Sui Implements Shared Custody Model for Enhanced Decentralized Finance

Sui, a blockchain known for its object-centric data model, has unveiled a new shared custody model aimed at improving security and efficiency for decentralized finance (DeFi) applications, according to The Sui Blog.

Introduction to Shared Custody

In decentralized finance, many applications require multiple parties to share access to on-chain states. For instance, a lending protocol needs timely access to liquidate positions, and dollar-cost averaging (DCA) strategies require frequent and automated trades. Traditionally, this is achieved through account-centric models, but Sui’s object-centric framework presents unique challenges and opportunities.

Implementing Shared Custody

The shared custody relationship on Sui leverages the platform’s object-ownership model. By using Shared Objects, Sui allows multiple entities to interact with an object. This method, however, introduces potential issues such as unrestricted access and increased risk of misuse. To mitigate these, Sui employs a custom object called an 'Order,' which encapsulates rules and restrictions on how funds can be accessed and managed.

Challenges and Solutions

While the shared custody model addresses accessibility, it also introduces complexities related to gas fees and network congestion. The model requires multiple objects to manage permissions, increasing both the cost and complexity of transactions. Additionally, shared objects can lead to network congestion as consensus is required to order transactions.

To address these, Sui proposes using multi-signature (multisig) transactions. This approach retains the benefits of owned objects while allowing multiple entities permissioned access, thereby reducing gas fees and mitigating network congestion. The multisig model ensures that only authorized parties can interact with the object, enhancing security and efficiency.

Security and User Experience

Sui emphasizes the importance of user security and transparency. The shared custody model ensures that users' funds are protected through strict on-chain enforcement of access controls. The use of multisig transactions, programmable transaction blocks, and sponsored transactions provides a robust framework for secure and efficient DeFi operations.

Future Prospects

With this implementation, Sui aims to set a new standard for shared custody in decentralized finance. The model not only enhances security and efficiency but also offers a transparent user experience. Sui plans to extend this shared custody model to other domains, further advancing the capabilities of Web3 applications.