Sushi-Inspired DeFi Protocol Rides Latest Cryptocurrency Frenzy To Lock Over $1B Value In 3 Days

SushiSwap, a decentralized finance (DeFi) protocol, has exceeded more than $1 billion in total value locked since it was launched on Aug. 26, according to market tracker Zippo.

What Happened: The novel DeFi protocol, forked from Uniswap, is sucking liquidity from its parent and has already aggregated 76.7% of its assets, as per Zippo.

A critical distinction between the two DeFi protocols is that the new protocol has a governance token called Sushi, which will be distributed at 10 times the base rate of 100 SUSHI per block, translating into 1,000 Sushi to be generated per block, so as to attract early farmers, according to the project.

Uniswap says its model is based on distributing 0.3% of trading fee to its liquidity providers in a given pool. SushiSwap, on the other hand, will give 0.25% and award 0.05% in the form of Sushi tokens, which can be bought or sold and used to exercise governance.

Why It Matters: DeFi, financial services that are underpinned by smart contracts, have seen their popularity explode in the cryptocurrency universe. The total value locked up in DeFi contracts skyrocketed from $1.5 million in September 2017 to $8.8 billion as of press time, according to DeFi Pulse, a website that focuses on decentralized finance.

SushiSwap smart contracts remain unaudited at this time but Quanstamp, a blockchain security-auditing protocol is likely to conduct an audit, the anonymous developers of the protocol said on Twitter. 

There is some speculation that Uniswap could end the hype surrounding SushiSwap by simply releasing its own token in its future V3 upgrade, according to Decrypt. 

Price Action: Sushi traded nearly 131% higher at $7.68 on Tuesday at press time.
Photo courtesy: Alpha via Flickr.

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Posted In: Bitcoindecentralized financeDeFiSushiSwapUniSwapCryptocurrencyFintechMarketsTech