Can "Sushi" still maintain the competitiveness of the DeFi market?

in LeoFinancelast month

"Sushiswap" (Sushiswap) anonymous core developer Nomi chef suddenly exchanged millions of SUSHI tokens he held for ETH, which resulted in the instantaneous liquidity of his platform significantly reduce. This approach has directly brought a fatal blow to the project itself, because it undermines the core concept of the crypto community: confidence, and it has also caused the "Sushi" project to fall into a slump recently.

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Confidence is the core element of building the entire DeFi project and community, and this was dismantled two weeks ago, and the fate of "Sushi" Sushiswap may have been doomed since then. At the time of writing, according to Coingecko data, the price of SUSHI token has fallen to US$1.51, a 24-hour drop of 17.2%, and its market value has shrunk to US$152 million. In addition, DeBank data shows that the locked-up volume of "Sushi" has fallen below US$500 million (US$483.7 million), falling to the tenth place in the locked-up volume of the DeFi protocol. The locked-up volume of "Sushi" reached US$1.58 billion on September 4. High point, which means that its locked position has fallen by nearly 70% in less than three weeks.

Being on the cusp of the storm, Chef Nomi soon announced that he would give up control of the "Sushi" project after cashing out and handed over this power to FTX founder SBF. However, it can be seen that although the "Sushi" team has tried various efforts since then, they have not been able to bring much positive impact, because the community's confidence in the project seems to have been lost. Just imagine, if even the founder himself doesn’t have confidence in his own project, who can he count on to trust the project?

Just after SBF took office, he announced several measures. The first is to continue to complete the originally designed project migration plan; the second is to announce that he will airdrop 2 million SUSHI tokens to the liquidity providers in the migration process! Affected by this good news, the SUSHI token rebounded, from a price close to $1 to a maximum of $3.5 in a short period of time; in the end, nine multi-signature executors were successfully selected.

The most unexpected thing is that, in order to restore the community’s confidence in "sushi", Chef Nomi suddenly surfaced on September 11 and said that he would return all the ETH tokens previously cashed out to the community and give the right to use the money. Give the whole community.

After voting on the proposal, the community decided to use the $14 million worth of ETH to buy back SUSHI tokens.

So is it wise to buy back SUSHI tokens from the market? It should be understood that repurchase refers to the behavior of a listed company using cash and other methods to repurchase a certain amount of stock issued by the company from the stock market. It is a trading method in the traditional 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 deceive investors about the repurchase, which is actually just a fake shot. The ultimate goal may be to facilitate the reduction of holdings after the price of tokens rises.

For the "Sushi" project, since the confidence of the community has been hit before, the negative impact of this repurchase has been magnified. Therefore, as soon as the news of the repurchase came out, it aggravated investors' dissatisfaction with the project. Some users even worried that they would be fooled for the second time, calling "Sushi" credit bankruptcy. As confidence in the new team is getting lower and lower, many investors are now preparing to sell "Sushi" SUSHI tokens, and the high liquidity 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.

In addition, the multi-signature executor selected by "Sushi" has also raised questions from the community, because two of the stakeholders Compound founder Robert Leshner and ino Global Capital CEO Matthew Graham have invested in SBF's blockchain projects Solana and Serum. The community is very worried that SBF uses "sushi" for personal gain and achieves its ultimate goal, using Solana's SPL token standard to overthrow the slow and expensive ERC-20 token standard on Ethereum.

Today, we can see that the transaction volume of the "Sushi" platform has been declining every day. From September 10 to September 14, the transaction volume has been reduced to 155 million US dollars, a drop of 43.4%. At the same time, in the past few days, the amount of locked positions on the platform has fallen sharply, and has now reduced by nearly $500 million. Liquidity has been hit so hard, has "sushi" lost its market competitiveness?

Compared with the liquidity of "Sushi", Uniswap has experienced small fluctuations in the same period, but it has begun to reverse its decline, once set a record of 1.12 billion US dollars in liquidity and 468 million US dollars in transaction volume. And unlike "Sushi", although Uniswap's lock-up volume fell to a low of US$525 million last week, it has now rebounded to around US$2 billion, successfully ranking first in the DeFi protocol lock-up volume. At the same time, the sharp cuts in economic incentives have also had a negative impact on the overall liquidity of "sushi". You should know that on the "Sushi" platform, market participants can add digital currency to their liquidity pool and get rewards. Like other platforms in the decentralized financial market, early liquidity providers can also get rewards. Guide liquidity.

In this extremely competitive market, the "Sushi" project broke a series of things that destroyed the confidence of the community in a short period of time. The future development is quite not optimistic. I can only wish it an early turnaround, and don't destroy the investment so quickly. The expectations of the audience.

Part of this article is compiled from cryptobriefing

Posted Using LeoFinance