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Uniswap and SushiSwap have a different path day by day, which includes the very important Layer 2 plan, token economic model, new products and community connections in the future.
Original title: “Uni to the left, Sushi to the right”
Author: Blue Fox Notes
Uniswap is the true pioneer of DEX, and SushiSwap is a community project developed by copying Uniswap. Sushi’s battle against Uni’s liquidity leveraging was the most thrilling battle of DeFi last year. Now the two are on different development paths.
Uniswap’s 2021 has the following highlights:
Iteration of AMM model
Although AMM was first proposed by Bancor in the field of encryption, Uniswap is the only one that really promotes it. Uniswap gives AMM life, and AMM is also the foundation of Uniswap. In 2021, Uni will still prioritize the upgrade and iteration of AMM.
This will be reflected in Uniswap’s V3. The specific details of V3 are still unknown, but from the information it revealed, it attempts to improve the AMM experience of traders and liquidity providers, thereby enhancing the efficiency and flexibility of capital.
The 2021 annual meeting is the year that Layer 2 will land and explore. At present, Loopring and ZKSwap already have Layer 2 DEX, and Synthetix is also adopting Optimism’s solution. It is said that Uni also plans to adopt Optimism’s Layer 2 solution. If Optimism’s solution is adopted, its transaction costs can be greatly reduced and its transaction speed can be accelerated. However, the Optimistic Rollup solution is easy to integrate, but there are certain trade-offs in security, and the withdrawal period of funds is also long, which is not perfect.
Uniswap may adopt Optimistic Rollup technology, Optimism
Blue Fox Notes estimates that Uniswap will iterate its Layer 2 solution in the future. When the time is right, it is possible to adopt ZK Rollup’s scalable solution.
Uniswap’s governance is the key to Uniswap’s sustainable development.
Uniswap’s governance proposal, Uniswap
It can be seen from the above that Uniswap is more like the Shaolin School, which focuses on practicing internal skills and hopes to always be in a leading position on the road to DEX.
If the previous Sushi is a complete copy of Uni, now, Sushi has begun to take a different path of development. It tries to make more connections with various DeFi projects to find its own way.
Mirin is the V3 of the Sushi protocol. Its goal is very big, trying to increase liquidity significantly (10-20 times increase), so that it not only ranks in the forefront of the DEX field, but also ranks in the forefront of the entire crypto exchange. The method to achieve this goal is as follows:
The franchise pool is an expansion plan of SushiSwap’s liquidity. Some exchanges (such as Binance) integrate the sushi protocol to provide its users with benefits as a liquidity provider. Liquidity tokens are added to the third-party platform, that is, the subpool, and the subpool will be transferred to the mainpool, that is, it will be transferred to the overall liquidity of SushiSwap.
For the exchange, by providing users with the possibility of more income, it is beneficial to retain users, while for sushi, it can obtain more liquidity and have a better user experience.
Example image of SushiSwap’s subpool, SushiSwap
Double-benefit governance token
MIRIN allows its franchise pool to have a double income function. In addition to earning income on Sushi, the third-party platform can also provide its users with the subpool’s governance tokens to obtain higher returns. MIRIN provides exchanges with options for seamless integration of SushiSwap liquidity provision and mining.
KP3R-supported revenue rebalancing
SushiSwap’s v3 plan provides automatic revenue rebalancing tools, supported by KP3R. Keeper performs various calculations and comparisons in order to seek the highest profit, and automatically switches to these trading pairs.
Integrated one-click Zap function
By integrating the Zap tool, the gas cost for users to provide liquidity can be reduced. It can provide: one-click exchange + increase liquidity + mining; one-click migration of liquidity from Uniswap/Balancer/Curve + mining; one-click switching Token pool to get higher APY.
New LP Curve option
When providing new LPs, MIRIN suggests that more market-making modes can be provided. SushiSwap currently uses Uniswap’s constant product, and it plans to add new options: rebalancing Curve (that is, the mode of balancer), Bonding Curve (that is, curve mode).
