Uniswap’s liquidity dropped by more than 70% yesterday, returning to the same scale as before the birth of SushiSwap, about less than US$500 million. On the other hand, SushiSwap has “leveraged” more than $1 billion in liquidity. In other words, after liquidity migration, SushiSwap’s liquidity is more than twice that of Uniswap.
SushiSwap’s genius fork
No matter what people think of SushiSwap, it is a classic battle in the history of encryption. In essence, SushiSwap did not leverage too much liquidity on Uniswap, because Uniswap had the same liquidity before and after the birth of SushiSwap, and SushiSwap took away its own liquidity.
However, SushiSwap’s Uniswap-based gameplay is extremely innovative, because it is not just a simple fork, but a token distribution mechanism (partly with reference to YFI), and most importantly, Uniswap-based liquidity pool equity generation The currency is distributed with SUSHI tokens, which solves the problem of subsequent liquidity for it.
In other words, from the beginning, SushiSwap does not have to worry about the issue of chicken or egg. Because of the “old hen” Uniswap, SushiSwap does not have to worry about the problem of “ no eggs”, just how many problems.
This kind of gameplay seems very simple and does not have much technical content. But it combined these mechanisms and gameplay to detonate the crypto community, and it fully hit the excitement of the community.
Uniswap’s liquidity has risen again, is it possible that funds are returning?
After uniswap’s liquidity fell to less than 500 million US dollars yesterday, today Uniswap’s liquidity once again climbed to more than 1 billion US dollars. What’s happening here? Is the liquidity of SushiSwap returning again? It’s not.
The liquidity of SushiSwap remained at the same level as before (a slight decline). So, where does the new liquidity of about $500 million come from? It turned out that SashimiSwap came.
Sashimi not only brings new liquidity mining, but also brings new inspiration to other public chains and projects. If other public chains or projects are used properly, then these projects are also very likely to join the battle. However, the effect of joining the battle will definitely gradually decrease.
What is SashimiSwap?
SashimiSwap is essentially the same as SushiSwap. It is also a DEX of the AMM model and a fork of Uniswap, but it is not a fork of SushiSwap, and the two will not share liquidity.
In terms of mechanism, SashimiSwap copied SushiSwap, and users only need to pledge their LP tokens in 11 liquidity pools on Uniswap to mine SASHIMI tokens. At the same time, the incentive mechanism used is the same. In the first 100,000 blocks (from block height 10,833,000 to 10,933,000), it will give users who pledge 11 Uniswap liquidity pool LP tokens 1,000 SASHIMI tokens per block Rewards.
After the initial 100,000 blocks, the reward for each block will drop to 100 SASHIMI. The token incentive mechanism is the same as SushiSwap. It adopts a high-profile model, trying to quickly increase the overall liquidity through short-term high-return stimulation.
Except for the same mechanism as SushiSwap, SashimiSwap is different in that it does not have a 10% token distribution share of the developer team. In SushiSwap, 10% of the founder’s share is used for development and auditing, directly derived from SUSHI token distribution.
The developer share of SasimiSwap is not directly derived from the new token distribution, but from 0.05% of the 0.3% transaction fee, and the remaining 0.25% fee rewards users who provide liquidity. A 0.05% fee will be sent to the SASHIMI DAO contract.
Enlightenment from SashimiSwap
If many projects want to have a new look, it is very important to find a trigger point for demand. One of today’s demand triggers is the high yield of liquid mining. (Of course, this is a short-term stimulus, and long-term development requires a combination of long and short.)
If many projects want to have a new look, it is very important to find a trigger point for demand. One of today’s demand triggers is the high yield of liquid mining (Of course, this is a short-term stimulus, and long-term development requires a combination of the two).
SashimiSwap was initiated by Aelf, and it will be integrated with AESwap on its own blockchain in the future. From this perspective, Aelf was originally going to release its AESwap, and SashimiSwap can kill two birds with one stone.
Pave the way for the development of AESwap
AESwap was originally a DeFi ecological project to be promoted by Aelf itself. If it did not copy the gameplay of SushiSwap, it would take more time, energy and cost to attract people’s attention.
Now, just copying the SushiSwap model and removing the developer token share from the liquidity mining allocation, this move immediately caused the market to react.
Take advantage of the trend to increase the demand for Aelf public chain tokens
The price of Aelf’s public chain has more than doubled from yesterday to now, and its core driving force comes from the impact of liquidity mining in SashimiSwap. On Uniswap, there are 11 mining token pools, of which there are 2 token pools, one is SASHIMI/ELF token pool and the other is ETH/ELF token pool.
In order to enter these two high-yield token pools for liquidity mining, users need to buy ELF with the same value as ETH to provide liquidity on Uniswap, which has caused an increase in the demand for ELF. Of course, this is also the main driving force for Uniswap’s liquidity to rise again.
From this perspective, it brings new gameplay inspiration to other public chains and projects. It is to borrow the SushiSwap model to ultimately serve the development of its own ecology or project, especially to achieve liquidity stimulation in the short term and complete the initial cold start. From the current point of view, this trick is effective in the short term.
Of course, this gameplay is not without side effects. If too many public chains or project parties frequently adopt this kind of gameplay, it will be overwhelming. Too frequent liquidity mining itself does not produce long-term value.
In this way of playing, traders in the market pay the bills in the end, and benefit from the early start-up project parties, the earliest whales participating in liquidity mining, and the miners on public chains such as Ethereum. As more people participate, The more expensive the handling fee (the current Ethereum handling fee has far exceeded the handling fee on Bitcoin, and the total value of its daily flow has also exceeded that of Bitcoin. The main reason for this is liquid mining).
From a short-term perspective, it is essentially a zero-sum game. If traders and liquidity providers cannot be precipitated in the end, this is a long-term game of little value, and it may end up all over the place. For ordinary users, it may not be suitable for participation, and risks need to be controlled.
At the same time, this gameplay will also have a diminishing effect, because as people who provide liquidity discover that not everyone can make money in the market, people’s enthusiasm will diminish and finally return to a relatively rational average return.