Is the bankruptcy epidemic also spreading to the decentralized part of the digital economy built around cryptocurrencies? This is what the latest official declarations of Matthew LilleyChief Technology Officer (CTO) of Protocol SushiSwap (SUSHI). And according to his explanations, this historical vampire of the leader Uniswap (UNI) would be bloodless.
A situation to be directly linked to the very significant drop in activity recorded in the DeFi sector since the end of 2021. With a total value locked (TVL), all networks combined, passed from 170 to 39 million dollars over the last 12 months. And in the case of the decentralized SushiSwap platform, a TVL divided by 17 since its November 2021 ATH above $8 billion.
SushiSwap drowns in Miso
Figures that show how the SushiSwap platform is currently facing structural difficulties. With this little reminder not to be overlooked, which makes it possible to understand that even the best vampire of a popular protocol does not acquire the strike force – and resistance – of the market leader that it has tried to strip of its liquidity providers. To the point of seeing Matthew Lilley, Chief Technology Officer (CTO) of SushiSwap announcing on Twitter closing the SUSHI (Kashi) and launchpad (Miso) lending options of the protocol.
” We have made the decision to advise against Kashi (Sushi Lending) and Miso (Sushi Launch Pad). Kashi, for a number of reasons, had some design flaws, was running at a loss, and lacked the resources to devote to it. MISO suffers from a lack of resources”
And in both cases, a “lack of resources” is put forward to explain this rather radical change of course for the year 2023. With a desire to refocus on the cryptocurrency exchange activity which is at the heart of this protocol. And as a result, “the removal of a number of products” whose “support” “could not be justified by the size of the team and at the expense of our beloved SushiSwap”. Even though the promise is made “to launch successors to these products in the future once we have the necessary resources”…
Because in fact, the SushiSwap platform does not have more than 1.5 years of activity cost in its coffers. A situation that “requires immediate action to ensure sufficient resources for uninterrupted operation”. And according to Jared Gray, CEO of this project, the objective will be to reduce annual expenses so that they do not exceed 5 billion dollars. This could involve, among other things, a budget freeze in costs related to “non-critical personnel and infrastructure”.
SushiSwap – “Concentrated liquidity” objective
Yet this protocol had announced the raising of 5.3 million dollars from the giant GoldenTree last October. This in order to accompany him in the implementation of a V2 then exciting, but which visibly “runs out of steam”, according to the declarations of Matthew Lilley. This even if it does not fail to recall that SushiSwap’s V2 architecture “is a work in progress (…) on the right track” whose evolution seems “satisfactory”.
With at the forefront of this new SushiSwap recipe, the implementation of a principle of concentrated liquidity presented as “difficult”. But whose first iteration should see the light of day in the first quarter of this new year, according to statements by Matthew Lilley. With the objective of allowing liquidity providers to select a range on the cryptocurrency price curve to provide liquidity. This in an attempt to reduce the impact of impermanent loss which strikes many of them. A case to follow…