Editor's Note: This article comes fromChain Academy (ID: gh_16a912371734), Author: Blockchain Robin, reproduced by Odaily with authorization.

Editor's Note: This article comes from

Chain Academy (ID: gh_16a912371734)

Chain Academy (ID: gh_16a912371734)

, Author: Blockchain Robin, reproduced by Odaily with authorization.

Today, SUSHISWAP will complete the migration.

Decentralized finance is going through what could be one of its most defining moments. In less than 48 hours, a two-week-old startup attempted to drain liquidity from DeFi's largest exchange in a never-before-tried vampire attack, with $1.3 billion in tokens now at risk among.

Here’s a quick summary: An anonymous developer copied Uniswap and made SushiSwap, which functions exactly the same except it adds a token SUSHI, and token rewards for liquidity providers and token holders . Ten days later, the anonymous developer sold all his SUSHI in exchange for $13 million in ETH, and handed over control to the head of a centralized exchange, CEX. Then the CEO of the centralized exchange ushered in SushiSwap's original plan, which is to create its own liquidity by absorbing Uniswap's liquidity."On the face of it, this seems like a ludicrous food-themed scam. But even if SushiSwap is tainted by its founder's apparent betrayal, it represents an emerging model of building and investing in crypto. It might be a flawed early iteration, but it's still a new model. Those who cling to their old ways, at least this Wild West within the Wild West, may have to adapt."Some necessary background: Uniswap works by replacing order books on traditional exchanges with pools of tokens that match ETH, ensuring trades can always happen. Liquidity Providers (LPs) are incentivized by transaction fees and have no native governance tokens."Community-Oriented Features"SushiSwap announced on August 26 that it is

Evolution of Uniswap

, which adds

Community-Oriented Features", to further benefit the relevant actors - i.e. tokens."In Uniswap, only transaction fees are allocated to LPs. In SushiSwap, not only transaction fees, but SUSHI tokens will also be allocated to LPs, and part of the fees will be repurchased SUSHI and distributed to SUSHI token holders, so that even if LPs stop providing liquidity, they can still exchange funds by holding There are tokens that continue to earn part of the protocol's fees. SUSHI is also the key to participating in protocol governance.

Vampire Mining"But the main innovation of SushiSwap is that its plan not only indirectly competes with Uniswap by providing additional incentives, but also through its"to understand

exist"real world"Vampire Mining

You must first understand the concept of Uniswap LPs will get an LP token representing their deposit in DEX. The way for the initial participants of SushiSwap to earn SUSHI is to deposit LP tokens in Uniswap. Then these Uniswap LP tokens will be replaced by Swap for real assets, so that the liquidity of Uniswap becomes the liquidity of SushiSwap.

exist

It is almost unheard of to not only copy a business, but literally steal its customers. DeFi works as an infinitely interconnected ecosystem because the protocols on it are open source (they can be copied and built upon), and because they create things like Uniswap's LP tokens that become usable elsewhere composable components. These features make SushiSwap and its vampire scheme possible.

Vampire Squid Growth

SushiSwap was not only able to capture most of Uniswap's LP tokens, but also generated 1.5 billion liquidity in just 9 days, because farmers were eager to get LP tokens and deposit them into SushiSwap.

By September 4th, Uniswap liquidity reached 1.8 billion, of which 1.6 billion was already on the forked hook.

image description"Image source DeFi Pulse"Hero Nomi

The chef and founder of SushiSwap, Nomi, has become a rising star in the DeFi ecosystem at this time. The developer hiding behind the avatar of a cartoon character has pioneered a protocol that goes head-to-head with DeFi’s darling DEX.

Sure, he copied Uniswap directly, but it's fair game in a space where open-source platforms are the standard and expectation. The aura of the hero comes from his statement that he wants to create

People's DEX

CEX grabs the show

SUSHI was quickly listed on the centralized exchanges Binance and FTX. The corresponding background is that Uniswap has been gradually eating into the market share of their centralized exchanges, which may explain why Binance was so quick to list a nascent token issued by a Uniswap competitor.

FTX CEO Sam Bankman-Fried (hereafter SBF) even proposed that the project also be built on Solana, the blockchain that FTX launched its own decentralized exchange, Serum. SushiSwap on Solana will be able to use Serum’s order book for liquidity.

