The harm that was inflicted by the collapse of major cryptocurrency ecosystems in the previous year is on its way to making a gradual comeback as positive actors take aggressive initiatives to reestablish investors’ faith. Principal participants from the ecosystem of decentralized finance (DeFi) got together to discuss the benefits of running trustless, interoperable, and permissionless systems.
Over thirty DeFi protocols participated in an endeavor to “permissionlessly” distribute tweets from other protocols for a period of twenty-four hours, beginning on February 6 and continuing until February 7. This served to showcase the permissionless and interoperable nature of Web3.
This campaign has contributions from a number of different projects, some of which include Yearn.finance, MakerDAO, SushiSwap, and Aave.
Despite the fact that DeFi has gained widespread recognition and big institutions have made their entry into the field, its image is still fragile owing to the numerous exploits that it has participated in.
The chief marketing officer of MakerDAO, Mamun Rashid, said that in order to fulfill the “full potential” of DeFi, there has to be a partnership between the ideas and the talent that is present in the field.
“By working together, we will be able to push the limits of conventional banking and create a financial system that is more welcoming and accessible thanks to decentralized money.”
The “spirit” of DeFi was characterized as a more collaborative environment, rather than a more competitive one, by the projects that were working together on the campaign.
According to Jared Grey, CEO of SushiSwap, the goal of the construction of DeFi is to disrupt the status quo of recognized financial frameworks, which have traditionally been known to impose hurdles and decrease economic freedom.
“By using the modularity of this cutting-edge technology, we are able to democratize the financial industry and provide tools and services that are more egalitarian, safer, and more transparent to an audience on a global scale.”
According to what Grey stated, the obligation to represent the genuine meaning of Defiantly Fiction begins in the space itself. Therefore, the initiative taken by more than 30 builders inside the area and the unity shown by those builders came at a crucial moment.
The DeFi domain has been a primary focus of adventures throughout the course of the last year. According to a study that was compiled by Beosin in 2022, the greatest number of assaults were launched against DeFi-based initiatives.
This weakness was the root cause of a 47.4% increase in security losses in 2022 when compared to the previous year’s total of $3.64 billion in losses, which came to a total.
Additional research from the industry has shown that it is reasonable to anticipate that the current trend of DeFi exploits will continue into this year owing to the introduction of new products to the market and the development of more skilled cybercriminals.
According to a research published by DappRadar, despite this, the industry saw strong growth to begin the year. To encourage more people to use DeFi and Cosmos, the company Injective established a new ecosystem fund in the amount of $150 million in January.
The decentralised exchange (DEX) SushiSwap will, in the near future, reroute one hundred percent of the trading fees that are collected on the platform to its treasury in order to pay for ongoing operations and maintenance for a period of one year. This decision was made in accordance with a governance proposal that was approved on January 23.
After receiving a warning from the CEO that the market could potentially become unstable, the decision to take action was made “Even after lowering annual operational expenses from $9 million to $5 million in the midst of the protracted crypto winter, barely has enough runway in its treasury to last for another 1.5 years.
In the event that this proposal is accepted, the income that is brought into the treasury will be divided between ETH and USDC in a manner that is equal to each other, and it is anticipated that this revenue will total around $6 million over the course of the next year.”
In a second motion that was put to a vote and passed on the same day, 99.85 percent of voters decided to “clawback” 10,936,284 SUSHI tokens with a total value of $14.8 million. These tokens had been distributed to early liquidity providers at the launch of the DEX in 2020 but no one had claimed them. The motion was approved.
Users of SushiSwap who provided trading liquidity for the exchange throughout the months of August 2020 and February 2021 were eligible to claim the rewards, which had been made available to users for more than two years at that time.
Several of the commentators said that “people have earned their SUSHI fair and square,” and that their title to these assets should not be denied because of this fact. In addition, they stated that “people have earned their SUSHI fair and square.”
Others have voiced their support for the clawback on the basis that it removes “idle SUSHI that may be put to higher use.”
The money will be transferred over to the common account that SushiSwap uses.
According to a request that was presented on the 30th of December on the Sushi’s forum, Jared Grey, the Chief Executive Officer of the decentralized exchange SushiSwap, has plans to restructure the tokenomics of the SushiSwap token.
