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Scallop Official: Sui Lending, sCoins & veSCA 

Scallop Official: The Sui Money Market 

Scallop Official is the leading peer-to-peer money market on the Sui Blockchain, recognized as the first official grant recipient from the Sui Foundation. This technical documentation serves as the primary resource for minting sCoins Yield Bearing assets, utilizing the Trilinear Interest Rate Model for optimal capital efficiency, and participating in veSCA Real Yield Staking. Scallop brings institutional-grade features to decentralized lending. 

Scallop Ecosystem: Next-Gen Lending 

Scallop leverages Sui's object-centric architecture to offer features not possible on EVM chains.

Trilinear Model: Most protocols use a 2-stage kink for interest rates. Scallop uses a 3-stage "Trilinear" model. This allows for more granular rate adjustments as utilization spikes, protecting liquidity providers while offering competitive rates to borrowers during normal market conditions.

sCoins: These are market coins (e.g., sSUI, sUSDC) that represent a user's supply position. Unlike static receipt tokens, sCoins physically accrue value over time as interest is paid into the pool, serving as a composable "money lego" for other Sui dApps.

Soft Liquidations: Scallop prioritizes borrower safety. The liquidation engine allows for partial liquidations or grace periods, reducing the penalty users pay during minor market wicks compared to the "hard" liquidations of older protocols.

SDK, Flash Loans & PTBs 

The infrastructure of Scallop Protocol Official utilizes Sui's Programmable Transaction Blocks (PTBs).

Zero-Fee Flash Loans: Developers can utilize the Scallop SDK to borrow liquidity for a single transaction block without paying a protocol fee (0.00% fee). This makes Scallop the primary venue for arbitrage bots on Sui.

Composable PTBs: Users can bundle multiple actions—Supply SUI + Borrow USDC + Swap USDC to SUI + Loop—into a single atomic transaction using Scallop's frontend or SDK.

Aftermath Integration: The platform embeds an aggregator (powered by Aftermath Finance) directly into the UI, allowing for seamless "Zap" and "Swap" functionality when managing collateral.

SCA, veSCA & Incentives 

The reward system gamifies the lending experience via vote-escrow mechanics.

veSCA: By locking $SCA tokens, users receive veSCA. The longer the lock, the more veSCA received. Holders get 1) Governance voting rights, 2) Boosted borrowing rewards (APR boost), and 3) A share of protocol revenue via the Loyalty Program.

Borrowing Incentives: Scallop frequently incentivizes borrowers with $SCA emissions to stimulate loan demand, often resulting in "net positive" borrowing rates (where rewards > interest cost).

Referral Program: Scallop has an on-chain referral system where referrers earn a percentage of the borrowing fees generated by their referees.

Security, Audits, and Backing 

Scallop Protocol Official is heavily audited and backed by the ecosystem creators.

Audits: The protocol has completed audits with top-tier firms including Zellic, OtterSec, and MoveBit. The move language architecture inherently prevents reentrancy attacks common in Solidity.

Sui Foundation: Scallop was the first DeFi protocol to receive an official Developer Grant from the Sui Foundation, signaling strong due diligence and alignment with the network's roadmap.

Oracle Security: Scallop utilizes a robust oracle configuration (often Pyth or Switchboard) with strict staleness checks to prevent price manipulation attacks.

Official Documentation & Reference 

Access the verified Scallop Protocol Official technical resources below:

App: app.scallop.io

Docs: docs.scallop.io

SDK: github.com/scallop-io/sui-scallop-sdk

Twitter: x.com/Scallop_io

Frequently Asked Questions 

What are sCoins? sCoins Yield Bearing tokens (like sSUI) are the receipt you get when you lend money on Scallop. They grow in value over time as borrowers pay interest.

What is the benefit of locking SCA for veSCA? Locking SCA gives you veSCA Real Yield Staking power. This boosts your farming rewards on borrowed assets and gives you a cut of the protocol's revenue.

How does the Trilinear Interest Rate Model work? It is a 3-stage interest rate curve. It keeps rates low when utilization is low, raises them moderately as it increases, and spikes them sharply only when liquidity is critically low, optimizing for both usage and safety.

Are Flash Loans free on Scallop? Yes, Zero-Fee Flash Loans Sui are a core feature. You only pay the gas fees for the transaction, not a percentage of the loan amount.

