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Key Points
Cetus is a decentralized trading platform and liquidity system protocol built on Sui and Aptos blockchains.
Cetus is committed to creating a flexible and reliable liquidity network that enables DeFi users to trade more easily and efficiently.
Cetus Protocol adopts a Concentrated Liquidity Market Maker (CLMM) model, allowing liquidity providers to set smaller price ranges for their positions, thereby greatly enhancing capital efficiency.
What is Cetus?
As a decentralized trading platform (DEX) and concentrated liquidity protocol built on the Sui and Aptos blockchains, the core goal of Cetus is to create a flexible and powerful network to enhance market liquidity and provide all users with a smoother and more convenient trading experience.
Cetus is also dedicated to providing an excellent trading experience for decentralized finance (DeFi) users and enhancing the liquidity utilization efficiency of the entire Web3 ecosystem.
Main Features of Cetus
Permissionless
Cetus allows any user or app to freely access its core tools and features. For example, users can create new trading pools or set up customized services related to liquidity on Cetus without obtaining any special permissions, making it easy to get started.
Programmable
Cetus is a flexible liquidity protocol based on the Concentrated Liquidity Market Maker (CLMM) model. Users can set various trading strategies on the platform, including complex strategies commonly found on centralized trading platforms. The CLMM model also helps liquidity providers significantly enhance capital efficiency.
Composability
Cetus was designed with integration in mind, offering 'liquidity as a service.' Developers can easily leverage Cetus's liquidity to develop their own services, such as vaults, derivatives, or leveraged mining products. Cetus's software tools also support new projects in quickly setting up trading or exchange entry points on their pages.
Sustainability
The Cetus ecosystem adopts a dual-token model to ensure the long-term sustainability of the protocol, aiming to provide continuous rewards to users who actively participate in network activities and contribute.
CETUS is the platform's main native token, while xCETUS is a liquidity staking token (LST) representing staked CETUS.
Concentrated Liquidity Market Maker (CLMM)
In the traditional Automated Market Maker (AMM) model, liquidity is evenly distributed across the entire price range. However, this often leads to most liquidity being idle, especially in stablecoin pools with low price volatility.
In the Concentrated Liquidity Market Maker (CLMM) model, liquidity providers (LP) can concentrate their liquidity in active price ranges, thereby utilizing liquidity more efficiently and earning more fees.
In the CLMM system, the liquidity distribution created by LP for each price range is called a 'position.' They can flexibly set multiple positions within a liquidity pool to meet different trading strategy needs.
Once the market price exceeds the position range, the liquidity will stop operating and can no longer earn fees, but will reactivate once the price returns to the range. This mechanism allows LP to flexibly adjust their strategies based on market trends, locking in active trading price ranges to maximize returns as much as possible.
Why did Cetus choose Sui and Aptos?
Cetus operates on the Sui and Aptos blockchain networks.
Sui is designed for high-speed transactions and instant settlement, making it an ideal choice for applications that require quick responses. Its unique architecture provides strong support for the introduction of innovative features in the Web3 domain.
Aptos is an emerging blockchain committed to significantly improving speed, scalability, and flexibility. As it continues to develop, Cetus aims to become an important part of the Aptos ecosystem, helping to build a more efficient network.
What rewards can LP earn on Cetus?
LP on Cetus can earn returns through the following methods:
Trading fees: LP can earn fees from the active price range covered by their liquidity, which is often their primary source of income.
Liquidity mining: In addition to earning trading fees based on specific liquidity pools and price ranges, LP can also receive additional rewards based on their positions. Liquidity mining can generate specific NFTs representing LP's positions.
Loyalty programs: Active participants can earn additional incentives through loyalty programs such as liquidity locking or leaderboard activities.
Cetus tokens
Cetus offers two tokens: CETUS and xCETUS.
CETUS is the main token of the Cetus Protocol, used for cross-chain transactions or as a medium of exchange within the network. Users can acquire CETUS through liquidity mining.
xCETUS is a non-transferable custody token representing staked CETUS. Users holding xCETUS can gain voting rights based on their holdings and participate in governance decisions of the Cetus network.
Conclusion
Cetus is an innovative DEX deployed on Sui and Aptos, utilizing the CLMM model. By building a strong and flexible liquidity network, Cetus is dedicated to providing DeFi users with a smooth trading experience and significantly improving liquidity utilization efficiency.
Further reading
What is a Decentralized Exchange (DEX)?
What is liquidity staking?
What is an Automated Market Maker (AMM)?
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