book. Thus, traders will always have enough liquidity for comfortable trading, and investors can profit from the sophisticated market-making mechanism developed by the Ballast team.

Spot trading (v2.1)

The secondversion of the Ballast spot DEX on Sui is the first order book implementation that supports on-chain order matching and Sui wallet connection. Ballast also provides users with an opportunity to make instant token swaps at the market price in a single click. Ballast boasts lower fees compared to AMMs. On Ballast, for example, on the SUI/USDC market takers pay 0.1% where 0.05% goes to makers and another 0.05% – to the treasury fund. As for USDT/USDC, the taker fee is 0.04% and the maker’s rebate is -0.02%.

Perpetuals (v3)

Ballast v3 will offer a decentralized way to trade perpetual futures contracts meaning that traders have no need to rely on centralized exchanges and trust their funds to a single entity. Instead, funds are stored on users’ wallets e.g. Suiwallet. Ballast’s perpetuals will support leveraged trading, cash settlements, and multi-collateral features.

Options (v4)

The goal of Ballast v4 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.

Crafting BLT’s token design

Designing the token that powers an ecosystem is not a light task, it defines who participates in the ecosystem and how they participate too. We will be publishing an in-depth piece that covers BLT economics, supply and utility in the coming days. As of now you can refer to our documentation.

Getting the word out about Ballast !

Community is key and initial traction can be a deal-breaker for initiatives, internal moral and overall success.

We are genuinely grateful for our early supporters on Twitter, Telegram and hopefully on other social media channels to come! Within 20 days of launching our Twitter page, we have grown exponentially to over 5,000 community members!

Are you an early #BallastSailor ? Don’t worry, it’s worth it ! Read up on how supporting Ballast at this early stage can be rewarding.

What is Move?

Move is an executable language used to implement custom transactions and smart contracts. It takes inspiration from Linear logic to define custom resource types, meaning that a resource can never be copied or discarded, only moved between program storage locations. You can read more about how the language functions here. 

The Architecture

Sui boasts scalability and low-latency by omitting consensus for simpler use cases such as payment transactions and asset transfers. By eliminating the need to achieve total consensus on a total ordered list of transactions, Sui eliminates a bottleneck which is prevalent in most blockchains in today’s time. Sui takes a substantial leap in scalability by enabling parallel agreement on casually independent transactions. Validators commit such transactions using Byzantine Consistent Broadcast, eliminating the need of global consensus without sacrificing the safety and liveness. A list of 20+ potential dapp types that can avoid full consensus is available here.

Sui utilizes move along with a novel data model that applies an object centric view to explicitly encode dependencies. This results in Sui being able to execute transactions on objects in parallel while also executing transactions affecting the shared state via the Byzantine Fault Tolerant (BFT) consensus. In fact, for transactions that specifically require ordering, i.e., some DeFi applications, Sui implements one of the fastest and most scalable mempool and BFT protocols with extra intra-sharding capabilities, called Narwhal and Bullshark.

Sui stores an array of programmable objects, each assigned with a unique global ID. Objects are owned by singular addresses (or other Objects) and every address can own multiple objects. Objects are defined as typed data created and managed by Move Packages (a.k.a. Smart Contracts). Objects are owned by an address at the time of creation and can be frozen or shared to provide accessibility to others. You can read more about Objects here.

Additionally Sui is designed with agility in mind, supporting multiple cryptographic key types, such as EdDSA and ECDSA for user keys and aggregated BLS signatures for validators. Moreover, Sui’s rich cryptography and finance apis, including primitives for DeFi and zero knowledge proofs, NFT and game templates, and examples for marketplaces and social networks, make the smart contract developer and wallet experience seamless.

Sui and Security

Sui promises improved security through the way Move structures smart contracts, while also theoretically improving ease of implementation. “Move’s design prevents issues such as re-entrancy vulnerabilities, poison tokens, and spoofed token approvals that attackers have leveraged to steal millions on other platforms,” Abiodun said. “Its emphasis on safety and expressivity makes it easier for developers to transition from web2 to web3 without understanding the intricacies of the underlying infrastructure.” This sounds similar to the way Dean Tribble of Agoric characterizes its use of hardened JavaScript for smart contracts.

High Performance and Low Latency

One of the core complaints about Ethereum, aside from a hefty fee structure, is that it can’t handle very many transactions per second (tps). I’ve seen numbers quoted in a range of 15-30 tps. Contrast this with the Visa and MasterCard payment networks, which handle something like 1,700 tps. The solution for scaling the processing power of Ethereum has been to use Layer 2 blockchains like Polygon; which, like VISA, claims to be able to process 65,000 tps — although there’s a healthy dose of skepticism about whether this theory plays out in reality.

Sui also touts an extremely high tps throughput, with Abiodun stating, “As of Mar 19, 2022, an unoptimized single-worker Sui authority running on an 8-core M1 Macbook Pro can execute and commit 120,000 token transfer transactions per second.” At almost double the claim by Polygon, I remain skeptical, but this is also where Sui is taking a different approach.