In the new model of tokenomics that has been presented, time-lock tiers will be implemented for emission-based incentives. Additionally, a token-burning mechanism and a liquidity lock will be included in order to provide price support.
According to Grey, the new tokenomics plan is to increase “treasury reserves to assure continued operation and growth.” Additionally, the plan seeks to improve the platform’s liquidity and decentralization.
According to the approach that is being suggested, liquidity providers (LPs) would get 0.05% of the money generated from swap fees, with bigger volume pools receiving the largest proportion.
LPs will also have the option to lock their liquidity in order to receive increased rewards that are depending on emissions.
Additionally, staked SUSHI (xSUSHI) will not earn any portion of the fee money; rather, it will receive awards determined by emissions and paid out in SUSHI tokens.
Emissions-based awards will be determined using time-lock levels, with longer time locks resulting in larger prizes than shorter time locks.
It is possible to make withdrawals prior to the expiration of time locks, albeit doing so will result in the rewards being lost and destroyed.
The decentralized exchange will utilize a configurable amount of the 0.05% swap charge in order to purchase the SUSHI token again and then destroy it.
The percentage will adjust itself according to the total number of time-lock levels that are chosen.
After disclosing that it had fewer than 1.5 years of runway left in its treasury, which means that a huge deficit was jeopardizing the exchange’s economic sustainability, SushiSwap decided to rework its tokenomics. This decision was made after the company made this revelation.
Due to the fact that the token-based emission approach caused SushiSwap to incur a loss of $30 million over the course of the previous 12 months on incentives for LPs, the firm made the decision to implement the new tokenomics model.
The price of SushiSwap has risen by 23.76% in the last 7 days. The price rose by 2.99% in the last 24 hours. In just the past hour, the price grew by 0.39%. At the time of writing, the current price is $1.35 per SUSHI, according to CoinMarketCap. SushiSwap is 94.15% below the all-time high of $23.38.
SushiSwap price has made a strong surge this week as investors react to several important developments within the ecosystem. First, on Monday, Sushi DAO changed its leadership team and as a result elected Jared Grey as the “head chef”, the equivalent of a CEO.
Grey, the CEO at crypto exchange Bitfineon and former CEO of decentralized finance (DeFi) platform EONS, is a highly experienced professional who has established many crypto startups in the past few years. In a statement, Grey said he wants to bolster engagement on the Sushiswap platform, improve the exchange’s internal organization as well as focus his time on revenue and market share growth.
Multiple technical analysts on Twitter also believe SUSHI’s recent positive performance is tied to the recent investment by GoldenTree Asset Management in Sushiwap. On Wednesday, GoldenTree invested about $5.2 million in the SushiSwap governance token. GoldenTree disclosed a $5.3 million token stake in decentralized exchange (DEX) SushiSwap – a development that sent the SUSHI token surging 13% as bullish investors piled in.
GoldenTree explained the reason for such investment, stating that it has been amazed by the resilience of both SUSHI’s core team and the community in the face of challenges, “as they continued to build and release top-tier products.”
The renewed bullish activity surrounding the Sushiswap token is reflected in the rising social volumes, supported by a surge in the weighted social sentiment, as result bolstered the recent price growth.
SUSHI community elections and GoldenTree’s announcement came when interest in SUSHI was seeing an uptick. Between October 4 and October 6, active addresses on the SUSHI protocol rose from 306 to peak at 811, though currently, the figure stands at around 700.
The token’s trading volume also rose from $32 million on October 1 to peak at $201 million on October 6, according to Santiment data. SUSHI’s supply distribution also indicates that addresses holding 10,000 to 100,000 tokens and 100,000 to 1 million tokens surged with the uptick in prices as whales sought more accumulation.
In a Tweet posted by user @cryptotutor Friday, a screenshot appears to show a 27% spread between stablecoin Magic Internet Money (MIM) and USD Coin (USDC) trading pair on decentralized exchange, or DEX, Uniswap (UNI). Both have a theoretical peg of 1:1 against the U.S. Dollar.
“Magic Internet Money,” joked cryptotutor, as he attempted to swap approximately $1 million in MIM but received a quote for only 728.6k USDC. Others quickly took to social media to complain as well. In another screenshot, user @DeFiDownsin allegedly received a quote to swap $984k worth of MIM for just 4,173 in USDT on SushiSwap (SUSHI).
