SushiSwap gained massive notoriety and rapid success when it started off by offering outsized rewards for those who got in before the automated market maker (AMM) actually started making markets.
The promise was 1,000 SUSHI tokens per block for liquidity providers (LPs) who committed before it went live, but things are about to change on the controversial project as the new offering is being cut by 90 percent to 100 SUSHI.
The early offer saw SushiSwap rocket into contention as almost $1.6 billion worth of various crypto assets were quickly locked in. However, those rewards have now been cut as of block Ethereum block 10850000 leaving the reward now significantly smaller.
The question now is whether SushiSwap will still hold its pace in the high flying realm of DeFi and yield farming after this massive cut and if it might not just be a death knell for the project.
SushiSwap successfully migrated over $800 million in crypto assets from rival automated market maker Uniswap on Sept. 9, using Uniswap tokens entrusted to the upstart project by users seeking those SUSHI block rewards.
Liquidity in SushiSwap currently stands at $1.46 billion in crypto assets, according to the site’s community-built block explorer, SushiSwap Vision. Uniswap meanwhile has $539 million, according to DeFi Pulse.
Part of the controversy from the project came when the former head of the project, known as Chef Nomi, suddenly left with some $14 million of assets not truly owned to him. This caused many to call this an exit scam, but at the end of the week, the money was quickly returned.
Understanding the changes
SushiSwap’s community is still looking for more changes to the block rewards but they have been stymied so far. The SUSHI community appears to want highly specialised control, though, and that could bode ill for low-governance models currently in the works.
SushiSwap’s new leadership – a board of nine people elected by the community earlier this month, published a new blog post about the grand opening of the project and its immediate agenda.
The post read:
“Being a fork where we are only copying recipe isn’t enough for us to succeed and go forward everyone knows that. We won’t become the best DEX without new features and compelling tools for our LP – Traders and Sushi holders.”