The liquidity on DEX Uniswap fell sharply, from $3.3 billion to $1.7 billion, as the UNI liquidity mining regards program ended on Monday.
Simultaneously, SushiSwap started incentivizing the same pools as Uniswap right on the day Uniswap’s subsidy ended. With this, SushiSwap liquidity continues to rise, the total value locked in the project also jumping back above $1 billion.
SIMP #1 released :
– Vesting + Boosting for rewards in the new Sushibar v2
– Rewards in DAI + claim function
– Remove the EOA requirement to leverage Keep3rs
– 7 days before going from Sushi -> xSushi
(mitigation of flashloans-borrow arbs)
Read for morehttps://t.co/RHRl2ARf4A
— 0xMaki 源 義経 (@0xMaki) November 13, 2020
“This feels like (a smaller) vampire attack 2.0, with the difference that Sushiswap has a more distinguished product now and is not just an exact clone of Uniswap anymore,” said Hasu, an independent researcher adding that the real kicker is that “Sushi token holders already capture 1/6 of every taker fee, or 0.05% of all trading volume.”
With a 240% increase in TVL in just three days, SushiSwap became the 6th largest DeFi project while Uniswap lost its dominance.
SpartanBlack, a partner at the crypto fund, the Spartan Group, tweeted, “Yield farmers have no platform loyalty. They go where the yields are….”
Still, the volume on the Uniswap platform is strong, the 7-day volume above $1 billion.
Jeff Dorman of Arca also pointed out, “4 Uniswap pools had more liquidity than needed to facilitate trading, & the excess liquidity left once UNI farming ended. This doesn’t affect volumes. TVL is pointless for Uniswap when there is more capital than needed.”
While LPs are critical to the success of Uniswap, incentivizing market makers isn’t the secret to success, he added. “You need customers too, and Uniswap’s customers are much stickier than the LPs. As long as customers show up, LPs will stay,” Dorman said.
According to him, UNI’s latest move just means the excess unproductive capital is gone.
But even Uniswap community members are not giving up, and a governance vote for continuing farming on the same four asset pairs WBTC/ETH, USDC/ETH, USDT/ETH, and DAI/ETH is proposed. The proposal has to pass a series of governance polls before farming restarts on Dec. 4.
— Autism Capital 🧩 (@AutismCapital) November 16, 2020
Amidst the focus on Bitcoin and its looming retest of an all-time high, a heated battle for LPs by DeFi based venues is emerging. Recently, Bancor also announced a proposal for BNT Liquidity Mining (LM) — aimed at driving new liquidity to Bancor pools & incentivizing long-term liquidity provision.