Scallop Protocol Enhances DeFi within Sui Blockchain

Scallop, a DeFi protocol on the Sui blockchain ecosystem, is set to undergo testing next week, aiming to enhance liquidity.

In the coming week, the Scallop loan protocol for the Sui (SUI) blockchain ecosystem will begin testing, which will move the SUI supply rewards to a new location and improve the SUI borrow incentives.

The interest rate in each of the three phases of Scallop’s interest rate model is dependent on the percentage of available funds used at that step. Individuals offering assets on the Scallop platform face increasing interest rates due to the correlation between rising borrowing rates and utilization rates.

The first week of April will see a 50/50 split between supply and borrowing incentives. Scallop borrowers can earn twice as much as they would with the SUI incentive and have an additional chance to receive four times as much with the SCA Boosted Borrow Incentives. Lenders will still receive the SCA incentives.

Additionally, this adjustment will result in a revision of the borrowing charge from the current 0.1 to 0.3 starting on April 29th. As a direct compensation for their staking efforts, VeSCA holders will have the chance to participate in revenue sharing and receive a percentage of the protocol revenue.

Enhance Sui’s DeFi Liquidity with Scallop

The Sui Foundation supports Scallop, a decentralized finance (DeFi) protocol that functions as a peer-to-peer money market within the Sui ecosystem. Its many features include a user interface for bridges and swaps, lending derivatives, flash loans, SDKs, and Sui PTB construction tools.

Sui, a Layer 1 decentralized proof-of-stake (PoS) network with horizontally scalable throughput and storage capabilities, enables rapid and cost-effective application development.

An overemphasis on providing or locking up assets has created an overabundance of idle assets in the Sui lending space, which has reduced the vitality of the DeFi space owing to a lack of freely circulating liquidity; this is something that the recent adjustment aims to remedy.