SushiSwap volume surges 73% to $428M in 24-hours


Plus the big SUSHI token dump debate

SushiSwap, a leading decentralized exchange (DEX) running on Ethereum has seen a massive increase in its 24-hour volume to $428 million. At the same time the total value locked (TVL) in its smart contracts is now at $4.10 billion and getting ever closer to the leading DEX Uniswap’s $4.9 billion TVL. 

The surge in volume comes amidst two interesting developments in the DeFi sector. Firstly, Uniswap this week announced the release of its version three causing a slight surge in volume for the leading DEX to almost $900 million. 

Meanwhile, news surfaced that SushiSwap is supposed to be unlocking $880 million in SUSHI tokens at the end of March 2021 after a staking period comes to an end. The SushiSwap community is currently deciding what to do about the estimated 47 million SUSHI tokens set to be released.

60 Day Staking Period 

The exchange’s native token is a governance token and anyone holding these tokens can stake them, which locks up their tokens for up to six months in exchange for rewards. These rewards come in the form of XSUSHI tokens, which receive trading fees from the exchange and have voting rights on changes to the network.

In late 2020, Harvest Finance, a yield aggregator which automatically invests its user’s in decentralized finance tokens that offer the highest yields started backing SUSHI, enabling users to start vesting SUSHI. Other dapps such as Pickle Finance quickly followed suit.

From the end of March onwards, 47 million SUSHI tokens of which Harvest Finance owns around 6%—will reach the six-month mark and should become unlocked. Of course, changes to the code are possible to extend the staking period and protect the token but the discussion lays in the hands of the community currently

What are the options?

One option discussed was to just airdrop the tokens all in one go, while another was to allow the tokens to be claimed on a weekly basis, which would incur higher transaction fees for those claiming. SushiSwap token holders voted for the second option, of a slower distribution of funds. 65% of the turnout voted for this option.

But then SushiSwap’s code was changed in a way that would stop aggregators like Harvest Finance from getting tokens. On March 4th, a change was pushed to the code, which would allow individual wallet owners to claim their SUSHI, while anyone who interacted with the project via smart contracts would get no tokens. This meant that Harvest Finance wouldn’t receive any tokens.

According to a statement by SushiSwap community member ”The move was made to protect the protocol from parasitic farms who have only one purpose: market dump sushi to buy back their own token to pump their token price.”

The road ahead

With Uniswap seemingly poised to pull away from its copycat competitor with the release of its long-awaited v3, the road ahead for SushiSwap is no less bright. Partnership with NFT platform NFTX to offer liquidity pools for the hottest digital collectibles is a shrewd move in the current climate. Meanwhile, the Avalanche blockchain has welcomed SushiSwap in meaning that DEX traders will now be able to take advantage of the same product but with the bonus of faster transactions and lower costs. 

Share this post on social media

Share this Article

Related articles

Related articles

Coinbase Embraces SushiSwap Despite Complicated History

SushiSwap now has $3.78 Billion TVL
sushiswap coinbase