What Is Bucket Protocol? Sui's CDP Stablecoin Explained
Bucket Protocol lets you borrow USDB against SUI, LSTs or BTC on Sui. How its CDPs, PSM, savings and liquidations work, V1 vs V2, and the risks.
Bucket Protocol is a CDP stablecoin protocol on Sui: you lock collateral such as SUI, liquid staking tokens or BTC in a vault and borrow USDB, an over-collateralized dollar stablecoin, against it. Bucket has run on Sui since 2023, first with a stablecoin called BUCK. In September 2025 it shipped a major upgrade (V2) and renamed the stablecoin USDB. DefiLlama counted about $41.1 million across Bucket's two CDP deployments on 31 October 2026.
How Bucket works
Bucket follows the collateralized debt position (CDP) design that MakerDAO made famous on Ethereum. You deposit collateral, and the protocol mints new USDB to you as a loan. Your position stays healthy as long as the value of the collateral stays above a minimum collateral ratio (MCR). Repay the USDB plus interest and you get your collateral back.
Under V2, each collateral type is an isolated CDP with its own MCR, its own interest rate and its own mint cap, according to Bucket's CDP docs. Interest is a fixed annual rate per collateral that accrues in real time. V2 dropped the one-time borrow fee that V1 charged. On-chain vault settings we read on 31 October 2026 set the MCR at 110% for SUI, the main SUI liquid staking tokens and BTC, 130% for WAL and several Scallop deposit tokens, and 150% for SCA and some other Scallop tokens.
A 110% MCR means $1,100 of SUI can back at most $1,000 of USDB. That is a thin buffer, so a short drop in the SUI price can push a fully borrowed position into liquidation. Our guide to liquidation prices shows how to work out where that line sits before you borrow.
What is USDB?
USDB is Bucket's stablecoin, described in its docs as "a decentralized, over-collateralized stablecoin issued by Bucket on Sui." It replaced BUCK in the Bucket Major Upgrade announced on 16 September 2025. BUCK holders swap 1:1 into USDB with no fee, and legacy CDPs migrate in one click with the same collateral and ratio.
USDB reaches users through two main routes. Borrowers mint it against collateral in a CDP. Anyone can also mint it 1:1 against USDC or bridged USDT through the peg stability module (PSM), covered below. On-chain data showed about 11.8 million USDB in circulation on 31 October 2026, and about 1.74 million USDB of that was CDP debt, so most of the supply did not come from loans against volatile collateral. DefiLlama's stablecoin tracker still lists Bucket's coin under the old BUCK name, with a different figure (about $25.9 million), so check which number a source is quoting.
If you are new to the differences between fiat-backed, crypto-backed and algorithmic designs, our stablecoins explainer covers them. USDB sits in the crypto-backed group, alongside DAI and USDS, not with algorithmic stablecoins.
What collateral does Bucket accept?
The V2 collateral list in Bucket's open-source SDK covers a wide spread of Sui assets:
- SUI and the liquid staking tokens haSUI (Haedal), afSUI (Aftermath) and vSUI (Volo)
- BTC and xBTC
- WAL, the Walrus token, and SCA, Scallop's token
- Scallop sCoins, the interest-bearing receipts Scallop issues to lenders (sSUI, sUSDC, sbUSDT, sWAL, sDEEP, sbETH, sSCA)
- Typus TLP, the liquidity token of Typus's perps vault
Each of these adds its own risk. A liquid staking token can trade below its SUI value, and an sCoin depends on Scallop's lending markets staying solvent. On 29 April 2026, after an exploit of Aftermath's perps product, crypto press reported that Bucket set its afSUI mint cap to zero as a precaution; Bucket itself was not exploited. The afSUI vault showed a 20,000 cap again on 31 October 2026. For background on the LSTs, see our explainers on Haedal haSUI and Volo vSUI.
Bucket V1 vs V2
DefiLlama lists two Bucket entries: Bucket CDP, the legacy V1 contracts (about $14.2 million on 31 October 2026), and Bucket Protocol V2 (about $26.9 million). The V2 upgrade removed several mechanisms that V1 borrowed from Liquity, the Ethereum CDP design.
| Feature | V1 (legacy, BUCK) | V2 (USDB, since September 2025) |
|---|---|---|
| Stablecoin | BUCK | USDB (BUCK migrates 1:1) |
| Borrow cost | One-time 0.3% borrow fee plus a base rate and interest | No one-time fee; fixed annual interest set per collateral |
| Collateral structure | Shared rules, 110% MCR | Isolated vault per collateral, each with its own MCR and mint cap |
| Liquidations | The Tank (a stability pool) absorbed liquidated debt | Protocol-run liquidation, with an insurance fund for bad debt |
| Redemptions | Yes: BUCK redeemable at face value against the lowest-ratio positions | None |
| Recovery Mode and minimum debt | Yes | Removed |
| Peg stability module | USDC and USDT, 0% in, 0.3% out | USDC 0% in; suiUSDT 0.05% in; 0.30% out |
| Savings | Not part of the core design | sUSDB earns the Base Savings Rate |
| DefiLlama TVL, 31 Oct 2026 | About $14.2 million | About $26.9 million |
Dropping redemptions changes how the peg holds. In V1, anyone could redeem BUCK for $1 of collateral from the riskiest borrowers, which put a floor under the price. V2 has no redemptions, so the PSM and borrower demand do that job instead. The V1 sources here are Bucket's archived docs from July 2025.
