"It's Not About Fighting for People Already in DeFi, But About Bringing More People In:" SushiSwap's 0xMaki

In this week's episode we interview 0xMaki, an anonymous DeFi developer contributing to SushiSwap and Yearn Finance protocols. We talk about growing Sushi beyond its drama-filled beginnings as a fork of Uniswap, into a DEX that can hold its own as the second-most active trading platform in Ethereum DeFi. He goes into the main pieces that set SushiSwap apart with its margin trading and a soon-to-be-released smart contract suite to easily launch tokens. In the works is also an NFT trading platform. And all of this innovation is coming from a community of contributors, and not from a centrally organized team. 

We talk about Uniswap V3, and he says that while the concentrated liquidity concept is interesting, he doesn’t think it will be the holy grail for AMMs and says Sushiswap is also working on a way to make liquidity pools more capital efficient —though he didn’t go into much detail on how. He shrugged off the fact that Uniswap introduced a business license to v3 and said SushiSwap wasn’t planning on forking the code. In the end he says, it’s short-sighted for DEX competitors to be fighting among each other, as they should be fighting outwards, to bring more people into DeFi, and not inwards trying to win over the people who are already here.  

The podcast was led by Camila Russo, and edited by Alp Gasimov. Transcript was edited by Owen Fernau and Dan Kahan.

🎙Listen to the interview in this week’s podcast episode here:

You’re a free signup, which means you get only part of the transcript below. Subscribe to never miss out on any content ($100/yr, $10/mo). Click here to pay with DAI. Price is increasing to $15/mo next week!

🙌 Together with: 

  • Zerion, a simple interface to access and use decentralized finance

  • Balancer, one of the leading DeFi automated market makers (AMM) for multiple tokens. Dive into their pools at https://balancer.finance/!

  • Kraken, consistently rated the best and most secure cryptocurrency exchange, which can get you from fiat to DeFi

  • Aave, an open source and non-custodial liquidity protocol where users can earn interest on deposits and borrow assets. 

0xMaki: Yeah. Sure, I've been involved in crypto since 2015. Since then I kind of lost touch with crypto until I discovered Ethereum. And then in 2017, I saw the whole kind of ICO mania, didn't participate or partake too much. In 2018, when the bear market came, started to see some very interesting projects growing. 2019, we have like, the whole DeFi kind of protocols coming up to life and 2020, where it's kind of the pinnacle with DeFi summer. So that's kind of where I took action and started to get involved more, I guess, closely with the community where I could.

Basically, I saw this project, SushiSwap, that was open to the community. I just jumped in and started to get everything moving, making sure that this was not left for dead basically. Because I think a very community-oriented project was important with very good values similar to Yearn, inspired by Yearn actually. And then here we are today, one of the top AMMs. So that's kind of my background. 

Camila Russo: Cool. And just briefly, I mean, were you a developer? Did you have technical experience before going into DeFi? Or were you more kind of a finance person?

0x: I was involved in Web 2.0, mostly. 

Spicy Sushi

CR: Oh, got it. Cool. So when you got into SushiSwap, that was I think one of the biggest dramas in DeFi’s short history, the whole forking of Uniswap, Chef Nomi. For those who are listening, SushiSwap is a fork of Uniswap, right now the biggest automated market maker or decentralized exchange in the space. And SushiSwap forked, or copied the code, and added a few things, including a token which Uniswap didn't have before. And this rallied a lot of support, and also a lot of money. 

And then when Sushi was kind of at the peak of its post-fork success, Chef Nomi, he was one of the people who started this project, he ran off with the funds, with $14 million worth of ETH at the time, but then returned all of the funds again. So this was just, I mean, it was like a soap opera. I remember covering it. It was incredible, the story, completely crazy. 

So I would just love to have the opportunity to hear the side of the story from you. I know it happened, kind of it's like ancient history six months ago, or however many months ago for DeFi. But it's still to me one of the most riveting stories in DeFi. So we don't have to kind of talk about this too much. But I would just love to hear from you how that was like, especially the moment when you saw that Chef Nomi had run off with the funds?

