SUSHI’s defeat is set! Is it possible to come back from the dead?

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Editor’s note: The turning point for Sushiswap from being a lot of attention to being worthless was the sale of Sushiswap’s anonymous core developer Nomi. In fact, whether ICO or DeFi, its genes are the genes at the bottom of the blockchain, that is, consensus building. When the consensus is broken, the project will naturally go downhill. At present, it is difficult for Sushiswap to rebuild consensus whether it is a repurchase or other efforts. The community’s confidence in the project seems to have been lost.

Source: Carbon Chain Value

Original author: compiled by the carbon value chain of the original team

Is decentralized finance really cooling off?

In recent days, the capricious “Sushi” Sushiswap has become the headline news in the crypto industry. The plunge on September 15 caused an uproar in the DeFi community. Many people pointed their finger at the SUSHI token return initiated by the current project leader SBF. purchase.

But in fact, the fate of “Sushi” Sushiswap’s failure was already doomed two weeks ago.

About two weeks ago, chef Nomi, an anonymous core developer of Sushiswap, suddenly exchanged millions of SUSHI tokens he held for ETH, which caused the overall liquidity of his platform to drop drastically. For many DeFi projects, this behavior by the founders is very difficult to understand. This behavior usually brings a fatal blow to the project itself, because it damages the core concept of the crypto community: confidence.

If the founder has no confidence in his project, who can trust the project?

Confidence is the core element of building the entire DeFi project and community, but this foundation was disintegrated two weeks ago, and the fate of “Sushi” Sushiswap may have been doomed since then.

Soon, the loss of community confidence was reflected in the token price. The price of SUSHI token plummeted from 5.05 USDT to 1.3 USDT that day, which triggered strong criticism from the community, including the founder of FTX, SBF. Perhaps due to the influence of public opinion, chef Nomi soon announced that he would give up the control of Sushiswap after cashing out and handed over this power to FTX founder SBF.

Is it really a wise move to buy back SUSHI tokens from the market?

The so-called “three fires when new officials take office”:

  • The first fire of SBF announced that it would continue to complete the originally designed project migration plan;
  • The second fire was even more shocking. He announced that he would airdrop 2 million SUSHI tokens to liquidity providers during the migration process! Affected by this good news, SUSHI tokens rebounded, and the price soared from close to $1 to the highest range of $3.5;
  • The third fire was the successful selection of nine multi-signature executors.

But what is unexpected is that on September 11, Chef Nomi suddenly surfaced and said that he would return all the ETH tokens previously cashed out to the community and give the entire community the right to use the money. After voting on the proposal, the community decided to use the $14 million worth of ETH to buy back SUSHI tokens.

Obviously, Chef Nomi hopes to achieve one goal through this method: to restore the community’s confidence in “Sushi” Sushiswap.

In fact, repurchase is a trading method in the traditional stock market, which refers to the behavior of a listed company using cash and other methods to buy back a certain amount of stock issued by the company from the stock market. Generally speaking, repurchase is a good signal for the market, but sometimes it is not. The purpose, purpose and effect of repurchase are often not as good as they seem. In the Defi project, some “giant whales” may “collaborate” with the project party to fool investors about the repurchase. In fact, they are just a fake shot. What they want in the end may be to reduce their holdings after the price of tokens rises.

For the “Sushi” Sushiswap project, the negative impact of repurchase has been magnified.

As the community’s confidence in the “Sushi” Sushiswap project has been hit before, the news of this repurchase aggravated investors’ dissatisfaction with the project. Some users even worried about being fooled for the second time, calling “Sushi” credit bankruptcy.

Now, many investors are preparing to sell “Sushi” SUSHI tokens, and their confidence in the new team is getting lower and lower, and the high circulation of SUSHI tokens does not seem to help. Although the current token inflation rate has been reduced by 90%, the price cannot be recovered at all.

Not only that, but the multi-signature executor selected by “Sushi” has also raised questions from the community, because two of the stakeholders Compound founder Robert Leshner and Sino Global Capital CEO Matthew Graham have invested in the SBF district. Blockchain projects Solana and Serum, SBF has always hoped to establish support for SushiSwap on the Solana blockchain outside of Ethereum, and at the same time integrate the DeFi decentralized exchange Serum built on the Solana blockchain with the Sushiswap order book, the community I am very worried that SBF will use “sushi” for personal gain and achieve its ultimate goal, using Solana’s SPL token standard to overthrow the slow and expensive ERC-20 token standard on Ethereum.

Liquidity has been hit, has SushiSwap lost its market competitiveness?

The original “Sushi” Sushiswap platform is currently not in its best state. In the past few days, the amount of locked positions on the platform has fallen sharply, and it has now reduced by nearly $500 million. At the time of writing, according to DeBank data, the locked-up volume of “Sushi” has fallen to 775.9 million U.S. dollars, a 24-hour drop of 5.32%, and has now fallen to the eighth place in the locked-up volume of DeFi projects.

SUSHI败局已定!还有起死回生的可能么?

In addition, the transaction volume of the “Sushi” Sushiswap platform also declined every day. On September 10, the transaction volume of “Sushi” hit a record of $274 million, but by September 14, the transaction volume had been reduced to $155 million, a decline Up to 43.4. As shown below:

SUSHI败局已定!还有起死回生的可能么?

The data will not lie, and the sharp cuts in economic incentives have negatively affected the total liquidity of Sushiswap. On SushiSwap, market participants can add digital currency to their liquidity pool and get rewards. Like other platforms in the DeFi market, early liquidity providers can also get rewards to guide liquidity. However, since the Uniswap migration, recent changes (reducing the number of token rewards allocated to liquidity providers by 90%, and reducing block rewards from 1000 SUSHI tokens to 100 SUSHI tokens) have resulted in aggregated liquidity on the platform The total dropped by more than 42%.

From the figure below, we can clearly see the comparison of Uniswap and Sushiswap liquidity changes during this period (Source: TradeBlock):

SUSHI败局已定!还有起死回生的可能么?

In the same period, although it has experienced small fluctuations, Uniswap, which was originally not optimistic, began to reverse its decline. At one time, it set an attractive result of US$1.12 billion in liquidity and US$468 million in transaction volume. Unlike “Sushi” Sushiswap, Uniswap did not issue governance tokens. Although its lock-up volume fell to a low of US$525 million last week, it has now rebounded to around US$1 billion, and it has always been among the top five in DeFi lock-up volume. Left and right position.

Messari CEO Ryan Selkis believes that the DeFi bubble may burst sooner than people expected. The apex of Ponzi schemes, carpet pulls, and “revenue” jumps is approaching, and ETH fees will severely erode non-whale profits.

In the short term, the various efforts currently tried by the “Sushi” Sushiswap team cannot bring much positive impact, because the community’s confidence in the project seems to have been lost. In the DEX industry, market competition is inherently cruel. When a DeFi project explodes all kinds of strange things in a short period of time, it will only shackle its own development. Although it is not impossible to make a turnaround, it is still everyone’s guess how “Sushi” does this.

At the time of writing, according to Coingecko data, the price of SUSHI token has fallen to $1.69, a 24-hour drop of 25.9%.