So what happened?
Enough for a small novella. In brief, nearly $2 billion in Uniswap-LP-Pool-Tokens were deposited to Sushiswap contracts, earning their depositors $SUSHI tokens. Yields for these Sushiswap stakers topped 1000% APY at times, driving the surge. Meanwhile, on the back of such strong deposits, $SUSHI was listed for trade on DEXs as well as some centralized exchanges and quickly appreciated in value, hitting $300M in market cap.
Then it all started to unravel over the next week. The price began to drop as more and more tokens were minted to yield farmers, some of whom were only interested in selling them as fast as possible. The drop prompted the anonymous lead developer (“Chef Nomi”) to sell a $14M chunk of $SUSHI tokens to secure long-term funding. However this was a shock to the community and a betrayal of trust (he previously committed to avoid selling any tokens), and he was ousted from the project (later issuing an apology and returning the funds).
But the damage was done. While Sushiswap successfully migrated Uniswap’s liquidity and launched their exchange, the initial energy and enthusiasm had waned. To Sushiswap’s credit the project has now taken on a life of its own, targeting potential integrations with other blockchains like Solana, and charting their own path.
Interestingly, Uniswap didn’t take the attack lying down. While they previously didn’t have a native token, one could argue it suddenly became a critical disadvantage. So on September 17th, they unveiled $UNI as a governance token and promptly airdropped ~$1000 in $UNI to every previous Uniswap user, rewarding past contributions as well as continued loyalty by also distributing remaining $UNI through yield farming.
Today, Sushiswap sustains a respectable $300M TVL, $40M / day volume, and $100M market cap. Not bad for a one-month old project, but dwarfed by Uniswap with $2.2B TVL, $300M / day volume, and $300M market cap. The first battle belongs to the incumbent.