“...back then, I guess it was the most crazy story we saw in DeFi for the year. But since then, we kind of evolved stronger than just a fork.”

0x: Yeah, it wasn't expected. But I think everything has been sort of mitigated, and we kind of grew stronger from all of this. This is kind of past history, and to be honest, it wouldn't be fair to just think about Sushi with just, I guess, the initial story. It's way more than a fork today, we're more than 14 people full-time. We have a very broad suite of projects that are emerging.Just two weeks ago we had Kashi finally launching on mainnet, which is very exciting to me. And then we have MISO coming up, probably end of this month, if not, in May. 

So yeah, I mean, back then, I guess it was the most crazy story we saw in DeFi for the year. But since then, we kind of evolved stronger than just a fork. And I think that with our new AMM coming very soon, we're going to prove that this is more than just a fork. And the market is pricing us like it too.

Differences from Uniswap

CR: These are definitely points that I want to talk about. This idea of that you are more than just a fork, I'd love to hear the breakdown of this. So the obvious thing when the fork first happened was the token, now Uniswap has its own token. But what are the main differences with Uniswap? Like, what would you say are SushiSwap’s biggest innovations right now?

0x: If we're talking just about the token, Sushi has the fee switch activated, which is basically like accruing value to Sushi holders. Aside from that, right now we're seeing innovation on the front of Kashi, where we're talking about money markets for DeFi. We're fixing the oracles at the moment so we can enable it on any single market that is on Sushi. Because you know, this is kind of the very key aspect, I would say, in making sure that it is safe and secure, which is not very easy to do, because you need very efficient, very accurate price data. So we're working on this.

We did start with Chainlink markets to make sure that we had a very accurate price oracle. And then we're going to be expanding this as soon as possible. What is very interesting is at the moment, people can create their own pair, but this will become trustless very soon. We're thinking by end of the month, we're going to… Basically, the thing is we were thinking about launching, I guess, later but we decided to launch earlier with a rolling basis update. So right now, we have a limited amount of markets, I think it's 10 if I'm not wrong, enabling you to long or short with leverage.

“But this is what is interesting is the innovation doesn't come necessarily from the very top of the team, it comes from the community. They're asking or voting on what they want to see happening and then we execute following their lead basically.”

So that is one of the innovations we have recently that is being worked on by another team instead of Sushi, which is basically like the perfect launchpad for every single digital asset, whether it is NFTs, whether it is a tokenized object, whether it is a ERC-20. This is the perfect place to conduct, I would say like a presale, or something sooner. So a sale like the Hashmasks that went quite viral in the ecosystem could be enabled by MISO with a tranche-style option. This is the sort of innovation we're working on and pretty much at the moment, that is what’s in the pipeline.

So if we’re talking about what is going on for Q3, we've been seeing a lot of traction in the NFT segment, took some interest by our community. There has been like a proposal to start working on where they charge for NFTs. It’s still like the ideation process. But this is what is interesting is the innovation doesn't come necessarily from the very top of the team, it comes from the community. They're asking or voting on what they want to see happening and then we execute following their lead basically. 

Sushi Structure

CR: So it's interesting what you were saying about all the innovation that's going on in this SushiSwap ecosystem and how that innovation is happening is also interesting. Because, I think, we're seeing different models of managing protocols arise. One is a more traditional model of a centralized company building a decentralized protocol, that's kind of more of the Uniswap, Compound model. But then there are other more community-led models of building protocols. And I think Sushi is an example, Yearn is another example, where all these proposals and changes are coming from the community instead of from a centralized structure. 

So obviously, that has its pros and cons. I wonder how you're experiencing this type of work. Like does it get to a point where it's just hard to get things approved, too many voices? Maybe, is it hard to get quality code shipped if there are just too many chefs in the kitchen, I guess, is a good analogy? It might get hard to actually cook something or make a Sushi roll. What do you think about the difference between the two approaches?

