Uniswap Tanks After SushiSwap Successfully Migrated with Over $1 Billion in Liquidity
SushiSwap is now live after the migration was completed in the wee hours of Thursday. And with the official launch of the Uniswap clone, SushiSwap has sucked out all the liquidity and volume from the project that has been up until today, leading the market.
1) well the migration is done; sushiswap is livehttps://t.co/c2JGZJ65Ch
— SBF (@SBF_Alameda) September 9, 2020
The legal billion dollar-heist resulted in Uniswap’s TVL tanking from $1.8 billion — previously among the top four DeFi projects to fall to the 9th spot with a 75% reduction — to almost $350 million of total value locked in now, as per DeFi Pulse.
A fork of Uniswap, SushiSwap, migrated the liquidity into its own protocol, currently recording $1.32 billion with the volume on the DEX climbing to $120 million.
Wrapped Ether is contributing the most to the volume followed by SUSHI, USDT, USDC, and YFI, much like Uniswap.
Unlike Uniswap, SushiSwap had its own token, and it allowed traders to pour tokens representing deposits in Uniswap liquidity pools into SushiSwap to earn SUSHI rewards. Keeping them through migration also got them extra tokens.
The migration involved swapping Uniswap LP tokens for the underlying asset and putting those tokens on SushiSwap.
Uniswap is currently recording $530 million worth of liquidity, down from nearly $2 billion liquidity on Sept. 4th. Daily volume on the platform has also gone down under $400 million from over $950 million on Sept. 1st.
Uniswap’s figures had come back to where it was before SushiSwap entered DeFi but are still up 50% from $285 million before the copycat was launched.
“Liquidity has no loyalty,” said yEarn creator Andre Cronje, who is against the narrative that SushiSwap took TVL from Uniswap because “Uniswap TVL pre/post Sushiswap remains unchanged. Sushiswap simply took their liquidity locusts with them. Only the liquidity locusts win.”
SushiSwap DEX, which is just shy of a fortnight old, has already experienced years’ worth of drama. Just over this past weekend, the original creator of the project, an anonymous Chef Nomi, sold their dev shares and handed over the control of the protocol to FTX CEO Sam Bankman-Fried, who has been involved in farming SUSHI right from the start.
As expected, the liquidity fragmented, but still, it all turned out good for DeFi in the end. As analyst Ceteris Paribus said,
“Honestly thought Sushi would just make things worse for traders, but uniswap liquidity is 2x since this and sushi has >$1B. Quite impressive…”
SUSHI token is also enjoying market enthusiasm and bullishness as it rebounds from its $1.2 low to over $3. At the time of writing, SUSHI was trading at $2.69 as per CoinGecko.