BentoBox originally wanted to do lending, but later expanded its scope from lending to a larger scope. The current BentoBox is a single vault (Vault) holding all tokens. In addition to loan contracts, it can also serve other agreements. Anyone can build an extension based on the BentoBox fund library: once a token is approved by the fund library, use BentoBox to build any protocol without re-approving each token; internal token transfer (including between different protocols using BentoBox) Gas fees for advanced transfers (such as one-to-many transfers) will be lower; user funds and agreements can be separated internally. Only the agreement approved by the user can access the user’s funds.
Demo picture of BentoBox, BentoBox
The first product based on BentoBox is lending. Anyone can use a token and a mortgage token to create a token pair, similar to creating a liquid token pair on SushiSwap; users can earn income by providing assets; users can borrow assets by providing collateral. The target utilization rate of its assets is between 70-80%, which is the percentage that can be borrowed from the total supply of assets.
In BentoBoX lending, users create a loan pair in isolation, and therefore the risk is isolated. It will use on-chain and off-chain oracles. The interest rate is also dynamic and mainly depends on the utilization rate of its assets. If the utilization rate is low, the interest rate will be low, and if the utilization rate is high, the interest rate will be high. Supply and demand. The assets provided can also be used for flash loans to provide suppliers with additional revenue.
For Sushi holders, there are two captures of fees, the compound interest paid by the borrower, of which 9% will go to SushiBar users (90% goes to the asset provider, 1% goes to the developer); and That is, when loan liquidation occurs, 9% of its liquidation proceeds will be given to SushiBar (90% to the asset provider, 1% to the developer). This means that if Bentobox can succeed, it will be beneficial to sushi holders.
New domain name + IPFS
SushiSwap will launch a new domain name in 2021, the purpose is to show that it is not only DEX, but will also enter more DeFi fields. In addition, it also plans to support IPFS.
Integration of cross-chain AMM supported by Rune/Moonbeam; MEV integration through ArcherDAO; incentives for the construction of SushiSwap for wallets, dApps and protocols.
SushiSwap plans to adopt the ZK Rollups solution, which is currently following up on Matter Labs’ technical solution. However, there is no final decision yet.
Onsen is an important measure of SushiSwap to connect the power of the community. The plan will give support to some projects with low market value and encourage them to provide liquidity on SushiSwap and obtain more development opportunities. For example, Basis, Hegic, etc. also participated in the Onsen project.
SushiSwap’s Onsen liquidity mining, SushiSwap
Uni to the left, Sushi to the right
The roads of Uni and Sushi are gradually different. These include the adoption of the very important Layer 2 solution in the future, the token economic model, new products, and community connections.
In terms of Layer 2, if according to the current plan, Uniswap may adopt Optimistic Rollups, while SushiSwap uses the zk-rollpus solution. If SushiSwap adopts this solution, it means that other projects in the YFI ecosystem (such as hegic, alpha, cream) …..) Basically, this scheme will also be adopted to ensure its composability.
On the product development route, Uniswap focuses on the V3 version of the AMM model, which is more like practicing Shaolin’s internal skills behind closed doors; while SushiSwap began to consider bentobox’s lending, Mirin, cross-chain and other DeFi product exploration, more like A player trying to integrate the best of hundreds of families, it is trying to get rid of the shadow of copying SushiSwap.
In terms of the token economic model, sushi tokens can currently capture transaction fees, while Uni is still in a state of development.
From their roadmaps, we see two completely different evolution paths. One is trying to explore and practice more deeply in the AMM mode of DEX, which is a kind of in-depth direction; while the other is trying to find a broader world outside of DEX and trying to exert the power of the community, which is a horizontal Exploration.
These two directions have the value of exploration. Ultimately, in terms of depth, DEX still has a lot of room to dig; in terms of horizontal expansion, once a new product can change the current pattern, there will be unexpected gains. , As for that kind of path is more promising, maybe everyone’s answer will be different.