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.

Image
source:
Shutterstock