Do I need SUI before using the lending app?

Yes. A wallet needs SUI to pay transaction gas before supplying, borrowing, repaying, withdrawing, staking SCA, or refreshing reward boosts. The asset being supplied or borrowed is separate from the gas token. A user who bridges USDC, USDT, WETH, or another token into Sui still needs a small amount of SUI in the same wallet to execute transactions.

Which wallets work for a new user on Sui?

The protocol documentation lists Sui Wallet, Martian, Elli, Suiet, OKX, and Bitget among recommended Sui wallet options. The practical requirement is support for Sui transactions and wallet connection to the app. After setup, the user connects the wallet, confirms Move transactions, and keeps control of objects such as sCoins and ObligationKeys inside the wallet account.

Fees on Scallop borrowing: what gets deducted from a loan?

Borrowing fees depend on the asset category. Main assets have a 0.3% borrow fee, while emerging and isolated assets have a 1% borrow fee. The fee is deducted from the amount received at the time of borrowing rather than collected as a separate wallet payment. Borrowers also owe ongoing interest, and Sui gas applies when transactions execute.

Can one wallet keep separate borrowing strategies?

Yes. One Sui address has access to multiple sub-accounts, including the primary account, and each borrowing strategy is represented through an obligation. Separate obligations help isolate collateral and debt choices. This is especially useful when using isolated assets, because an obligation with isolated asset debt cannot also carry other borrowed assets at the same time.

What happens if my Risk Level reaches 100%?

At 100%, the position becomes eligible for liquidation. A liquidator repays part of the debt and receives collateral at a discount, while the borrower's debt decreases by the repaid amount. The documented soft-liquidation design caps a normal liquidation call at up to 20% of total debt value, though very small debt positions receive different treatment.

Is the SCA token required to supply or borrow?

SCA is tied to protocol incentives, veSCA locks, reward boosts, loyalty mechanics, referrals, and governance direction. Basic supply and borrow actions revolve around supported market assets, collateral rules, obligations, and gas. A user does not need to hold SCA simply to understand the lending flow, but it matters for users who want incentive-related features.

How long does a veSCA lock last?

The veSCA system uses lock rounds, with a documented minimum of one full round and a maximum of 1,460 rounds, equal to four years. The veSCA amount depends on the locked SCA and the remaining lock duration, then decays as time passes. Users can add more SCA or extend the period, but the lock period cannot be shortened.

PeakDen Reviews

Tips and walkthroughs

Scallop is a Sui-native money market with sCoins and obligation keys

Scallop is a DeFi lending market on Sui where supplied assets become sCoins, borrowing positions are tracked through Sui object-based obligations, and rates adjust as pool utilization changes. Users supply assets such as SUI, USDC, USDT, WETH, or WBTC, borrow against approved collateral, monitor Risk Level, and repay debt through a self-custodied wallet interface on the Sui blockchain.

The protocol is built around a familiar money-market pattern, but its Sui implementation gives it a different shape. Deposits, debt records, collateral permissions, and account ownership sit inside Move smart contracts rather than a centralized account database. That matters because lending positions become composable Sui objects, which makes them easier to integrate into other DeFi tools while keeping the core workflow direct: supply, borrow, repay, and withdraw.

From supplied assets to sCoins

When a user supplies an asset, the lending pool receives the underlying token and issues a market representation known as an sCoin. The sCoin records the depositor's claim on the pool and rises in value as borrower interest accrues. This is similar in spirit to interest-bearing tokens used by older lending markets, but it is designed for Sui's Move environment and the asset-object model used across the network.

On Scallop, a supplier earns from borrower interest while retaining a tokenized position that other builders reference in integrations. The important detail is that Scallop uses sCoins as a receipt and accounting layer, not just as a dashboard number. That gives the market a route into derivatives, structured positions, and other Sui-native DeFi workflows without forcing every application to rebuild deposit accounting from scratch.