Swapping $1M in $MIM gives $730K in $USDC on Uniswap
‘Magic Internet Money’ pic.twitter.com/CKowe6dwJR
— Tutor (@cryptotutor) January 27, 2022
Curve, a popular platform for stablecoin trading, offered their insight on the matter. “Uniswap actually now works much better than what the screenshot shows. Sushiswap is just unsuitable for stablecoin-to-stablecoin swaps always,” said the Curve team via a Tweet.
During bear markets, investors typically flee from holding volatile cryptocurrencies and instead pile into stable assets that generate fixed income. For example, the amount of deposits in Terra Luna’s flagship stablecoin savings protocol, Anchor, which promises yields of up to 20%, has increased from $2.3 billion to $6.1 billion in the past 60 days.
However, the capital flight has also resulted in issues, such as stablecoin liquidity disappearing from exchanges, causing their spread to widen to excruciating levels. In addition, the flock of stablecoins into the Anchor protocol has caused its yield to become unstainable as there are not enough borrowers to pay depositors’ interest.
But despite large fluctuations in the market, Curve appears to be doing better than ever. According to its developers, the platform saw a record trading daily volume of $3.6 billion, with total deposits surpassing $16.7 billion. Investors typically seek to take advantage of the occasional difference between stablecoins’ theoretical peg to fiat money or other stablecoins to make a profit.
The wealthiest Ethereum (ETH) whales are busy gobbling up Polygon (MATIC) and two other decentralized finance (DeFi) altcoins as the crypto markets take a breather.
Data from whale-surveilling platform WhaleStats shows that the top 1,000 Ethereum whales bought an average of $12,766 worth of MATIC tokens in the last 24 hours.
One notable Polygon transaction involves the second-largest Ethereum whale in existence purchasing 2,000,000 MATIC tokens worth $5.02 million as the altcoin pulled back from its all-time high of $2.92. At time of writing, MATIC is trading at $2.57.
Another altcoin that deep-pocketed investors are accumulating amid the pullback is DeFi protocol Aave (AAVE). According to WhaleStats, whales purchased an average of $10,627 worth of Aave over the same period.
Light, the fourth-wealthiest Ethereum whale, made one of the largest Aave purchases in the past day to the tune of 19,949 Aave worth $5.55 million.
WhaleStats also reveals that large crypto investors are loading up on decentralized exchange Sushi (SUSHI) with an average purchase amount of $4,140 over the same timeframe.
Looking at the top ten altcoins purchased by Ethereum whales in the past day, leading smart contract platform ETH sits at the top of the list with an average purchase amount of $289,590.
Stablecoins Tether (USDT) and USD Coin (USDC) rank second and third.
Woo Network (WOO), a decentralized fintech startup and pool trading platform, takes the seventh spot followed by Wrapped Bitcoin (WBTC). Metaverse tokens Decentraland (MANA) and The Sandbox (SAND) round out the list.
Source: WhaleStats
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SushiSwap is one of the most popular and also veteran decentralized exchanges and automated market makers (AMM). Still, it went through a fair share of infighting in the past couple of months.
Now, a community proposal calls for a merger between Sushi and the Bancor Network.
A Bit of Context
On December 9th, Joseph Delong, the Chief Technical Officer of SushiSwap, announced his resignation. This was no coincidence and the culmination of a prolonged squabble within the community.
In November, a leaked screenshot revealed a poll where Delong asked whether 0xMaki – SushiSwap key developer, should leave the core team and take an advisory role. The ex technology chief refuted the claims and threatened to quit if the community failed to support the proposed core team.
He also submitted a proposal to pay core team members 200,000 SUSHI tokens worth about a million dollars back then, but this didn’t pass.
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Sushi and Bancor?
Now, there’s been a proposal posted on SushiSwap forums that calls for a merger with the Bancor Network, where the main idea is for the two projects to create a new network that would provide a more positive outcome for liquidity providers and traders.
The proposal doesn’t come with a lot of details on the technical aspects but leverages the turmoil in SushiSwap’s leadership as one of the reasons. The voting ends in a few hours, and unless something unexpected happens, it doesn’t; seem likely for the proposal to pass, according to a snapshot on Bancor. At the time of this writing, over 58% of the people are against it, while around 42% are supportive.
