Author: Kyrie, Founder of Typus Finance
In the world of cryptocurrency, "institutional currency" has always been a term that retail investors are terrified of. But why is it always difficult for project owners to get rid of the influence of institutional investors? There are complex business logic and practical considerations behind this.
The Dilemma of Coin Issuance: High Cost and Institutional Dependence
Source: Simon’s X (@sjdedic)
The cost of successfully launching a cryptocurrency project is often far beyond the imagination of most people. The process of issuing a coin alone may cost $1-3 million. This cost is mainly used for:
Smart Contract Development and Auditing
Initial liquidity provision
Market Maker Cooperation Fees
Exchange listing fees
Marketing expenses
This sky-high cost forces many project owners to bow to institutional investors, centralized exchanges, market makers and other "institutional forces". Once on this path, the project will fall into a vicious cycle:
Early funding dilution: A large number of tokens were sold to institutions at a discounted price
The cost of listing coins is increasing: large exchanges charge hundreds of thousands of dollars for listing coins
High market making costs: Professional market makers require high fees and token share
Market capitalization management pressure: Institutional investors demand to maintain token prices, driving up marketing spending
The consequences of this dependence are:
Token distribution is tilted towards institutions, and retail investors have difficulty getting fair participation opportunities
The project potential is overdrawn in advance, and retail investors bear the risk after institutions take profits
Violating the original intention of blockchain decentralization
The project owner loses focus on product development and is forced to invest a lot of energy in price maintenance.
Innovative attempts in Sui ecology: Typus Finance’s path to breakthrough
"If we can provide sufficient liquidity like centralized exchanges on the first day, retail investors will no longer have to rely on institutions." This seemingly simple idea has become the mission of the Typus Finance team in the Sui ecosystem.
Typus saw the possibility of breaking through the dilemma on Sui, a high-performance public chain. Their solution cleverly combines Deepbook's order book system, just like building a professional exchange infrastructure on the chain. However, infrastructure alone is not enough, the real innovation lies in how they solve the liquidity problem.
Imagine what would happen if you could combine the idle funds in the lending agreement with the technology of professional market makers, and then balance the risks through option tools? Typus is working in this direction. Their goal is not only to replace the second-tier centralized exchanges, but also to gain more say for Sui ecological projects in negotiations with large exchanges.
Deepbook: Redefining Order Book Infrastructure
Source: Sui Blog
In the crypto market, the order book system is like the "heart" of the exchange, and its performance directly determines the vitality of the entire platform. For a long time, this core infrastructure has been monopolized by centralized exchanges, which have built a high wall to block decentralized projects.
Typus chose to cooperate with Deepbook because it saw the breakthrough potential of the Sui ecosystem’s native order book system. It is like opening a new door on a high wall, allowing decentralized trading to have performance comparable to that of centralized exchanges.
Deepbook's excellence is reflected in three key dimensions:
First of all, its extreme performance:
Capable of processing tens of thousands of orders per second, the response speed is fast enough to satisfy the most discerning high-frequency traders
Latency is as low as milliseconds, just like giving on-chain traders a pair of wings
Support various complex order types to meet the needs of different trading strategies
The second advantage is its native liquidity. Imagine a river that never stops flowing, and Deepbook is the main channel of this river:
Directly connects all liquidity providers in the Sui ecosystem
Greatly reduces the chance of cross-platform arbitrage, making prices more realistic
Provides a deeper liquidity pool for the market, allowing large transactions to be handled with ease
Finally, and most revolutionary, is its cost advantage:
Take full advantage of Sui's low gas fee feature to minimize the cost of each transaction
Cut out the layers of commissions in the middle link, leaving more profits to market participants
It creates greater profit margins for market makers and attracts more professional players to enter the market
These advantages combined make Deepbook not just a simple order book system, but an infrastructure that can reshape market rules. It is like a modern trading port that can not only handle massive transactions, but also allow each participant to enjoy an unprecedented trading experience.
In Typus' vision, Deepbook is an important cornerstone for decentralized coin issuance. When high-performance infrastructure meets innovative liquidity solutions, new projects finally see hope of breaking away from institutional dependence.
Typus’ Innovation: Option-Driven Liquidity Solution
In the traditional cryptocurrency market, market makers are like stuntmen walking on a tightrope. They need to constantly adjust their positions on both the buying and selling sides to find a balance in price fluctuations. This job seems simple, but it is actually full of challenges and risks.
Imagine this: when the market suddenly soars or plummets, the situation of market makers is like keeping a balance in a storm. They face two major threats: one is the directional risk (Delta risk) brought by price changes, just like the tightrope being blown crooked by the wind; the other is the cost (Gamma risk) of constantly adjusting positions, just like constantly adjusting the center of gravity on the tightrope.