Borrowing through Obligation objects and keys

Borrowing begins with an Obligation, the Sui object that records collateral and debt for a position. The owner holds an ObligationKey, which works as the proof needed to mutate that position. A single wallet address has access to multiple sub-accounts, including the primary account, so separate strategies sit in separate obligations instead of being blended into one debt record.

Scallop uses Sui's object-centric model to make that ownership explicit. Transferring an ObligationKey transfers control of the linked obligation, so handling that object deserves the same attention as handling a valuable NFT. Collateral value, borrow weight, liquidation factor, and borrowed asset selection all flow into the account's health calculation. A volatile borrowed asset weighs more heavily against the position than a stablecoin debt with a lower borrow weight.

Rates follow pool utilization curves

Interest rates change with supply and demand inside each market. When more capital is borrowed from a pool, utilization rises and borrowing becomes more expensive. When supplied liquidity is abundant relative to demand, the borrow rate falls. The model described for the protocol is trilinear, so it reacts in phases rather than with one flat slope across all utilization levels.

This matters most near high utilization. A pool with little idle liquidity charges more to borrow because suppliers take on greater withdrawal and liquidity risk. Borrowers see that signal through the rate shown in the interface, while suppliers see the effect through the yield available on deposited assets. The rate is a market output, not a fixed coupon.

Fees, asset classes, and liquidity limits

In most cases, Scallop groups markets into main assets, emerging assets, and isolated assets. Main assets carry a lower borrow fee of 0.3%. Emerging and isolated assets carry a 1% borrowing fee, reflecting tighter risk controls for newer, more volatile, or less liquid tokens. Flash loans carry a 0.1% fee. Users also pay normal Sui gas and a small oracle-related cost when price data is fetched for market operations.

Asset class controls matter because collateral and borrow rules differ by market. Emerging assets, including tokens such as WAL, SCA, DEEP, CETUS, Hadeal, wWAL, and haWAL in the documented launch set, sit between established main markets and isolated pools. Isolated assets restrict borrowing more tightly: debt for one isolated asset cannot share an obligation with other debt, so separate obligations are the clean workflow for users running several strategies.

Daily outflow limits add another control layer. These limits cap how much of a given asset leaves a borrowing pool over a 24-hour window, helping the market absorb large moves without draining liquidity in a single burst.

What SCA and veSCA add to the market

SCA is the protocol's Sui-based utility token, with a documented maximum supply of 250,000,000 SCA. Its allocation includes liquidity mining, project contributors, operations, strategic partners, ecosystem and community programs, liquidity, treasury, and advisors. The token is tied to incentives and protocol utility rather than the basic ability to supply or borrow.

veSCA is created by locking SCA for a chosen duration. The amount of veSCA depends on both the locked amount and the remaining lock time, with a maximum lock period described as four years. Holding it affects reward boosts, loyalty mechanics, referral-related benefits, and governance direction as that infrastructure matures. Because veSCA decays over time, the position needs active management when a user wants to preserve a boost.

Liquidation math in the Sui dashboard

Each borrowing account has a Risk Level based on weighted debt and liquidation-adjusted collateral. Below 100%, the account remains healthy. At 100% or above, the position becomes available for liquidation. The inputs are concrete: debt token prices, borrow weights, collateral token prices, liquidation factors, and the mix of assets inside the obligation.

On Scallop, liquidation is designed as a partial process. A liquidator repays up to 20% of the borrower's total debt value in one liquidation call, receives collateral at a discount, and the protocol captures the spread between penalty and discount where applicable. Smaller debt positions under the documented dust threshold receive different handling because incremental liquidation is uneconomical. The borrower avoids liquidation by repaying debt, adding collateral, or reducing exposure to high-weight borrowed assets before the account crosses the threshold.

Starting from a Sui wallet

A new user begins with a Sui-compatible wallet and enough SUI for gas. The interface supports the usual route: connect a wallet, choose a market, supply an asset, create or select an obligation for borrowing, and confirm transactions in the wallet. Users bridging assets into Sui commonly encounter Wormhole Connect for transfers from chains such as Ethereum, Solana, Polygon, Avalanche, and BNB Smart Chain.