0x: I think what is very interesting and what we see kind of forming up inside of Sushi is, we have distinctive teams actually working on different products. So you can see MISO, it's being built by a very different team than the team building Kashi. Ultimately, all of them are adhering or leveraging our own sovereignty, our guidelines that we've created in-house, to make sure that everyone is on the same page. We're also using the same stack for the front end, and so on, to make sure that everyone is able to switch seamlessly between each other’s project. 

And then, so all of these SWAT teams, if you want to call them, are all dependent on a central “design department” or PM, kind of making sure that all the gears are well oiled up so there's no blockers or anything like this. So ultimately, we're just seeing a very different type of coordination happening.

And I'm actually very surprised to, I've seen someone working on solving this, and it's called Coordinape. It's the first product here you see that it's kind of adapted to this new reality of you don't know who you're going to be working with in maybe three weeks or four weeks potentially. Because some people just want to get involved but don't want to full time. So they're literally just coming in being “contractor” for two to three weeks and Coordinape is solving all of this. 

“...all of these SWAT teams, if you want to call them, are all dependent on a central “design department” or PM, kind of making sure that all the gears are well oiled up so there's no blockers or anything like this. So ultimately, we're just seeing a very different type of coordination happening.”

So it's very fascinating to see people finding solutions to problems that were not a thing back then, or I would say, in their normal work environment. But it can get very messy to kind of recruit all of these Telegram channels, Discord groups, and so on and so on. Ultimately, it's part of the, I would say, model that those are at the moment. And once we have a full, perfect blueprint, everyone else is going to be using it. But at the moment it’s still in the experiment phase, everyone is figuring out what they can do, how they can do the best way and so on. So it's less efficient, I would say, but we're getting there. We're getting where it should be done. So ultimately, it's the same result.

CR: I mean, it's definitely fascinating to see these new business models or just working models emerge from this decentralized ecosystem. And yeah, maybe being a full-time employee for a company is something of the past or something that's simply not really part of this new era, this new kind of finance. But instead you are a contributor, not an employee and a contributor to many different projects, not a single project. 

And I mean, the way that payroll is run is different, the way that teams organize is different. It's just really interesting to see this kind of play out real-time and how teams are organizing accordingly. But if it's not more efficient, why do it? Like what's the main reason for working in this way, in this kind of DAO system?

0x: No one in my city has that much experience. So I think that you're limiting yourself if you are trying to hire locally. You can hire “remotely.” But for this type of project, just setting up a legal structure is quite the hurdle. It's very difficult. I don’t see why would we be building the future of finance from companies? I think DAOs are the future too. And ultimately, like I said earlier, we're still figuring out all of the details. And you know, like, everyone is sort of not being happy with the current context of Snapshot and so on. But it seems been working very hard in making sure that Snapshot actually becomes a very good way of managing DAOs where you don't need… Like it is “as effective as on-chain” bonding with a Compound governance contract or the Aave one. 

“I think that you're limiting yourself if you are trying to hire locally.”

So I think we're going to get there. And I do think this is the best way to work, to gather people who are passionate about getting involved in the space, there's way less barrier. We don't care if the person is from India. We don't care if the person is from Europe, South America, etc. Everyone can be contributing, and there's no problem with getting the person paid, or else via bank. So, that's why we're doing it. 


CR: Yeah, it's awesome. And last question on this topic, but why be anonymous? I mean, there's obviously kind of like the regulatory side to it. But yeah, is it just that, just reducing risk or just something else?

[ … ]

Paid subscribers have access to the full transcript.

Subscribe now so you don’t miss any of The Defiant content. Subscribers reading this post: Head to posts marked with the little lock to see the full content.

The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Sign up to learn more and keep up on the latest, most interesting developments. Subscribers get full access at $10/month or $100/year, while free signups get only part of the content. Click here to pay with DAI. Price is increasing to $15/mo next week!