How SushiSwap cryptocurrency evolved

It all started with a regular blog post by Chef Nomi on Medium on August 26, 2020. He published a post detailing the SushiSwap protocol. Chef Nomi was later joined by 0xMaki. Not much is known about the creators of the cryptocurrency

In the first week after its launch, SushiSwap amassed more than $1 billion in assets in its pools and surpassed Aave, the largest DeFi-protocol at the time, for a time. Interest payments on assets locked into SushiSwap at the time could be more than 2,500% per annum.

On September 5, Chef Nomi unexpectedly sold SUSHIi tokens for more than $14 million. These funds were reserved for the development of the protocol, but Chef Nomi said that he was fully entitled to them. Against this background, the price of SUSHI began to decline rapidly, and along with it the quotation of DeFi fell.

Soon after these events Chef Nomi left the position of chief developer, transferring the keys of management to the CEO of the cryptocurrency exchange FTX Sam Bankman-Fried.

The SushiSwap community selected nine people from the DeFi sector to hold the keys to the multi-signature wallet, which holds funds for project development, which positively affects the SUSHI cryptocurrency rate.

Then on Sept. 11, Chef Nomi suddenly returned the funds he had appropriated from the project’s development fund. Some believe this was done to draw attention to the project. 0xMaki later claimed that he had given Chef Nomi an ultimatum, promising to reveal important information about him if he did not return the money. After that Chef Nomi did not actively participate in the development of the project.

At the time of the initial launch of SushiSwap, the entire model of the exchange was built around tokens – UniSwap liquidity providers. Such tokens are issued at the moment of deposit to UniSwap pools and with their help money can be withdrawn. SushiSwap developers took advantage of this feature to bring UniSwap liquidity to their platform. UniSwap users kept their liquidity provider tokens, but by depositing them into SushiSwap’s stack, they could earn SUSHI tokens.

After the end of the initial two-week period, there was a liquidity migration. At that time, all liquidity providers’ tokens were automatically returned to UniSwap and redeemed with their respective cryptocurrency, which was immediately migrated to SushiSwap pools. As a result, SushiSwap gained $1.14 billion in liquidity, while UniSwap lost it.

SushiSwap contracts were not audited at the time of launch. The contracts in use today have been audited by PeckShield and Quantstamp. Audits are conducted by third-party professional firms to mitigate the risks of contracts malfunctioning.

About the Author

You may also like these