Posted 5 months ago | by Catoshi Nakamoto
The story of SushiSwap, one of the mainstay trading DEXs in all of crypto, has all the makings of a classic holiday movie. Like every great holiday film starts with the promise of a Christmas to remember1, Sushi’s legendary beginnings as a fork of Uniswap, strong community formation and exponential growth promised a solid project with unlimited potential. Eventually, a lack of communication and too much developer control caused infighting and mass resignations2. A conflict that begged to be overcome, like Kevin being left at home while his family went on a trip to Paris.3 A Leaderless Sushiswap without direction was looking like disaster scene like we’ve seen in every holiday classic,4 and just when it seemed like there was no hope left, a Christmas miracle arrived, with news of top Avalanche developer Daniele Sestagalli proposing to take the project to new heights. Will SushiSwap become a holiday blockbuster, or a made-for-TV Hallmark Channel flop?5 Today we dive into the history of SushiSwap and what might be next for Sushi and Avalanche.Read More
Let’s get it.
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SushiSwap started as a fork of Uniswap and has quickly become one of the top multichain DeFi platforms. The project accumulated a strong following and developed a community that saw the project expand into not just crypto-to-crypto trades, but lending, staking, and NFT services.
Recently though, the platform has seen an exodus of its top developers. Chief technology officer Joseph Delong stepped down this month amid controversy, and core contributors OxMaki and Mudit Gupta left the project earlier in the year.
So what happened behind the scenes at SushiSwap that caused its development team to jump ship? Well, despite its early success, SushiSwap was plagued with drama and in-fighting, and was having trouble delivering on many of the new products it was launching.
Last year Chef Nomi, founder of SushiSwap, drained the SushiSwap development fund and sold it for millions of dollars worth of Ethereum. The Sushi community saw this as an exit scam, with Chef Nomi believing it was fair payment for their work. Ultimately the fourteen million in Ethereum was returned to the Sushi treasury, and Nomi announced that the community should decide what the payment should be.
This year, the price of Sushi started losing value, and the community was getting frustrated. Shoyu, the platform’s NFT trading platform, was promised to become a rival of Opensea. Unfortunately, the features of the much-anticipated platform fell short of being able to compete.
In the midst of this, developers asked to be paid, but the community thought that the amount they asked for was unreasonable. Sushi, the community-built DeFi platform, was slowly being taken over by a core group of developers: Chief Technical Officer Joseph Delong, and developers Omakase, Rachel, Keno, Nori, who the community felt were becoming an iron curtain for the project where no one could be hired on the team except through them. The community found them unprofessional and believed they weren’t delivering on their promises. The developers and the CTO left the project, and at one point OxMaki, who took over as development lead last year when Chef Nomi left the project, gave the community hope of a return to the project after the SushiSwap tokenization platform Miso suffered a three million dollar hack. The community was once again disappointed when Maki announced an advisory role for Sushi, but not a full return to developing the project.
Joseph Delong wrote an article about his shortcomings in leading the project as Chief Technical Officer. He believes that when he scaled the team to unsustainable numbers, he failed to equip them with the tools and planning necessary to succeed. In retrospect, he felt that he allowed the team to focus too much on their skill set rather than the product line, and he didn’t do enough to quell the infighting that was already happening when he was onboarded, which led to more infighting later. It was ultimately his communication with the team and with the community that Joseph felt was the biggest failure in his work with Sushi, as well as conduct on his personal Twitter that made Sushi look unprofessional. Things were looking pretty hopeless for the future of SushiSwap, until top Avalanche developer Daniele Sestagalli expressed interest in working on Sushi, a proposal that saw the price of sushi jump 10%. Sestagalli proposed to make Sushi a part of the Abracadabra and Wonderland ecosystem that he founded, and having himself and others added to the core development team of Sushi.
Wonderland is a fork of the Olympus DAO on the Avalanche Network, and calls itself the “first decentralized reserve currency protocol available on the Avalanche Network.” Wonderland and the Olympus DAO are projects that attempt to decrease volatility through staking, and promise exorbitant staking rewards of seven thousand plus percent APY. Check out our deep dive into Wonderland HERE.
Sestagalli wants to move into Sushi and keep its development alive, saying: “Together we can move DeFi in the right direction where Sushi builds an accessible decentralized exchange, used on all chains by everyone,”
In his proposal, Sestagalli suggests buoying Sushi with his own community called The Frog Nation Collective, and making Sushi a community token again instead of one that is highly centralized and controlled by developers. He proposes ending xSushi, a token awarded to Sushi stakers. In his mind, this would depreciate the legal entity that controls Sushi development. Along with being added to the Sushi team, Sestagalli would like to see Sushi’s mandate and governance become better defined.
Sestagalli acknowledged Sushi’s impressive list of chains and total value locked that at one point neared ten billion dollars. He believes that Sushi should focus more on volume, and strive to become the standard DEX on all chains. To do this, Sestagalli wants a full focus on the DEX, a change of tokenomics, change in parts of the team and a depreciating legal entity.
He believes that Popsicle Finance’s liquidity management, Abracadabra’s MIM stablecoin, lending and leverage, and Wonderland striving to be the biggest DAO in existence, will give Sushi the mandate it needs to become the biggest DEX on every chain.
The elves working on Avalanche and its native token AVAX has been doing very well lately, and AVAX has become one of the biggest projects to watch during this insane bull cycle. Launched in 2020, Avalanche is a platform that enables smart contracts, the creation of Dapps, subnets (blockchains built as offshoots of the core Avalanche platform) and custom blockchains. Avalanche is a proof of stake project, with validators that verify transactions based on how many coins they have. Some call Avalanche the next “Ethereum killer”, because it has the capability to do a lot of what Ethereum does, with significantly lower fees.
In late November the price of Avalanche jumped 33% in one week, and is up over 3,000% over the last year. The price surge was caused by an announcement by Ava Labs, a team that supports the development of the Avalanche blockchain. The announcement revealed that Ava Labs would form a partnership with Deloitte, a consulting firm that wants to use the Avalanche blockchain to improve security and speed of FEMA funding.
It wasn’t so much the news, but the timing that created the ideal climate for the price increase. Users were becoming more frustrated with exorbitant ETH gas fees, and good news about an emerging competitor was music to investor’s ears.
Many projects would benefit from development of SushiSwap through Avalanche. Top three Sushi projects that would thrive on the Avalanche blockchain would be Audius, Fantom and Enjin. Audius saw a major surge in September with the announcement of major investments from Katy Perry, Nas and Jason Derulo. Interest in the development of this project would bring the volume to SushiSwap and Avalanche. Fantom has seen a price run that has piqued investor attention in the open-source smart contract platform for digital assets and dApps. In late November the price jumped 21% after announcing its new partnership with 123Swap. Enjin plays a key role in the metaverse, providing an end-to-end solution to launch NFT projects.
Trading these assets with lower fees on Avalanche through SushiSwap would be a win-win, and could turn this complicated Sushi saga into a Christmas movie classic, complete with a happy ending.