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Scallop Protocol (SCA): The Institutional-Grade Lending Market on Sui 2026

In the high-performance DeFi landscape of 2026, the Sui blockchain has established itself as a dominant layer for financial activity, and Scallop Protocol sits at the very center of this ecosystem. As the premier "Money Market" on Sui, Scallop has evolved beyond a simple lending dApp into a comprehensive liquidity layer that powers institutional and retail finance alike.

Whether you are seeking the best Sui lending market to earn passive yield on your SUI and stablecoins, or you are a developer looking to utilize Scallop flash loans for arbitrage, understanding this protocol is mandatory. This guide analyzes why Scallop is the top-rated liquidity protocol of 2026, the mechanics of its interest-bearing "sCoins," and how to maximize returns through the veSCA rewards model.

The Scallop Advantage: Institutional-Grade on the Move

Scallop distinguishes itself from competitors (like Navi) by focusing heavily on "Institutional-Grade" quality. In 2026, this means more than just high TVL; it means robust security and programmable compliance.

Trilinear Interest Rate Model: Unlike standard linear models that cause interest rate volatility, Scallop uses a sophisticated trilinear model. This optimizes the cost of capital for borrowers while protecting the yield for lenders, ensuring stability even during high utilization periods.

The Move Advantage: Built natively on Sui Move, Scallop leverages the language's object-centric security. This makes secure crypto loans possible with a much lower risk of the reentrancy attacks that plagued Ethereum-based protocols in previous years.

Composability: Scallop is the "Lego block" of Sui. Its open-source SDK allows other protocols (like aggregators and yield farms) to build on top of its liquidity, making it the deepest source of funds on the network.

sCoins: Market-Bearing Assets

A core innovation for 2026 yield farmers is the sCoin (Scallop Market Coin). When you supply assets to Scallop, you do not just get a static receipt; you receive an sCoin (e.g., sSUI, sUSDC).

Auto-Compounding: sCoins are interest-bearing derivatives. The value of sSUI increases relative to SUI every second as interest accrues from borrowers.

DeFi Utility: In 2026, sCoins yield farming is a dominant strategy. You can take your sUSDC (which is already earning lending interest) and deposit it into a liquidity pool on a DEX like Cetus or Aftermath to earn trading fees on top of your lending yield.

Zero-Cost Collateral: Because sCoins represent your deposit, they are fully liquid. You can transfer them to cold storage without closing your lending position.

SCA and veSCA: The Governance & Yield Engine

The SCA token staking mechanism is the economic engine of the protocol. Scallop has adopted the "Vote-Escrow" (ve) model to align incentives.

veSCA Powers: By locking SCA tokens, users receive veSCA. This is non-transferable but grants voting rights on protocol parameters, such as which pools receive SCA emissions.

Real Yield: A portion of the protocol's revenue (generated from the spread between lending and borrowing rates) is distributed to veSCA holders. This makes SCA a productive asset rather than a speculative one.

Borrowing Boosts: Holding veSCA often boosts the rewards you receive when borrowing assets, effectively lowering your net interest rate.

How to Borrow USDC on Sui with Scallop

For users looking to leverage their positions, Scallop offers the smoothest borrowing experience in the ecosystem.

Supply Collateral: Connect your Sui wallet (e.g., Sui Wallet, OKX) and deposit an asset like SUI or vSUI (Liquid Staking Token).

Enable Collateral: Toggle the "Collateral" switch on your deposit.

Borrow Assets: Navigate to the "Borrow" tab. You can now borrow USDC on Sui against your SUI.

Manage Risk: Scallop provides a "Risk Level" indicator. In 2026, advanced "Soft Liquidation" mechanisms help protect borrowers from total loss during flash crashes by liquidating only enough collateral to restore health factors.

Flash Loans for Developers

Scallop is one of the few protocols on Sui offering native Scallop flash loans. This feature allows developers and bots to borrow millions of dollars in liquidity with zero collateral, provided the loan is repaid within the same transaction block. This is critical for keeping the Sui markets efficient, as it allows arbitrageurs to equalize prices between DEXs instantly without needing massive upfront capital.

Conclusion: The Backbone of Sui DeFi

As we navigate the 2026 crypto market, Scallop Protocol stands as the foundational pillar of the Sui ecosystem. It combines the high-speed execution of the Sui network with the financial sophistication of Wall Street. For users wondering about Scallop airdrop eligibility (often tied to seasonal ecosystem rewards) or simply looking for the safest place to park their assets, Scallop offers a professional, high-yield environment that sets the standard for decentralized money markets.