During a global pandemic, a Twitter user identified as @NomiChef or Chef Nomi announced, in August 2020, the development of one of the most revolutionary projects of the year after his name: SushiSwap. A curious Decentralized Exchange (DEX) whose protocol would end up setting the tone for the rest of the similar projects.
image taken and edited fromIf you want to know a little about this project, its controversial beginning, the ups and downs of the project, and how it became a benchmark for the rest of the DeFi projects, join me in this entertaining and interesting article.
It's a restaurant? or a meal?
Despite its particular name, this platform has nothing to do with Japanese food, SushiSwap is a decentralized exchange (Decentralized Exchange or DEX) that works under the automated market maker (AMM) model, a model that many DEX currently use but with the This particular feature established a very attractive incentive scheme for those who invested in the creation and maintenance of the Exchange's liquidity pool.
Through their SUSHI token, the promoters of the Exchange assured investors a share of the governance of the project, thus guaranteeing them voting power to decide the future of the project. It also established rewards for yield farming and liquidity mining, the latter turned out to be the reasons that made it become the DEX with the highest value of blocked tokens (TVL) in the entire crypto world.
A novel story
It all started with the tweet published August 24, 2020, by Chef Nomi, in which he announced the creation of the platform, using the WTFPL license, and which in his words was "a project for everyone and not just for elites", with which made it clear that it would be decentralized and easy to use by all users, as opposed to other DEXs.
However, as soon as the project had started, specialists from all over the world began to criticize it because it was just plagiarism from another Exchange Uniswap, to which a token known as SUSHI was added. Chef Nomi himself in another tweet made it clear:
"SushiSwap is an evolution of Uniswap with SUSHI tokenomics. The SushiSwap protocol better aligns incentives for network participants by introducing network and revenue distribution effects into the existing AMM model."
However, the project, which was even branded as a simple ponzi scam, in a few weeks of its launch went from having a TVL of 0 to more than 1.3 billion dollars, this thanks to the non-traditional approach of its governance system, concerning the rest of the DEX.
When the protagonist dies
It is still debated if it was an exit scam or an error in judgment by Chef Nomi, the truth is that shortly after the rise of SushiSwap the creator of DEX decided to empty the fund and "withdraw" with 14 million dollars that the fund had generated as own earnings, "selling" his project to the FTX company which caused the platform to collapse, passing its token from $ 11.93 in September to $ 0.60 in September 2020 and its TVL contracted to 280 million dollars.
However…
Once FTX took possession of the SushiSwap protocol, the development fund was reformed and secured in a multi-sig wallet, and guess who came back? Chef Nomi himself with all the funds he had withdrawn, this happened on September 11, 2020, as reported by the same in his Twitter account, that if now without the control of the platform.
How do you prepare a SushiSwap?
SushiSwap works very similar to how Uniswap V2 does, which as we saw served as "inspiration", although concerning the third version of Uniswap V3, the current version of SushiSwap is very different.
This platform applies all the functions present in Uniswap, starting with being an Automated Market Maker (AMM), which uses the economic mechanism known as Constant Product Market Maker (CPMM) which it develops through its smart contracts on Ethereum so that this DEX works natively with ERC-20 tokens.
What makes this DEX different is its rewards policy and the way it manages the governance of the project since, on the one hand, the liquidity for exchanges within the platform is controlled by the Smart Contracts associated with liquidity pools (LP) created by investors. that then raise more capital from other investors to increase the volume of the well, this makes the investor who acts as a “fund provider” not only earn for the exchanges made in it but also earns SUSHI and SLP tokens.
The aforementioned tokens serve the funder to:
- Be exchanged for other cryptocurrencies, withdraw profits, or simply increase participation in a pool.
- To perform staking and increase the power of participation within the governance of the protocol.
- As well as other various options, developed within the SushiSwap protocol
The SushiBar is open
In addition to the aforementioned benefits, SushiSwap has a staking and yield farming tool known as SushiBar, which allows blocking SUSHI tokens to use them as a lending/borrowing system within the platform, in exchange for SUSHI token holders blocked in SushiBar they receive xSUSHI tokens that they can keep or change to withdraw their holdings at any time, in addition, they also receive a variable reward that comes from the commissions charged in each of the DEX operations.
What did you think of today's dinner? Sorry, today's article. Do you have experience in using DEX? Do you find this SushiSwap proposal interesting? Do you currently do staking or yield farming? I would like to know your experience and opinion about it, see you in the comment box.
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Posted Using LeoFinance Beta
redactedOhh no !, how could this happen, what am I supposed to do now @keys-defender?
All good, I will whitelist your link. It’s similar to what an attacker is using.
ahhh ok, grateful for your answer !.
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