SushiSwap Volume -75.6% After the “Centralizing” Proposal Came Out

2021-07-20 07:13:43 · 42 views · 5 min read



Recently, a drama stimulated a heated discussion about SushiSwap all over the social networks, which can be reflected in its social signal score.

The dex’s social signal sharply rose to 10.34K on 15th Jul and has kept increasing since that day. 



What happened to SushiSwap? This top DeFi protocol is now aiming to attract institutional investors, chasing a growing trend in the DeFi sector.



Sushi aims to raise capital and deploy it into productive assets via safe yield solutions, including Yearn vault, seed liquidity in key Kashi markets, and LP in a stable pool on Sushi to generate liquidity.



The capital will be raised by selling its $60M worth of $SUSHI to VCs, which will be converted into xSushi and receive xSushi yield whilst vesting for a “6-month cliff followed by 18-month linear vesting.” These $SUSHI tokens are proposed to be offered at a 20% to 30% discount to 30-Day TWAP.

The proposal was made by developer 0xMaki and has turned into a heated controversial debate in the community. As DeFi protocols by nature are supposed to be decentralized, to welcome VCs to the protocol using 25% of its treasury is obviously the complete opposite of this notion. 

The SushiSwap community gets negative about this proposal about selling discounted tokens to VCs. SushiSwap community members were quick to show their disapproval in the project’s governance forum

(A piece of reply to the proposal from users in the forum)



Whether this drama affects users’ confidence in SushiSwap’s operation and $SUSHI future price? Let data speak for itself.

Actually long before the drama, the drop has already started since mid-May and has continued for 2 months. The dex trading volume decreased 96% from ATH $3.42B on 19th May. And the trade counts decreased from 29.13K to 12.32K, decreased by 57.7% in the same period. 



After the proposal was issued on 8th July, the daily trading volume continued to drop further from $410m to below $100m latest. 



Together with the $SUSHI token price, it has had a 16.7% price drop in the past 30 days. You can find from the dashboard above that the price has a high correlation with its volume and trade counts, as the curves move in the same direction.



What’re your thoughts on the token sale discount to VCs? Do you feel this move is centralizing the dex? Share your opinion with us in the comment below!


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