Sushiswap migrates, what next for Uniswap?
Vampire Mining is no longer just mere words, it's real!
And now it’s official, Sushiswap has successfully completed its liquidity migration of Uniswap.
This move makes breaths life into the new concept termed “Vampire Mining” or better still, let’s just call it what it is - hostile takeover!
So what next? Well, as we know, Sam Bankman-Fried, the mercurial CEO of FTX exchange took over from the disgraced Sushiswap “Master Chef'". And if there is anything that is clear about him is that he moves pretty fast.
Sam announced a few hours back that the migration is done, so let the exodus begin!
Uniswap liquidity halves almost immediately as people get another choice in AMM
I know we’ve all seen other Uniswap copycats like Mooniswap, 1inchexchange and a few others try to shake off the DEX unicorn. It is always usually easy to fork or copy a code. But never easy to convince a tribal community to follow you. But in Sushiswap, the case looks different. Right after the migration, over $800 million was wiped off Uniswap liquidity pools straight into Sushiswap.
This is what it looks like presently on Uniswap:
Data from DeFi Pulse
More than 75% drop in Total Value Locked - TVL in a few hours. Not any of these copycats have been able to stage this kind of liquidity heist on Uniswap.
Will it continue? Well, I think it’s still too early to tell. However, Uniswap may be planning something interesting. Hayden Adams, Uniswap founder tweeted while the Sushiswap migration was going on
That looks to me like Uniswap’s coin - UNI. And if that is exactly what I am thinking, it means at least, Uniswap in its race to launch Version 3 of its AMM would have at least knocked off one of SushiSwap’s strongest selling point - the SUSHI token which gives liquidity providers more incentive over Unsiwap’s solo trading fees sharing.
UNI may become the hook to drag Liquidity Providers back to Uniswap
Never forget SushiSwap criticized Uniswap and established itself with the “Fair Launch” mantra. Meaning instead of raising VC funds and allocating tokens to capital providers for platform development, it launched with no pre-mine, no VC funds, no token reserve for team or platform developers. Huh! How could I have forgotten the dev share? That’s right. Chef Nomi reserved some SUSHI token for platform development and had sole control of it. Let’s just say he couldn’t resist the taste $10 million USD as he quickly dumped his holdings for ETH just less than a week after claiming all he is doing is for the community. SUSHI price dumped hard and from all indication may never reach its ATH again. We will discuss this in another post.
So, if Uniswap decides to launch its UNI governance token, even though we know it may allocate some portion to VC’s and possibly founder share, I expect it to play its game well. Distribute fairly and let the community own the token as we see with YFI.
If it does this well, SushiSwap LPs may decide to make a U-turn and come back to their darling Uniswap to farm their precious UNI tokens.
In all, it’s a net positive for the community and many people were on board to participate in sweeping DEX revolution. These are surely interesting times.
I hope you liked my analysis. Enjoy the rest of your day