Install a supported Sui wallet and secure the recovery phrase.
Hold SUI for transaction gas before interacting with lending markets.
Supply an asset to receive the corresponding sCoin position.
Create an obligation before borrowing against collateral.
Track Risk Level after every borrow, repay, or collateral change.

Security work and oracle design

The core lending contracts and related modules have audit coverage from firms including Zellic, OtterSec, MoveBit, and Asymptotic. The protocol also publishes open-source lending code, which gives developers and independent reviewers a way to inspect the implementation. Audits reduce blind spots, while live market risk still comes from price movement, oracle freshness, liquidity, smart contract upgrades, and user transaction choices.

Price data is central to every lending market. The oracle setup uses Pyth as the active price feed provider in the documented configuration, with multi-oracle planning around Pyth, Switchboard, and Supra. That design direction aims to compare feeds and abort operations when abnormal price data appears, which is especially important for volatile Sui ecosystem assets and liquidation-sensitive loans.

Where it fits beside Sui DeFi alternatives

For context, Scallop belongs to the Sui lending layer alongside markets such as Navi Protocol and Suilend. The choice between them comes down to supported collateral, available liquidity, interest curves, incentive design, liquidation rules, and how well each interface fits a user's workflow. Some users keep stablecoin supply positions simple; others build layered borrowing strategies around SUI, liquid staking tokens, or ecosystem assets.

The protocol's clearest distinction is the combination of sCoins, transferable obligation keys, sub-account style borrowing positions, emerging and isolated asset classes, and a soft-liquidation design. That makes it especially relevant for users who already operate inside Sui DeFi and want a lending market that exposes the chain's object model rather than hiding it behind a generic borrowing screen.

Before you start with Scallop

Do I need SUI before using the lending app?: Yes. A wallet needs SUI to pay transaction gas before supplying, borrowing, repaying, withdrawing, staking SCA, or refreshing reward boosts. The asset being supplied or borrowed is separate from the gas token. A user who bridges USDC, USDT, WETH, or another token into Sui still needs a small amount of SUI in the same wallet to execute transactions.
Which wallets work for a new user on Sui?: The protocol documentation lists Sui Wallet, Martian, Elli, Suiet, OKX, and Bitget among recommended Sui wallet options. The practical requirement is support for Sui transactions and wallet connection to the app. After setup, the user connects the wallet, confirms Move transactions, and keeps control of objects such as sCoins and ObligationKeys inside the wallet account.
Fees on Scallop borrowing: what gets deducted from a loan?: Borrowing fees depend on the asset category. Main assets have a 0.3% borrow fee, while emerging and isolated assets have a 1% borrow fee. The fee is deducted from the amount received at the time of borrowing rather than collected as a separate wallet payment. Borrowers also owe ongoing interest, and Sui gas applies when transactions execute.
Can one wallet keep separate borrowing strategies?: Yes. One Sui address has access to multiple sub-accounts, including the primary account, and each borrowing strategy is represented through an obligation. Separate obligations help isolate collateral and debt choices. This is especially useful when using isolated assets, because an obligation with isolated asset debt cannot also carry other borrowed assets at the same time.
What happens if my Risk Level reaches 100%?: At 100%, the position becomes eligible for liquidation. A liquidator repays part of the debt and receives collateral at a discount, while the borrower's debt decreases by the repaid amount. The documented soft-liquidation design caps a normal liquidation call at up to 20% of total debt value, though very small debt positions receive different treatment.
Is the SCA token required to supply or borrow?: SCA is tied to protocol incentives, veSCA locks, reward boosts, loyalty mechanics, referrals, and governance direction. Basic supply and borrow actions revolve around supported market assets, collateral rules, obligations, and gas. A user does not need to hold SCA simply to understand the lending flow, but it matters for users who want incentive-related features.
How long does a veSCA lock last?: The veSCA system uses lock rounds, with a documented minimum of one full round and a maximum of 1,460 rounds, equal to four years. The veSCA amount depends on the locked SCA and the remaining lock duration, then decays as time passes. Users can add more SCA or extend the period, but the lock period cannot be shortened.