Abiodun claims that Sui’s “system design breakthrough eliminates a critical bottleneck in existing blockchains: the need to achieve global consensus on a total-ordered list of transactions. This computation is wasteful given most transactions are not contending for the same resource against other transactions.” With this unique approach to consensus, the transactions get processed much faster.

Onboarding More Developers to Blockchain

Another parallel I see between Sui and Agoric is in reducing barriers to entry for developers getting started in blockchain. Agoric’s approach to create tools in the most widely used programming language, JavaScript, seems obvious. Sui is betting that Move makes development easy enough that the language doesn’t matter. “This means features like transfer, mint, and burn are already available,” Abiodun said.

Sui says that developers will benefit from:

• Having less code to write (less boilerplate code).

• Less opportunity for making errors on foundational concepts.

• Writing apps without having to understand the underlying infrastructure.

The Sui SDK will be available starting today. Abiodun highlighted that they’ve already worked with a number of partners including Lucky Kat Studios and SoWork. From a press release on Sui, the SoWork team said, “For SoWork specifically, we use Sui to deliver fast, efficient, cost-effective minting of composable, mutable NFTs to our customers, which just isn’t possible with older blockchain technology. One of our favorite use-cases is SoWork’s ‘Teammate Awards’ feature, which lets our workplace customers reward their employees in a fun, engaging manner via mutable NFTs.”

It remains to be seen what Sui adoption looks like in the long run, but it seems like they’ve got the right focus in addressing key developer pain points.

Sui Use Cases

As per Evan Cheng, the CEO of Mysten Labs, current technology suffers from confining storage solutions and inherently unsafe programmability models, which pressure developers to compromise on functionality and user experience. Sui solves the most infamous problem in blockchain by delivering nonpareil scalability, security and a simplified user experience at a low cost. 

The Sui blockchain is designed to handle a diverse set of use cases. Some include: 

• Enabling low latency on-chain trading to facilitate DeFi applications 

• The ability to deploy mass airdrops and loyalty programs

• Widening the asset functionality by implementing transparent game and business logic

• The ability to tokenize asset ownership such as land deeds to medical records

• Develop social media networks by boasting an ability to create media posts and likes with privacy and interoperability in mind

Evan Cheng says that the lack of infrastructure has paralyzed development across the web3 space and Sui will empower builders and collectors to conquer uncharted territory. 

Sui Tokenomics

The Sui ecosystem boasts its native token SUI to perform essential functions on the blockchain. These functionalities include participating in staking, paying for gas fees and to submit or vote on governance proposals. The total supply of SUI tokens is capped at 10,000,000,000 (10 billion) tokens and upon Mainnet launch some tokens will be liquid while the remaining tokens will be vested over the coming years. 

The Sui economic model consists of three main contributors: 

• Users – This category refers to the users who will be conducting transactions on the chain. These transactions may include creating, mutating and transferring assets via smart contracts.

• SUI token holders – Token holders have the ability to delegate their tokens to validators to participate in the proof of stake mechanism and retain the right to participate in on-chain governance. Staking rewards are distributed by the end of each epoch.

• Validators –  Validators manage transaction processing and execution on the Sui blockchain.

Stay tuned for an article on Sui Staking and Tokenomics. 

Sui Governance

Sui governance will manage updates and parameter changes via on-chain voting. The SUI token will enable users to participate in the governance process. More information will be released closer to the Mainnet launch. 

Sui Team

The Sui blockchain is the brainchild of Mysten Labs, a team of leading distributed systems, programming languages, and cryptography experts whose leaders previously headed Meta’s Novi Research. At Novi, they helped develop the Diem Blockchain and Move Programming Language. Mysten Labs is headed by Evan Cheng (Founder and CEO), previously at Meta and Apple, Adeniyi Abiodun (Founder and CPO), ex-Meta, Sam Blackshear (Founder and CTO), ex-Meta, Kostas Chalkias (Founder and Chief Cryptographer), ex-Meta, and George Danezis (Founder and Chief Research Scientist), ex-Meta. 

Mysten Labs raised $300 Million in a Series B funding round that values the company at more than $2 billion. The round was led by Figment Capital, FTX ventures, Binance Labs, Coinbase Ventures, a16z crypto, Jump Crypto and others.

Sui Partners

Sui provides a general purpose platform with high throughput, rich on-chain asset environment and a user-friendly web3 experience. It is designed to view the blockchain experience from the user’s perspective. There are many big names already partnered and building towards a new web3. Some include: 

• Ballast – DeFi infrastructure

• Axelar – Cross-chain communication bridge

• Cramium – NFT distribution service 

• Ethos – Cross-functional wallet 

• Gaggle Studios – Decentralized social gaming 

• Wormhole – Cross-chain asset bridge.

Sui Roadmap

Mysten Labs published the Sui white paper in March 2022 and tokenomics in May 2022. Currently they are in Devnet and awaiting announcements for Testnet and Mainnet. Testnet is scheduled to launch in Q4 2022. Stay tuned for more updates on Sui, including upcoming launches on our Twitter. 