How liquidations work in V2
A V2 position becomes liquidatable as soon as its collateral ratio falls below the MCR. Bucket's liquidation docs say the protocol then seizes all of the position's collateral: it flash-mints USDB, takes the collateral, sells it and repays the debt. Because the whole position goes, the borrower's loss is roughly the gap between the MCR and 100% of the debt, about 10% for a 110% vault.
When collateral sells for less than the debt, an insurance fund paid for out of protocol revenue covers the bad debt. That fund has a finite size, which matters if many positions fail at once. Our explainer on DeFi loan liquidations compares this full-seizure model with the partial liquidations used by Sui lenders such as NAVI and Suilend.
The PSM and USDB savings
The peg stability module swaps USDB 1:1 with USDC and bridged USDT. According to Bucket's peg docs, swapping USDC in is free, bridged USDT in costs 0.05%, and swapping out costs 0.30%. When USDB trades below $1, arbitrageurs can buy it cheap and swap it out of the PSM for USDC, which pulls the price back up while the PSM still holds reserves.
Holders can stake USDB to receive sUSDB, which earns the Base Savings Rate through a rising exchange rate, with no fee and no lock-up. Putting sUSDB into the Savings Pool adds SUI rewards on top. Bucket shows the current rate only in its app, and we could not confirm a stable figure, so we do not quote one here. The rate is set by the protocol, unlike interest you earn by lending, which our guide to earning yield on stablecoins covers.
The BUT token
BUT is Bucket's native token, with a maximum supply of 1 billion. Bucket's tokenomics post from 30 December 2024 set the token generation event for 13 January 2025 and described the project as VC-free, funded partly by a Sui Foundation grant. Staking BUT gives non-transferable deBUT at 1:1, which carries governance weight. Unstaking takes 30 to 365 days, with an early-exit penalty that falls from 70% to zero, paid to remaining deBUT holders.
CoinGecko showed about 422 million BUT circulating on 31 October 2026, at a price far below its May 2025 high.
Risks
- Liquidation risk: 110% MCRs leave little room, and V2 seizes the whole position.
- Collateral risk: LSTs, sCoins and TLP depend on other Sui protocols. A problem at Haedal, Scallop or Typus flows into Bucket's vaults.
- Peg risk: with no redemptions, the peg leans on the PSM's reserves. During the market crash on 10 October 2025, CoinGecko recorded a USDB low of $0.878, most likely a short wick in thin trading. Our article on stablecoin depegs explains why these happen.
- Smart-contract risk: V2 was audited by Quantstamp, Hashlock and MoveBit in August and September 2025, per Bucket's docs, and a HackenProof bug bounty pays up to $500,000. We found no exploit of Bucket in 2025 or 2026.
- Access: Bucket's terms exclude US and Taiwan residents.
Bucket vs MakerDAO (Sky)
Bucket is far smaller than Sky, the rebranded MakerDAO. DefiLlama put Sky's lending TVL at about $5.0 billion on 31 October 2026, more than 100 times Bucket's total. Both run a PSM and a savings rate, but Sky's DAI and USDS hold billions in supply, while USDB holds millions. Our MakerDAO alternatives on Sui guide compares the two models and the other stablecoins on Sui, and What is USDS? covers Sky's newer stablecoin. To see where Bucket ranks among Sui protocols, see our Sui TVL breakdown.
JewelSwap does not issue a stablecoin or run a CDP on Sui. Its Sui products are Scallop-based leveraged farms, the JWLSUI liquid staking design and NFT-collateralized lending.
Frequently asked questions
What is Bucket Protocol?
Bucket Protocol is a CDP stablecoin protocol on Sui. Users lock collateral such as SUI, liquid staking tokens or BTC and borrow USDB, an over-collateralized dollar stablecoin. DefiLlama counted about $41.1 million across Bucket's V1 and V2 deployments on 31 October 2026.
What happened to BUCK?
Bucket renamed its stablecoin from BUCK to USDB in the V2 upgrade announced on 16 September 2025. BUCK swaps 1:1 into USDB with no fee, and legacy positions can migrate with the same collateral and ratio.
Is USDB backed?
USDB is backed by over-collateralized CDP positions and by USDC and bridged USDT held in the peg stability module. On 31 October 2026 most of the roughly 11.8 million USDB in circulation came from routes other than CDP loans.
Can you redeem USDB for collateral?
Not in V2. The upgrade removed redemptions, which V1 offered for BUCK. Today the peg relies on the PSM, which swaps USDB 1:1 with USDC or bridged USDT for a small fee.
What is sUSDB?
sUSDB is the token you receive when you stake USDB in Bucket's savings module. It earns the Base Savings Rate through a rising exchange rate, with no fee and no lock-up, and can be placed in the Savings Pool for extra SUI rewards.
Educational only, not financial advice. Figures from DefiLlama, Bucket's docs and on-chain data, checked 31 October 2026; DeFi carries smart-contract, liquidation and depeg risk.