To cope with these risks, market makers usually adopt conservative strategies:
Widening the bid-ask spread is equivalent to raising their “insurance premium”
Reducing the mobility provided is equivalent to lowering the height of the tightrope
Withdraw directly when the market fluctuates violently and choose to temporarily give up the performance
This is why we often see wild price swings just when the market needs liquidity the most — because market makers are choosing to hedge.
Typus provides a very creative solution. Instead of letting market makers face risks alone, it provides them with a complete "protection system":
First, Typus has established an innovative options liquidity pool. This is like providing a safety net for tightrope walkers, allowing them to move more confidently in the market. Projects can create option pools here to provide risk hedging tools for market makers. The entire process is managed automatically by smart contracts, which is transparent and efficient.
Secondly, Typus cleverly integrates lending protocols. Imagine that there is a large amount of funds dormant in Sui's ecosystem, and Typus wakes up these funds, providing more ammunition for market makers. This not only reduces the capital cost of market makers, but also improves the efficiency of capital use in the entire ecosystem.
Finally, Typus designed a sophisticated incentive mechanism, like setting up a reasonable reward system for performers:
Market makers who provide long-term and stable liquidity can get more rewards
The interests of all parties involved are cleverly balanced
The entire system forms a sustainable development ecosystem
The biggest highlight of this innovative mechanism is that it allows market makers to provide liquidity at a lower cost and in a more stable manner. When market fluctuations occur, they no longer need to evacuate in a panic, but can use options tools to hedge risks and continue to provide the necessary liquidity support to the market.
For project owners, this means they can obtain more stable market liquidity at a lower cost; for traders, this means smaller slippage and a better trading experience. This is the uniqueness of the Typus solution: it not only solves the pain points of market makers, but also brings unprecedented stability to the entire market.
Ecological win-win: the beginning of a virtuous cycle
Imagine that in the process of issuing coins for traditional crypto projects, entrepreneurs often seem to be walking on a thorny road. They need to constantly "kowtow" to institutions and exchange favorable prices for support, but in the end they may end up with a label of "institutional currency". But in the new world created by Typus, this story can unfold in a completely different way.
When a new project is ready to issue tokens on Sui, they no longer need to "beg for alms" everywhere. Through Typus' infrastructure, they can directly obtain professional-level liquidity support. This is like paving a smooth road for entrepreneurs - prices can be formed naturally, large investors will not set off huge waves when entering and exiting, and small investors can also enjoy fair prices.
This new paradigm brings new opportunities to every participant in the ecosystem:
For the project owners, this is a real liberation:
No need to worry about the high cost of issuing coins
Ability to control the distribution of tokens
They can invest their precious time and energy into product development. Most importantly, they can finally realize value according to their own vision instead of being led by the nose by the organization.
This is a more robust business model for market makers:
With more comprehensive risk management tools, you no longer have to worry about market fluctuations
The operating costs are greatly reduced, and the profit margin is more secure
The source of income is more stable, and long-term development strategies can be established, just like turning a high-risk speculative business into a sustainable professional career.
For retail investors, this is a game-changer:
Finally able to participate in quality projects at fair prices
What we see is the real market supply and demand, not the result of institutional manipulation
Transaction costs are reduced, and investors are no longer “leeks” but important market participants
For the entire Sui ecosystem, these changes have converged into an upward force:
More high-quality projects will be attracted by this fair mechanism
The ecosystem gradually establishes its own independent project distribution channel
Forming an organic growth model from the inside out
It is like sowing a seed and gradually growing it into a big tree. The entry of high-quality projects attracts more users to participate, and the growth of users attracts more projects to join, forming a virtuous circle. Gradually, the entire ecosystem will become stronger, and every participant can find their own growth space in this fertile soil.
In this new ecosystem, we no longer see a zero-sum game, but a beautiful picture of win-win for all parties. When every participant can share the development dividend fairly, the entire market can truly achieve sustainable development.
Future Outlook
Typus' innovative attempt represents an important step towards the maturity of the crypto market. By redesigning the coin issuance mechanism, it attempts to find a win-win path for project owners, investors, market makers and retail investors.
The changes this new paradigm may bring include:
More projects choose a completely decentralized coin issuance path
Redefining the role of institutional investors
Innovation of market maker model
Increased participation of retail investors
In this blockchain revolution, Typus' attempt may become a key step to break the fate of "institutional currency". When every participant can find their own value positioning in the system, true decentralized finance can turn from ideal into reality.
