SushiSwap, a DeFi project that has achieved incredible growth in a very short time, now has new management and will be led by FTX CEO Sam Bankman-Fried.
Through his Twitter account, the founder of the protocol DeFi Sushi Swap, who hides under the pseudonym Chef Nomi, surprisingly informed the community of enthusiasts that he would be liquidating all his SUSHI tokens to exchange them for Ethereum (ETH). According to his statements, the liquidation of the Tokens This will allow Chef Nomi to “stop worrying about the price and focus on the technical aspects of the project,” although many are already claiming that this is simply an exit scam, as it is a project with an unaudited contract and a developer who remains anonymous.
Following the massive token sale, the price of SUSHI fell by more than 70%, going from a value of $4,4 USD to less than $1,2 USD per unit. However, after it became known that Sam Bankman Fried, CEO of FTX, will be leading the development of the project, the token price recovered again. As of this writing, SUSHI is worth $2,81 USD according to CoinMarketCapChef Nomi's SUSHI token sale is valued at around 17,971 ETH, which currently represents approximately $6,3 million.
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What is SushiSwap and how important is it?
The frenzy for DeFi platforms and protocols yield farming is far from over. The accessibility and reward system offered by these protocols has seduced a large part of the crypto community, who see in these projects an opportunity to generate large profits and multiply their income. To prove this, you only have to take a look at the growth of DeFi in recent years. In 2017, these platforms had just over 5 million dollars in locked value, but today they already enjoy more than 8 billion dollars, a growth that is undoubtedly excessive and exponential.
And it is thanks to this excessive growth and the great opportunities offered by this type of finance, that developers around the world are leaning towards the design of new protocols, capable of offering new and greater benefits to their users. In the case of SushiSwap, the founder of the project indicated that it was a protocol where users can exchange their tokens. ERC-20, apply yield farming strategies to multiply your profits and generate income in SUSHI tokens by simply doing staking and participate within the platform. However, just 11 days after its launch, its founder, Chef Nomi, decided to liquidate his tokens and abandon the direction of the project to supposedly dedicate himself to its development.
Yes, SushiSwap is a new project that during the first 5 days of its life managed to lock more than 1.000 billion dollars within its protocol, an incredible event that sparked the interest of many enthusiasts and several others against. For example, Uniswap, which would be SushiSwap's rival, declared war on it upon sensing that this project could steal more than 75% of its liquidity, since the assets with which it participates within SushiSwap are actually Uniswap tokens.
The evolution of Uniswap and its risks
According to one publication On Medium, SushiSwap is a fork and evolution of Uniswap that integrates new features and improvements aimed at providing great benefits to its community. Therefore, the growth of SushiSwap has allowed Uniswap to achieve a better position within the DeFi ecosystems, with the largest amount of total value locked (Total Value Locked – TVL) within the project according to DeFi Pulse.
But in reality, the way this project works can put stability and governance at risk in Uniswap, since in SushiSwap there is no proper contract that establishes the withdrawal or burning of tokens anchored to SUSHI in Uniswap to this platform. This situation is known by the developers as “Vampire Attack”, an attack on DeFi protocols that are dependent on each other for liquidity.
According to the explanations of Adam Cochran, a former SushiSwap investor, this type of attack can lead to the downfall of Uniswap as users can permissionlessly pull liquidity from Uniswap to SushiSwap.
Still, despite the risks and the major setback the project suffered with the departure of its founder, the SushiSwap community still hopes that the project will recover in the short term in the hands of Bankman–Fried, and may it continue to prosper for the benefit of all its participants.
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