The craze for decentralized Finance (DeFi) boomed this summer with several new projects and a lot of food names. The craze also saw popular decentralized exchange Uniswap getting forked to SushiSwap, which is being designed to resemble the next step forward in the Uniswap protocol design.
The idea is to present Uniswaps’ features along with the addition of community-oriented governance.
SushiSwap protocol developed by Chef Nomi on Aug 26 was an instant hit and saw $300M worth of tokens getting locked up within the first 24 hours of launch.
The protocol is quite similar to that of Uniswap with the main difference being SusiSwap’s governance token dubbed SUSHI that was designed to incentivize liquidity on migration from Uniswap to the newer protocol.
In less than a week, SushiSwap has already lured more than $1.4 billion in locked funds from Uniswap with the promise of enormous returns for liquidity.
SUSHI migration en route
Recently the SushiSwap community has approved a move that will see a significant portion of liquidity shift from Uniswap to its native platform. Approximately 87% of votes were in favor of the migration.
Uniswap currently holds about $180 million worth of liquidity in the ETH/SUSHI pair on Uniswap. With over $1.4 billion already locked, the move would place SushiSwap right behind Unsiwap and tied with Maker and Aave.
Like most of the new DeFi projects being launched, SushiSwap was also launched with very few security audits. A review published by smart contract security company Quantstamp has even spotted several vulnerabilities, but none of them were critical in nature.
Jaye Harrill, Quantstamp communications manager, said:
“On the surface Sushiswap looks like another nightly-built vegetable farm with endless APY launched by the anonymously named NomiChef. But looking deeper we find a highly engaged community on discord genuinely discussing the growth of the very project they are invested in.”
On the other hand, an actual audit conducted by security company PeckSheild did not find any security issues or vulnerabilities.
SushiSwap is aiming to provide greater decentralization and the protocol’s anonymous founder has also allocated 10% of Sushi’s token supply to be awarded to the platform’s developers and founding members to bring the project to life.
As of now, SushiSwap has $1.4B total value locked (TVL), and Uniswap has $1.9B TVL, which means Uniswap’s TVL could drop to half a billion dollars if people migrate to SushiSwap when it launches.
Only time will tell if SushiSwap is in fact healthy competition for Uniswap to grow, and maybe even launch its own governance token.