- SushiSwap is a Uniswap copycat built with the idea of stripping power from VCs and returning it to the community.
- The creator, Chef Nomi, sold the project’s development fund (10% of supply) and transferred control to FTX’s Sam Bankman-Fried.
- Many people are working to revive SushiSwap, but the project’s reputation is tarnished forever.
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SushiSwap’s anonymous creator abandoned the project after cashing in on $13 million of tokens allocated to the development fund. Control of the project now rests in the hands of Sam Bankman-Fried of FTX Exchange, but the experiment serves as a crucial lesson for the DeFi community.
A Bright Start to SushiSwap
The latest drama in DeFi revolves around SushiSwap, a Uniswap fork that launched just over a week ago. Its creator, who goes by the pseudonym of “Chef Nomi,” repeatedly stated that SushiSwap is an attempt to recreate Uniswap’s success without the legion of VCs backing it.
SushiSwap was identical to Uniswap v2 in every way but had one core differentiator: a token that accrued value. This token replaces a contentious design feature in Uniswap.
The Uniswap team can pull a lever and direct 17% of the protocol’s earnings to a designated address. The remaining 83% would still go to liquidity providers (LPs).
It is expected that this 17% will be shared amongst the founding team and investors whenever it’s implemented. This feature has yet to be activated, however.
With Sushi, the dynamics remain the same. But the 17% of earnings mentioned above would be distributed to Sushi holders.
SushiSwap kicked off its liquidity mining to great success, seeing upwards of a billion dollars in the protocol at one point in time. To mine SUSHI tokens, one had to provide liquidity to a Uniswap pool and lock their LP tokens in the Sushi smart contract.
Eventually, the plan was to migrate this liquidity from Uniswap to SushiSwap.
Everything was going as per plan, and the DeFi community was excited to…