SushiSwap Update: Exit Scam? Takeover?
SushiSwap, the food-inspired DeFi project which aims to fork Uniswap, now has a new owner. After the anonymous developer Chef Nomi market dumped $13M of dev funds, causing the price of SUSHI to drop by 88%. The project is now led by FTX CEO Sam Bankman-Fried, in what appears to be a takeover. Here we explore the latest SushiSwap update, from exit scam to takeover.
Creator pulls an exit scam?
After repeatedly telling the community he would not dump the dev share tokens, Nomi withdrew over 20,000 ETH and 2,558,644 SUSHI from the dev fund. He then proceeded to sell all of his Sushi to ETH, which caused the community to cry exit scam. However, Chef Nomi did stick around, claiming that he did not exit scam and that he deserved the funds as he created the project.
I did the recent move because I care about the community. I'm taking IL for you. But all I received was blaming and FUDing.
— Chef Nomi #SushiSwap (@NomiChef) September 5, 2020
Here's what happened. The devshare part of me. I converted them to $ETH. I stop caring about price and I will focus on the technicality of the migration.
The crypto community did not see it this way, and the price of SUSHI continued to plummet. As a result, prominent developers from the DeFi space called for action, advising the remaining dev funds should be under a multi-sig. Andre Cronje, creator of Yearn Finance, asked if he would be returning the dev funds as it appeared Nomi was walking away.
SBF the Sushi Saviour?
It was at this point that SBF took over the protocol, announcing that the keys of SUSHI will move to a multisig to ensure a future of decentralized governance. He also called for the head developer Nomi to step down immediately, criticizing that his actions had caused too much damage to SushiSwap. The community reacted very positively, and the price of SUSHI stabilized. SBF summary of the situation is below, where he mentions that SushiSwap will also be coming to Serum DEX.
a) Nomi sucks and hurt the community
b) Sushi shows promise as a dynamic AMM built by the community
c) If Nomi doesn’t step down, it’s over for Sushi.
d) If Sushi adds a division on Serum, we’ll give 5mm SUSHI to farmers
e) Either way, AMMs coming to Serum.
A preplanned acquisition?
Many industry players reacted very positively to SushiSwap update, being acquired by FTX/Serum/SBF. The price of SUSHI was on its way down to the trash can, and this acquisition has potentially saved a lot of investments from rotten fish. The CEO of BitMEX, Arthur Hayes, stated:
“Please save me from a bad $SUSHI investment SBF. He is our new master chef.”
However, there was a more sinister talk going around the crypto underbelly. One that put forth a theory that this whole debacle was pre-planned from the start to damage Uniswap.
And is it so crazy? Sam’s biggest competitor for Serum would be Uniswap. Therefore, he stands to gain a lot by splitting up the liquidity of Uniswap and damaging DeFi on Ethereum. Not to mention, how SushiSwap appeared overnight and was able to gain near-instant listings on FTX and Binance. Sure this is a tinfoil hat theory, but wilder things have happened in the world of crypto.