SBF has become the big whale of SUSHI. According to Alex Svanevik, co-founder of blockchain data firm Nansen, two wallets associated with Alameda Research, which he leads, have mined at least 9% of all SUSHI in circulation.

"image description"Image credit Nansen"Nomi's opinionated"

Nomi feels confident. After the two audits passed without major problems, it was proposed to carry out Uniswap's liquidity migration earlier than originally planned, and began to ask Uniswap founder Hayden Adams on Twitter."You are funded. You pay yourself a New York City salary. you have it all. so what are you complaining about?"he tweeted.

I do not sell any tokens. I pay the gas fee for the deployment myself. I distribute everything to the community except development funds. So, you say I'm an opportunist, and it offends me.

Nomi mentioned in the quote above

development funds"It refers to 10% of the SUSHI token issuance, which is allocated to the developer who builds the protocol - currently only himself."At the same time, the recent rally in the cryptocurrency market has faltered, with Ethereum, which hit a new high for the year, falling below $400 again in the first few days of September.

betray

Nomi once said."I don't sell any tokens", and on September 5th, the development fund controlled by him alone held SUSHI worth about 13 million U.S. dollars—all of which were exchanged for ETH by him. On Uniswap it is no exception.

There are no secrets in an open blockchain. Traders quickly picked up on the move, and the price of SUSHI plummeted more than 70% in a day to $1.2 after Nomi’s defection."After public outrage, Nomi says he did it because he"。

Caring for and helping the community

He promised to continue working with the project, but appeared to backtrack a day later, saying he hoped"the way forward"。

SushiSwap can do just fine without him"SBF Raid"SUSHI holders were desperate as SushiSwap seemed to be floundering in a puddle of mud with no takers — but they didn’t have to wait long. Within a day, SBF made a sudden effort to lay a road for Sushi

the way forward"SBF calls Nomi"。

pile of shit", and said the anonymous developer should relinquish control. While he didn't explicitly claim control, he made a clear case for why he should have it."He also emphasized that the proposal to build another Uniswap copy is still valid, and after this matter is completed, he will"Return 5 million SUSHI to the community in person"SBF detailed in a long twitter how he got involved with SUSHI and not just because of it"Offers great yield", but also because it

Shows the promise of DeFi",he"Really nice community owned AMM

able to prosper.

But according to Nansen’s Svanevik, while he’s been talking about the community and his belief in SushiSwap, wallets linked to SBF’s company, Alameda Research, have been farming and are also

sell off

SUSHI tokens. After all, money talks.

Nomi transfers control"In any case, Nomi did not jump ship. On the same day, the founder of the so-called fully decentralized and community-based DEX unilaterally decided to transfer the control of SushiSwap to SBF."At this time, the conspiracy theory that Chef Nomi and SBF are actually the same person reached a fever pitch, and some people continued to believe that Nomi was actually the CTO of the data provider Band Protocol. All of those mentioned here have denied any connection to the out-of-favor chef."Twitter Popularity Contest"。

SBF opened an open call on Twitter, asking who would like to be part of the multisig group that controls SushiSwap.

We'll take the top 20 by likes and vote them appropriately

, the private key will be transferred to the winner,

Sushi should go back into the hands of the community

In the two days after the transfer of control, a bug in the code was also discovered that could absorb Uniswap's liquidity.

clock ticking

The bug in the migration code was fixed yesterday, and the 48-hour countdown to SushiSwap's attempt to drain Uniswap's liquidity kicked off.

Less than two days before the migration, the price of SUSHI was still at a low of $1.2, and it is currently hovering around $2.8.

image description

Image credit Debank

It may be that triple-digit annual returns are too enticing for traders to resist. They may stick to farming SUSHI until the last moment, and then jump ship.

But some might stick around, lured by the promise of SBF that if they do, they'll get extra SUSHI. That means those behind SushiSwap could soon be responsible for shipping potentially hundreds of millions of dollars in tokens from one open protocol to another, with code that hasn't been tested yet and a bug popped up a few days ago.

We'll find out soon if they succeed.

DeFi has changed