Springtime for SushiSwap again as Uniswap Stopped Liquidity Mining

Photo by Andraz Lazic on Unsplash

Recently, Uniswap stopped liquidity mining, and it will take about a week to start again. As the number one locked position project on DeFi, with a market value of over $2.9 billion, it will have a great impact on the whole DeFi. As I said in previous articles, I am not optimistic about DEX and don’t recommend anyone to get involved, but with DEX’s big drop, the real gold will show up after the bubble.

Token Model of SUSHI

SushiSwap experienced a very exaggerated drop in price, and as a single knight to Uniswap, SushiSwap went through a lot of pain at one point due to excessive incremental issuance and founder events, but the Sushi community was quick to rethink, elected 9 multi-sign members through a public election, and built a core team to revise the token model. The total number of SUSHI is fixed at 250 million, and the current circulation is about 152 million. As for the original bonus, it drops from 1,000 per block to the current 80 SUSHI per block, and it will be decreased in the future, in addition, 2/3 of them will be locked. The daily release quantity is about 433,333, and the real release quantity is about 144,444 after deducting the locked position. Based on the price of $1.2/SUSHI, the daily supply quantity is $173,000, while UNI generates $1.28 million daily supply quantity. Also, Sushi has established a buyback mechanism and bought back about $1.7 million of SUSHI. It could be argued that Sushi’s token model has created a new supply and demand through the constant grind of a declining market.

Analysis of SUSHI’s Market Value

Based on the total amount and the circulation of SUSH, the total market value is $300 million, and the circulation market value is $182 million. While UNI, with its total amount and circulation amount, its total market value is $4 billion and the circulation market value is $800 million. The price of SUSHI dropped from 15USD to 1.2USD until the price of 0.48USD rebounded to 1.2USD. It can be seen that most of SUSHI was set up at a very high cost and even the price is low, it is hard to attract most of the funds.

SUSHI’s Profitability Analysis

SUSHI realized approximately $3,387 million in trading volume, which generated approximately $10.16 million in revenue to platform participants. Of this amount, 5/6, or approximately $8.47 million, was allocated to liquidity providers and the other 1/6, or approximately $1.7 million, was allocated to xSushi owners following the buyback of Sushi. As the annualized fee income is about 60 million, if the profit is calculated according to the 3/10,000 fee, then the total market value PE is 5, the liquid market value PE is 3.03; or if the profit is calculated according to the 5/10,000 fee, then the total market value PE is 30, the liquid market value PE is 18.18. It can be seen that the cost performance of SUSHI is very prominent.

SushiSwap’s figures are also excellent in terms of volume and number of users, and we can see that Sushi is solidly in third place in DEX in terms of these two figures. With the funds flows in from UniSwap, the slippage will be more friendly. We can’t rule out a better ranking move for it.

Analysis of TVL in SushiSwap

The TVL in SushiSwap has experienced a process from peak to trough and back to rise again. TVL is an important indicator for DeFi, and SushiSwap has gone from a high of $1.42 billion to $240 million. But in the last week, with Uniswap stopped liquidity mining and the rebounding of SUSHI, the bounce trend of its TVL is clear, which straight back from the lows to $350 million.


  1. Limit Order. the beta version of Limit Order has been released by the development team Levx on the lightweight UI lite.sushiswap.fi and is currently in testing and awaiting audit by a professional institute, no transaction data has been generated yet.

2. Bento Box, a lending product that the community has high hopes for, is now almost completed by BoringCrypto developers and is in testing and awaiting audit.

3. Moonbeam. the community has passed the initial proposal to attempt cross-chain deployment to Polkdot and Kusama and is expected to move forward by the end of the year, at which point moonSushi token airdrops will be issued to the SushiSwap community.

4. Gusoku. SushiSwap has approached external teams with plans to introduce options hedging and stoploss tools to develop Gusoku, a product to mitigate the vagaries of liquidity market-making losses, which may increase willingness to enter the market.

5. MISO. Minimal Initial Sushi Offering, which will encourage the launch of new projects on the SushiSwap platform.

It can be seen that the Sushi team is very pragmatic, with a roadmap direction that is more in line with public expectations, and at the Uniswap community meeting, 0xMaki, the general manager of Sushi, said that once Uniswap V3 is available, Sushi will be the first to follow it. Although the team is still relying on replicating Uniswap, it can be seen that they are very much grounded in the project itself.

Photo by Boudewijn Huysmans on Unsplash

Impact of Uniswap’s mining closure

The most important thing that has happened to DeFi recently is that UNI stopped liquidity mining so that $2.9 billion funds have to choose a new platform. Sushi and Balancer are definitely the best DEX for trading pairs to migrate to. Uniswap is about to go into chaos, which is the best thing that could happen to Sushi, and the uncertainty of Uniswap is the certainty of Sushi. At that time, there will definitely be funds migrating from Uniswap to Sushi, and the greater the Uniswap uncertainty, the higher the amount of migrated funds, the more friendly the trading slippage of Sushi will be. Thus, in turn, it will boost the trading volume, while the appreciation of Sushi price will boost its TVL. Finally, SushiSwap will enter into a positive cycle.

However, when Uniswap starts its liquidity mining again, SUSHI will be in a weak position. But a token that has thought twice about itself is sure to have a good future.

Article from Lin Ming, co-founder of FirstPool

Translated by Yang(Mengyan Finance)

To translate some latest policy and issues on blockchain and fintech happened in China