The newly-announced SushiSwap brought another craze in the decentralized finance (DeFi) industry this weekend.
The new decentralized exchange protocol called SushiSwap surpassed the amount of $750 million of total value locked in it just a few days after launch. The protocol reached the $46 million trading volume yesterday. As DeFi trend does not seem to run out, decentralized exchanges (DEX) and DeFi tops the new highs.
SushiSwap, which calls itself as an evolution of Uniswap with its own tokenomics, announced about the project release last Wednesday, August 26. Based on the Uniswap design, the protocol, however, offers additional incentives for liquidity providers.
According to its official blog post, SushiSwap offers SUSHI governance tokens to the protocol users as the stimulus to contribute to its liquidity pool. This is the main difference from Uniswap that allows earnings only from actively provided liquidity, claim the protocol developers:
With SushiSwap, one can also provide some liquidity into a pool and earn rewards in the form of SUSHI tokens. However, unlike Uniswap, those SUSHI tokens will also entitle you to continue to earn a portion of the protocol’s fee, accumulated in SUSHI, even if you decide to no longer participate in the liquidity provision.
As SushiSwap users could benefit from providing liquidity or simply holding native SUSHI tokens to receive part of the fees, the protocol came wildly popular and locked the value of over $750 million within the first days of launch.
According to CoinGecko, the assets price skyrocketed last Friday, as it increased monumentally and reached the record high of $168.91 last Friday. The SUSHI token generated over the highest $46 million volume the same day.
A day later, however, the protocol crashed back to $0.7 losing nearly all of its value within hours. The crypto community started guessing what caused the sudden fall, meanwhile the popular trader Hsaka claimed that the fall of SUSHI token happened as one of its top holders dumped it:
Pump and dump is a kind of financial market manipulation when the assets price is inflated due to the misleading and exaggerated statements. The holders, that got assets before the pump, exploit the price growth, and sell their assets at the top price then.
Additionally, SushiSwap is not audited yet, which leads it to be vulnerable and risky for a moment. As DailyCoin reported previously, another non-audited DeFi protocol YAM Finance also showed the impressive performance and even attracted over $500 million in less than 24 hours. However, the experimental protocol collapsed in the upcoming hours due to a fatal bug in its system.
The record weekend for DeFi
With the impressive performance of SushiSwap, the whole decentralized exchange industry increased by more than $720 million during the past week. According to the data of DeFiPulse, the total value locked on DEXes grew up to the record highs $2.13 billion and sits at a slightly lower rate at the time of publishing.
Meanwhile, the Uniswap pool, which also covers the newly-released SuShiSwap, showed its best-ever results, processing the massive trading volume of $426 million during the past 24 hours. According to Uniswap’s inventor Hayden Adams, the volume on DEX protocol even surpassed the one on the biggest crypto exchange Coinbase:
Decentralized exchanges are the second best-performing sector after lending protocols of DeFi industry, with over $2.11 billion of a value locked. Meanwhile, the whole DeFi sector accounts for over $7.83 billion at the time of publishing, which is more than double compared to the $3.72 billion of July 31.