Disclaimer: I don’t necessarily like someone copying and pasting a project and the original creator losing out. I’m just here to explore both sides of the argument.
Background
Before we get in, the TLDR of this all is:
Anon dev called “Chef Nomi” creates Sushi Swap - a Uniswap clone by deploying the exact same smart contracts
The Chef adds a token called $SUSHI which can only be earned by depositing Uniswap LP tokens (think of them as receipt tokens from Uniswap)
Since Sushi contracts now hold Uniswap LP tokens, the owner can call `migrate()` and move all of the tokens deposited in Uniswap directly to Sushi
As of now over 57% of Uniswap’s liquidity has moved into Sushi swap causing Uniswap backers to get a little on edge
Community
The bit you’re probably wondering is why would a bunch of randoms on the internet move over $1b into an unaudited, anon protocol? Well you could just say “yield farming” and you wouldn’t be wrong. Some people are already up 300%.
But that’s just a surface level take. Sushiswap represents a deeper, underlying tension which I understand.
Backstory: I grew up in New Zealand and have progressively moved to larger cities (until I reached Sydney, Australia). Growing up I saw the TV show Silicon Valley, read Tech Crunch headlines and from a distance it always seemed like Silicon Valley was an exclusive party where everyone’s having fun getting rich together. There’s nothing wrong with that but eventually what I noticed every time I tried interacting with certain folks from the Valley/US Tech there was this sense of “elitism”.
It’s not direct but very subtle and can be felt by the human psyche. Little things such as the disinterest in getting to know you simply because you’re not in the “in” circle or you don’t have an obvious credential that makes you useful to them. I’m not saying all people are like this, in fact some people are on the other extreme end and helped me immensely simply because I was young and hungry. What I’m describing is something I felt a lot more prominently in comparison to other social circles and others outside of the Valley have felt this as well. Now what’s interesting is that this same elitism in Crypto is 100x magnified since the in-circle is the entire world and certain cities are just part of the ecosystem. Tables have flipped. While the rest of the world relied on ICOs to raise money, Valley folks didn’t have to since they had millions of dollars of venture capital funding at their disposal. They didn’t need a token since they could just make a few phone calls and do the round.
Teams such as Aaave, Synthetix and more were always looked down on for doing an ICO since that was meant to be a scam. However I’ve spoken to both Stani and Kain and their story is the same: “We couldn’t raise money from the Valley so we chose an ICO which allowed anyone in the world to get in”. I’m paraphrasing here but the feeling is the same. Now while 2018 & 2019 were about looking down on teams which had a token, their communities were highly engaged and quietly building. 2020 comes around and now tokens are cool and the communities are benefiting by making life changing sums of money.
Converting $2,500 to $350k is paying for 1 partner’s salary in a VC firm but it’s game-changing for certain people. Think about it, DeFi is making people financial freedom-level money by building alongside.
Okay so coming back to Uniswap, they just raised their Series A from some of the top investors in crypto. However to other parts of the community it reinforces a negative signal that “here are the insiders who are making crazy money while you lose out since you don’t know them personally”. Now I totally understand there’s a balance of perception vs needs since you actually need to raise money to fund operations. I get that. However this is simply what majority of the community sees who doesn’t have equity in Uniswap. Now when Sushiswap comes around sure it’s got high yield attached to it but it represents a chance to fight against the traditional way and level out the playing field. The best take on what will happen to SUSHI is probably Alex Gausman:
The Flip Side
The point of DeFi Weekly isn’t to lean heavily towards one side and neglect the other. I simply want you understand both sides and improve your perception about why things happen in the market. So for this part I want to take the counter argument and tell why the other part of me dislikes Sushi.
Firstly, as a founder it’s really scary when someone takes your idea and runs with it. I can’t imagine what happens when someone copies line for line and takes 50% of your users in an instant. Building something new is really, really hard. I’ve always got the highest respect for people who step out of the norms to create something to life since it takes an enormous amount of personal sacrifice. Building for years on end and iterating is really tiring in all aspects of your life.
I relate to this at a deep value and completely agree with Hayden that getting rich for copying someone else’s work is anti-ethical and not something we should stand for as an industry. In this context Chef Nomi doesn’t take any SUSHI tokens but the concept is the same of you taking someone’s code and extracting the core value and switching out the value capture mechanism. I personally don’t think Uniswap is going anywhere since users trust the brand and the quality of the product being produced is great. However it is a worry that will keep the team on edge given that Sushi represents the people and uses deep emotional appeal to bound the community together. If you haven’t already, the founding story of Uniswap is a great read and I love telling people the story when they ask the power of a single developer in DeFi:
Investor Implications
I think the smartest investors in DeFi are going to start realising that
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