Commenting on the matter was also Mark Richardson, Head of Research at Bancor, who said that the proposal, in its current shape and form, lacks the substance needed to be taken seriously but is not fundamentally against the initiative.
I want to wrap this up by saying that I would be so excited to merge the Bancor project with Sushi. I can see very clearly that such an event could have immense value for all involved. There seems to be a synergy of developer talent, community energy, and shared vision that would be very powerful. I don’t want my criticisms here to be misconstrued as an outwardly negative reaction. I wouldn’t bother showing up if I thought the idea was vacuous. But it is [very] incomplete. – He said.
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On Friday, Joseph Delong, former chief technology officer of decentralized exchange, or DEX, SushiSwap, published a brief reflection of experiences during his tenure.
Delong unilaterally resigned two days prior, citing internal structural chaos among developers behind the popular DEX. In explaining his decision, Delong outlined failures to scale operations, lack of organization skills, problematic contributors, and poor communication as the primary reasons. On Twitter and among blockchain personalities alike, Delong received mostly praises for coming public with his experience and learning from his mistakes.
According to Delong, he did not inform the Sushi community when problems began to surface amongst developers he managed, nor did he engage with users enough to build rapport for the project. In addition, Delong talked about using his personal Twitter presence to share his feelings about SushiSwap developments. This was a polarizing decision among the SushiSwap community. Some users have praised him for being authentic with his feelings, while others labeled the move as unprofessional or inconsiderate to stakeholders.
Prior to being CTO at SushiSwap, Delong was a senior software engineer at ConsenSys. In part due to his leadership, SushiSwap has grown to become the 13th largest DEX by trading volume. However, the protocol also faced its share of setbacks.
In summing up the experience, Delong stated:
I think the imperfect birth of Sushi has led to additional problems, and in my next project, I will have the capability to structure an organization to empower the contributors. Thank you for allowing me to lead Sushi through this time, and I wish Sushi the best of luck.
I wrote an article detailing my failures in leadership at Sushi https://t.co/cJOovqW45A pic.twitter.com/OjNNW0ExQY
Joseph Delong has left Sushi following internal conflict with other developers.
The news comes amid a wave of controversies and several months after co-founder 0xMaki stepped down from a leadership role to an advisory role.
Sushi has historically been controversial but is still regarded as one of the most notable DeFi projects.
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Sushi CTO Joseph Delong has resigned from the project after reports of internal conflict. Delong’s resignation is the latest turn of events for the highly controversial project.
Sushi CTO Resigns
The Sushi saga has encountered another twist.
The DeFi project’s CTO, Joseph Delong, posted a resignation notice on Twitter on Dec. 8, stating that his departure would be “effective immediately.”
Though Delong said that he would look back on the project positively, he went on to say that he is “saddened that Sushi is so imperiled within and without.” He expressed fears that Sushi’s issues will not be resolved by remaining team members, and that the project will become a shadow of what it once was.
Delong urged the project to bring in outside management and to be “wary of any self-proclaimed leaders” from within the group. He noted that he will transfer accounts and information to future leaders as necessary.
Unlike past departures, it does not appear that Delong will maintain any relationship with Sushi. Following a vacation, Delong plans to begin work on a new unnamed project.
Delong’s Ongoing Complaints
Delong’s resignation follows a prolonged period of infighting within the project.
On Dec. 5, Delong said that there had been “a lot of drama within Sushi” and manipulation from outside the project, stating that the “absurd defamation has risen to a level I can’t tolerate.”
Specifically, Delong drew attention to complaints from BoringCrypto, otherwise known as 0xM3rlin, and the departure of core team developer Mudit Gupta as issues that heightened the conflict. Various other developers, including 0xKeno and LevX, have reportedly left Sushi’s core development team as well.
BoringCrypto specifically expressed dissatisfaction with Delong’s development skills and leadership, suggesting that his main achievement was promoting the project by “shit-posting on Twitter.”
