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SushiSwap rose and fell, SBF has a say

Photo of: Dennis Ramos
by Dennis Ramos

The last few days have been dramatic for the crypto markets, especially the DeFi sector. The DeFi investments have generated a 3,000 Year to date returns for many investors who seem to have taken the right choices, but many others experienced more than 80% losses this week due to the mounting and growing rumors of scam-worthy assets being traded in the market. 

Market sentiments matter a lot and because these tokens look very promising at the start, which takes them to unimaginable heights. But it is later the internal design and robustness of the token that has to do the talking. One such token in which people pinned their hopes for great returns is the famous $SUSHI protocol which before and after its release promised incredible gains to its participants. But, the last 48 hours have been nothing short of dramatic. 

For those who have not done their research, SushiSwap was created by an anonymous character called Chef Nomi. The project is a fork of Venture capitalist-supported UniSwap which is a decentralized exchange. UniSwap is undoubtedly the DeFi favorite, with its daily trading volume surpassing that of Coinbase also. 

Source: Sushiswap.org

Sushi came with a promise of uptaking all the best there is about Uniswap and taking measures that would improve its governance. It created a community-owned fork using a vote token called SUSHI. Whoever did wish to join the community could become a liquidity provider by staking SUSHI and ETH on UniSwap. This was then to be transferred to SushiSwap on its launch. Everyone hailed the SUSHI token as the new rising star born. It also took 77% of the daily trading volumes on UniSwap on September 1’st with its all-time high market cap nearing $278 million. Just a few days after this, rumor mills said that Chef Nomi cashed out $15 million worth developer funds which caused the token to crash 88%. The withdrawal amounted to 20,039 ETH and 2,558,644 SUSHI from the dev fund.

Following such news, Nomi tried to convince the community that it was not an exit scam.

Vitalik Buterin failed to agree and tweeted back,

But amidst the Twitter backlash, it was Sam Bankman-Fried (”SBF”) who was motivating Chef Nomi to hand back the control of it. Chef Nomi then unexpectedly announced on Twitter that he is transferring control to SBFand offered to transfer all keys to the project. The news got a positive reception with an increase recorded from $1.12 to $3.38. 

Upon questioning, SBF said that their team was quoted,

Make sure the transition happens and happens effectively. And then the multisig transition happens. And after that, I no longer have the keys. Formerly my duty here is just those two things. And communication about those. Once the migration has happened, I have a lot of ideas of what I’d like SushiSwap to do…composing it with margin trading, borrowing, and lending, and building out a version on Serum. But that would not be something I would unilaterally do. It would be up to the community to decide what happens.”

Many holders had threatened legal action against Chef Nomi, and it is still unclear whether higher authorities will be a part of it too.