Bitcoin

DEX targets will differ when SushiSwap (SUSHI) and Uniswap (UNI) hit new highs

Uniswap and SushiSwap have become two of the leading decentralized exchanges (DEX). You lead the current uptrend at DeFi.

Despite the controversial beginnings of SushiSwap, it has caught up with Uniswap in the past few months in terms of the activity on the platform, the total blocked value and the price of your SUSHI governance token.

A recent report by Delphi Digital examined the two projects and identified the fundamental differences in terms of the differences in each project. from the vampire attack by SushiSwap on Uniswap.

SUSHI price vs. UNI. Source: The tie
DEX targets will differ when SushiSwap (SUSHI) and Uniswap (UNI) hit new highs
DEX targets will differ when SushiSwap (SUSHI) and Uniswap (UNI) hit new highs

SushiSwap was originally developed as a fork of Uniswap v2 with the SUSHI governance token. that was distributed to community participants.

At this point, Uniswap had not yet started the UNI token.which were later distributed to users who had interacted with the protocol, either through trading or by providing liquidity.

Although the launch of UNI is probably planned at some point, The surprise launch was seen by many as an attempt to stop a possible vampire attack that would affect Uniswap’s liquidity for SushiSwap..

After a bumpy start, during which the co-creator of SushiSwap, Chef Nomi, launched all of his SUSHI tokens valued at $ 14 million (ETH), he returned those funds to the treasury. SushiSwap co-founder ‘0xMaki’ took the lead on the project and helped it correct its course and become a viable competitor among the DeFi platforms.

Total value blocked on sushi swap. Source: Defi Llama

When it comes to comparing the original token distribution, 65% of the original UNI offering was distributed to the community through cash flow and controlled treasury and governance measures, compared to 80% of all SUSHI tokens.

In this way, The SushiSwap platform has evolved into a more community-controlled, self-funding project, with 9% of all SUSHI being spent by the treasury system. However, Uniswap has received a total of $ 12 million in support from VC from a variety of sources to fund future development..

SushiSwap is more decentralized than Uniswap

The differences in development path started shortly after the fork and resulted in two different platforms that had different experiences. Enthusiasm for Uniswap v3’s release continues to grow, even though only a handful of insiders know exactly what the new version will mean.

Although users and token holders trust the main developers who have created an amazing user interface so far, Many in the crypto space prefer a project with more transparency and community participation.

In this way, SushiSwap stays more in the community spirit of the cryptocurrency;; The core team consists of developers who are more transparent about what’s coming and where the project will lead in the future.

SushiSwap has also set up an effective governance system that allows community members to have a say in important decisions. Uniswap’s system of governance is less conducive to community engagementThis could be the result of the UNI token’s hasty launch and a desire to lay a solid foundation before integrating community governance.

Divergence in value proposition and community participation

In the past few months the Uniswap team has focused on building version 3. As Delphi Digital pointed out, Uniswap’s advantage of being the first to have the platform enabled many integrations since then Projects across the industry were looking for a platform to deliver the liquidity.

On the other hand, SushiSwap has made an effort to connect with other booming DeFi platforms, particularly the yEarn ecosystem., including yarn, cream, cucumber, lid, and alpha. This will help make greater use of SushiSwap’s liquidity supply and make the platform more resilient to upcoming challenges..

SushiSwap pool liquidity against Uniswap. Source: Dune Analytics

More recently SushiSwap has started to incentivize liquidity for longer term assets in order to establish itself as a place to access projects with long term profitability.. Vice versa, Uniswap was a way for new projects to be one step ahead of liquidity and community engagement.

One of the main differences between the two platforms concerns the generation of liquidity.

In March 2021, the UNI community will have the opportunity to redirect 0.05% of all platform commissions to the Uniswap treasury, managed by the UNI token. Commissions will accumulate in the state treasury, and the holders of the UNI token can vote on what to do with these funds in the future.

SushiSwap has had a rate of 0.05% since its inception in September 2020 and the Governance Council agreed that the money generated will be used to buy SUSHI directly and give it to the stakersProviding a direct source of income.

In terms of commissions generated, Uniswap is currently clearly at the top. With a greater number of available trading pairs and huge liquidity reserves for the major currencies The Uniswap platform registers higher volumes and this leads to more cash flow for liquidity reserves and UNI token holders.

Uniswap volume vs. SushiSwap. Source: The tie

But since the commissions go to a treasury instead of going directly to the token holders, UNI was more attractive to investors with a longer-term perspective who prefer the approach of accumulating capital in the treasury in the early years. “

Handle, SushiSwap offers a more community-oriented and regulated system that generates direct income Token holders from the commissions generated on the platform while Uniswap is working on a long term plan to create a unique DEX that will meet the needs of all traders..

The advantage of being the first to act and Dominant liquidity funds have allowed Uniswap to compete with companies like Coinbase in terms of trading volume and longtime proponents of the cryptocurrency appreciate this achievement.

DEX weekly volume. Source: Â Dune Analytics

SushiSwap rose from the ashes to create a community-driven project that those who are just starting out with crypto will appreciate. for its ability to generate instant income.

SUSHI also recently saw an increase in trading volume on Uniswap, which shows The battle for the title of best DEX has just begun in these first rounds of the cryptocurrency bull cycle.

SUSHI tape on uniswap. Source: Glass knot

The DeFi sector is just gaining the attention of the traditional financial sector and as liquidity, total lock value and the price of the state token of each platform hit new highs for both Uniswap and SushiSwapIt will be interesting to see how the two platforms continue to differ in their development.

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