Delong responded to those complaints by saying that his role was misunderstood. He went on to explain that he joined Sushi as CTO at the request of co-founder 0xMaki to help reform the project—a task that would have involved the creation of a legal entity in order to sign business contracts and open bank accounts. Such a move would have brought Sushi in line with the operation model of projects like Uniswap, which is operated by Uniswap Labs. Now, with Delong’s departure, it is unclear whether such an entity will be created.
Prior to Delong quitting the project, some members of the Sushi community were calling for Sushi’s Product Manager Rachel Chu to be fired from the project. She kept her job, while AG, who oversaw Business Development, was let go “for a continued pattern of behaviour that made for a toxic workplace.”
Amid the internal disputes, Rekt published an investigation featuring several accusations concerning the project’s core team. An anonymous source alleged that an allocation of tokens from MISO’s BitDAO sale was unevenly distributed between members of the team. It’s also alleged that a core member of the team used funds from the Sushi treasury to day trade.
Currently, a restructure to Sushi’s DAO is under consideration, which could rearrange individual leadership roles and reform the way in which the project is administered.
0xMaki Unlikely to Return
In September 2021, Sushi co-founder 0xMaki stepped down from leadership in the project to take on an advisory role.
Though 0xMaki supposedly left his role out of choice, leaked screenshots of a Telegram chat suggest that Delong and others voted for 0xMaki to leave the project’s core team in favor of the advisory position. 10 of 11 votes were in favor of 0xMaki leaving the team. The reasons for 0xMaki’s departure were never clarified to the public.
Now, some members of the community are petitioning for 0xMaki to return as Sushi’s leader. One Twitter poll has received 85% support for 0xMaki’s return, with one commenter noting that this would be “this would be the best redemption [arc] ever.”
Ultimately, 0xMaki’s return seems unlikely. He told The Defiant that he would not return to the project beyond his advisory role.
Sushi’s Controversial History
The recent leadership controversies are not the first time that Sushi has been on unstable ground. Indeed, the project has been plagued by issues since its inception.
Sushi founder Chef Nomi was at the center of one of the project’s earliest controversies. Weeks after its launch in August 2020, Chef Nomi took $14 million worth of ETH in an attempted rug pull. Though Chef Nomi returned those funds, he soon resigned before the end of September 2020.
Sushi’s initial launch was also the subject of controversy in its own right. The project was largely based on the code and features of Ethereum’s best known decentralized exchange, Uniswap. Sushi’s strategy involved incentivizing users to deposit Uniswap tokens on SushiSwap to gain more rewards—a tactic known as a “vampire attack.”
Despite its numerous controversies, Sushi remains one of the most notable and most active DeFi platforms in operation. It’s among the most liquid DeFi projects and has expanded to several networks since launching on Ethereum. Data from DeFi Pulse says that it holds about $3.59 billion in its smart contracts at press time.
Disclaimer: At the time of writing this author held less than $100 of Bitcoin, Ethereum, and altcoins.
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Late Wednesday, Joseph Delong, chief technology officer of SushiSwap, the 13th largest decentralized exchange, or DEX, by trading volume, tendered his immediate resignation from the role. Explaining his decision, Delong gave the following statement:
“I wish Sushi the best and am saddened that Sushi is so imperiled within and without. The chaos that is occurring now is unlikely to result in a resolution that will leave the DAO as much more of a shadow than it once was without a radical structural transformation.”
In the interest of the Sushi Community I am resigning as CTO effective immediately. I very much enjoyed the things that we built together and will look back positively on this moment. pic.twitter.com/7pZsQuPgup
— Joseph Delong (@josephdelong) December 8, 2021
Previously, Delong had voiced disappointment over the inability for SushiSwap to launch on Optimism, a layer two scaling solution for Ethereum (ETH). Delong also claimed to receive little support from centralized exchanges about hackers’ identities after the SushiSwap’s token launchpad experienced a $3M hack, saying it was the “hardest day of my life so far.”
But it appears that it wasn’t simply the technical setbacks of the project that played a role in Delong’s decision. In a series of follow-up Tweets after the announcement, Delong posted screenshots of alleged harassment from SushiSwap users, to which he then cited “it’s the community that does it for me.”
“I highly recommend the installation of a C-suite from outside the DAO [Decentralized Autonomous Organization] and give them the tools to effectively manage a team. Be wary of any self-proclaimed leaders arising from the current core team.” said Delong.