This is a development that has taken hold of the market in the past week or so, with the FTX collapse and bankruptcy having the inadvertent (but entirely predictable) result of pushing traders and investors away from centralized exchanges (CEXes). Now, they’re increasingly turning to DEXes, with DappRadar finding that such exchanges have processed around $31 billion in trades in the week to November 15, representing an increase of 178% compared to the previous seven days.

It’s therefore reasonable to assert that a major shift is underway in the cryptocurrency market and ecosystem, with FTX’s demise serving to highlight the dangers that comes with having opaque centralized businesses (ruled over by a single executive) look after your money. However, while a move to DEXes is potentially a big win for crypto and its nominally decentralized ethos, it doesn’t come without its own dangers, as has been highlighted by the ongoing spate of hacks the DeFi sector has seen in recent years.

Decentralized Exchanges Grow Following FTX Collapse

The available data shows a significant increase in trading volumes for all major DEXes since the FTX collapse. For example, a version of the CoinMarketCap website indexed on October 23 (the latest available date prior to the FTX crisis) shows much smaller 24-hour volumes for the top decentralized trading platforms. Meanwhile, its current page shows big increases for pretty much all of them, as outlined below:

• 1. Uniswap: $130.6 million (Oct 23) – $886 million (now): 578.4% increase

• 2. dYdx: $149.5 million (Oct 23) – $686.7 million (now): 359.3% increase

• 3. Curve Finance: $33.6 million (Oct 23) – $195.3 million (now): 481.25% increase

• 4. PancakeSwap: $31.2 million (Oct 23) – $174.9 million (now): 460.6% increase

• 5. ApollxDEX: $29.4 million (Oct 23) – $97.6 million (now): 232% increase

With only a few exceptions (e.g. Kine Protocol), every DEX tracked on aggregators such as CoinMarketCap show an increase between pre-FTX collapse and now. By contrast, centralized exchanges witnessed either modest increases or pretty much no changes over the same period (with the exception of FTX, which went from over $1 billion in reported daily volumes to pretty much nothing). And depending on the dates you check, you will also see big declines for CEXes, with daily volumes on October 26 much higher than they are now.

As such, it’s tempting to conclude that something fundamental is currently changing within the cryptocurrency ecosystem. Indeed, social media is currently crammed with commentators predicting the demise of CEXes, in parallel with the rise of DEXes.

DeFi Has Downsides

However, while FTX’s collapse has truly underlined the importance of self-custody, there are a number of obstacles which DEXes and DeFi in general will have to surmount if the ongoing crisis will result in a sustained and deep shift.

First up, decentralized exchanges have a less-than positive reputation when it comes to user experience and ease-of-use. Even in the wake of the FTX collapse, when support for DEXes has increased, many industry figures have taken to social media to criticize DeFi trading platforms, arguing that poor UX has long turned off potential customers and may continue to do so unless something is done.

According to a Twitter poll conducted by developer Gabriel Leydon, the most popular reason for not using a decentralized exchange is the lack of fiat on-off ramps, meaning the average trader is put off by already having to have crypto in order to trade on Uniswap and the like.

Leydon’s poll also highlights another big challenge DEXes and DeFi face: hacks. For example, estimates suggest that DeFi-related exploits have passed $3 billion in nominal value so far in 2022, with protocols such as Ronin, Wormhole and the Poly Network being breached for hundreds of millions of dollars each in the past year or so.

Clearly, the average cryptocurrency investor doesn’t want to take their funds from a centralized exchange only to have them stolen in a DeFi hack. As such, the industry really needs to do something to improve the quality of its cybersecurity programming, and in this respect it’s pleasing to note that many have launched bug bounty programs in the wake of hacks. At the same time, startups such as Immunefi have raised millions of dollars to support the development of bug bounty platforms focused on DeFi and Web3.

This raises hope that the major technical challenges faced by DEXes will eventually be solved, yet there’s one more big hurdle that also needs to be cleared if decentralized trading platforms are to take advantage of the FTX collapse. Namely, they and the DeFi sector need to face regulatory challenges that are fast approaching, with the US Congress preparing to debate new legislation that could have a cooling effect on the evolution of DeFi. Likewise, the European Union has also set DeFi in its sights, with a policy paper authored on behalf of the European Commission in October recommending that new rules are introduced in order reduce the “severe threat” DeFi poses to the consumers.

Most notably, senators Debbie Stabenow and John Boozman have now re-committed to pushing forwards with the Digital Commodities Consumer Protection Act of 2022, a bill that critics have claimed might end up “killing DeFi and other novel crypto use cases.” What’s interesting about this is that this legislation had previously been supported and lobbied for by none other than Sam Bankman-Fried, the very person whose shenanigans so clearly underline the need for some form of DeFi.

It’s hard to say whether this bill will ultimately be passed, with other comprehensive pieces of crypto-related legislation also going through Congress as we speak. Either way, it shows that the rise of decentralized exchange in the wake of the FTX collapse is far from guaranteed.