30x oversubscribed! Will Cetus become the leading DEX on Sui?

Reproduced with permission from the "Biteye" community

Original Article Link

Author: Lucky, Core Contributor at Biteye

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Editor: Crush, Core Contributor at Biteye

*Full article approximately 1700 words, estimated reading time is 4 minutes.

On May 8th, Cetus' IDO officially began. As of the morning of May 10th, the subscription funds in its Launchpad have exceeded 25 million SUI, while the Hard Cap raised this time is only 800,000, exceeding 30 times the subscription funds. This performance shows the market's favor for the project. So, what exactly attracted everyone's attention to this project?

TLTR:

Highlights:

1. Strong financial background
2. Reasonable protocol products and models, good product experience
3. First-mover advantage
4. DEX with launchpad increases token application scenarios

Risks:

1. The Sui ecosystem is still in its early stages, to some extent limiting the development of DEX
2. Subsequent competitors fighting for market share

This article will introduce this project from the following three aspects:

1. Protocol introduction and token model
2. Current business data
3. Prospects and outlook

Protocol Introduction

Cetus is a decentralized trading platform and concentrated liquidity protocol focused on the Move ecosystem (including Sui and Aptos). It will serve as a vital component of the underlying infrastructure of the Move ecosystem to meet the diverse needs of traders, liquidity providers, Layer 2 protocols, and various DeFi user groups.

Cetus completed its seed round financing on May 2nd, led by OKX Ventures and KuCoin Ventures, with participation from Comma3 Ventures, NGC Ventures, Jump Crypto, Animoca Ventures, IDG Capital, Leland Ventures, AC Capital, Adaverse, Coin98 Ventures, among others. The specific amount of financing has not been disclosed.

Cetus Features

Concentrated Liquidity: As a trading platform, Cetus features concentrated liquidity similar to Uniswap V3, allowing users to select ranges when providing liquidity to maximize capital efficiency. Cetus also offers users four choices:

1. Conservative range
2. Aggressive range
3. Full range
4. Customized

Permissionless: Cetus allows other users and protocols to integrate with Cetus at any time, whether to create new trading pools or to continue building other LEGO products as underlying protocols.

Composability: Following the liquidity-as-a-service concept, developers can easily access Cetus to develop derivative products, leverage mining, and other products. They can also build interfaces on their front end by integrating Cetus SDK to access liquidity on Cetus.

Token Model

The current token distribution of Cetus is as follows:

1. 50% allocated to the community, mainly for liquidity incentive programs
2. 20% allocated to the team and advisors, with a 12-month lock-up period, followed by linear unlocking over the next 24 months
3. 15% allocated to investors, with a 6-month lock-up period, followed by linear release over the next 12 months
4. 15% used for initial liquidity provision, long-term community activity incentives, and insurance fund

IDO Situation: 2% of Cetus tokens are allocated for the IDO, priced at 1$CETUS = 0.04$SUI. Calculated based on the current price of $1.2 for SUI, the IDO price for $CETUS is 0.048. According to the announcement, the initial circulating supply is 8%, resulting in an initial circulating market value of $384w and a total market value of $4,800w.

The IDO activity is still ongoing, with a deadline of May 10th at 18:00. OKX, as an investor, will list $CETUS immediately after the IDO ends, which is one of the reasons for the current hot IDO.

xCETUS Governance Incentive Model:

To promote protocol governance and development, Cetus has designed a token mechanism for $CETUS and $xCETUS.

The features include:

1. CETUS can be converted to xCETUS at a 1:1 ratio at any time;
2. The conversion ratio of xCETUS to CETUS varies from 1:0.5 to 1:1 based on different lock-up periods;
3. Higher xCETUS balance represents higher voting rights;
4. xCETUS balance will be used to calculate purchase quota weight in the future Launchpool;
5. Providers locking xCETUS for liquidity mining can receive additional rewards, with reward multipliers ranging from 1.25x to 2.5x.

Current Business Data

As of the morning of May 10th, Cetus's TVL is $16,083,382, with a trading volume of $6,573,690 in the past 24 hours. The main TVL is concentrated in USDT-USDC, with an APR of 24.64%.

The following image shows the current APR status of various pools on Cetus. Currently, Cetus offers additional Bonus incentives for some pools, resulting in higher APR yields in these pools due to fee income + Bonus incentives.

(Bonus situation: USDT-USDC and SUI-USDC pools receive a daily liquidity provider incentive of 8000USDC; WETH-USDC pool receives a daily liquidity provider incentive of 4000USDC)

Looking at the trading data, Cetus has had a daily trading volume of over 5 million for the past six days, with a total of 81,648 transactions and 21,790 unique accounts.

(It is worth noting that this business data has been driven by certain IDO activities, and some accounts are only for subscription quotas, not for trading.)

Additionally, examining the TVL changes from DefiLlama, it can be seen that the TVL peaked at around $30 million on May 6-8, then dropped to the range of $16-20 million.

It can be observed that during the peak period, nearly 30% of the liquidity came for whitelist qualification and left after the snapshot ended, indicating that the current TVL is closer to a realistic level.

Prospects and Outlook

From the protocol data accessed by DeFiLlama, Cetus currently ranks first in the Sui ecosystem due to its first-mover advantage (mainnet launch + rapid IDO activation), leading in TVL within the ecosystem.

However, due to its relatively short time online and the limited number of protocols issuing coins in the entire SUI ecosystem, there will be certain limitations on increasing trading volume for this DEX in the near future.

Only with the development of the SUI ecosystem will the overall space of the DEX track open up. Therefore, the development of the protocol is closely related to the overall development of the SUI ecosystem, which is still in its early stages.

Furthermore, competitors in the same track such as Turbos Finance, Suiswap, and MOVEX will also launch their mainnets one after another, bringing about competition for Cetus.

Based on its token model, Cetus will allocate 50% of tokens for liquidity mining incentives to continue developing and maintaining its position. It will also list other protocol tokens through Launchpad to empower $CETUS tokens, ensuring the steady development of the protocol through dual strategies.

Regardless, with its impressive performance since its launch and strong financial backing, this project may be worth long-term attention.