SushiSwap Pulls Off $800M+ Uniswap Vampire Scheme
Also, Perpetual Protocol and HEGIC launch tokens with new sale mechanism, Ren and UMA team up for Bitcoin-based yield dollar
Hello Defiers! Here’s what’s going on in decentralized finance:
SushiSwap completed the migration of liquidity from Uniswap successfully
UMA and Ren team up to offer a Bitcoin-backed stablecoin
Perpetual Protocol and HEGIC test new token distribution mechanisms today
and more :)
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SushiSwap Drains Uniswap Liquidity. Still, Everyone Won
DeFi experienced what seemed like its first-ever hostile takeover today, except instead of stock buyouts and management shakedowns, it was driven by users switching platforms following their own economic incentives.
Crypto capitalism at its finest.
SushiSwap, a fork of Uniswap, successfully migrated Uniswap liquidity into its own protocol. It was the first time the scheme that has come to be known as Vampire Mining (thanks to crypto analyst Martin Krung and Defiant contributor Cooper Turley), had ever been attempted.
Half of Uniswap
There was about $810M of tokens in SushiSwap, or 55% of Uniswap liquidity, when the migration started earlier today. By the end of the process, value in SushiSwap had increased to about $860M, according to DeBank. Total value locked in Uniswap has more than halved since yesterday to $430M, today according to DeFi Pulse.
Still, Uniswap has hugely benefited from SushiSwap; total value in the protocol is up by 50% from $285M, before SushiSwap launched. Thanks to the SushiSwap frenzy, it was able to overtake Coinbase Pro volume two weeks ago.
For background, traders poured tokens representing deposits in Uniswap liquidity pools into SushiSwap to get SUSHI token rewards, and those who kept them there through the migration got extra tokens. The migration consisted of swapping Uniswap LP tokens for their underlying asset, and taking those tokens to SushiSwap.
SushiSwap was able to pack many seasons worth of soap opera drama in the two weeks since it launched (read The Defiant’s take on HERE and HERE), but the takeaway so far is that it’s been a net positive for DeFi.
It hasn’t fragmented liquidity, like some had feared. Instead, it grew the pie, drawing more people into both Uniswap and SushiSwap. Users also won: they have another choice of AMM. The biggest losers so far are SUSHI holders who founder Chef Nomi dumped his/her tokens on.
SUSHI price signals the market is becoming more bullish on the Uniswap spinoff. It continues to rebound from its $1.2 low, up more than 20% today to around $3.
Image source: CoinGecko
UMA & REN Team up for Bitcoin-Based Yield Dollar
UMA and Ren Protocol are teaming up to offer a Bitcoin-backed stablecoin.
The price of UMA’s uUSD stablecoin will tend towards $1 as it approaches its maturity date, and will be redeemable for $1 of the collateral asset at expiry. In the meantime, the asset fluctuates in value in line with market demand. In the case of uUSDrBTC-OCT, the derivative will expire on October 1st.
With this new partnership, users can mint uUSD depositing Ren Protocol’s permissionless Bitcoin-wrapper, renBTC, at a 125% collateralization ratio.
Those who mint yUSD and provide liquidity to this Balancer pool stand to earn a weekly allocation of 10,000 UMA and 25,000 REN.
UMA, whose $900M market cap token was recently listed on Coinbase, is doubling down on its innovative priceless synthetics. It’s the synthetic assets protocol’s second liquidity mining opportunity, following the ETH yUSD campaign which started last month and continues today.
The move makes renBTC the second Bitcoin wrapper to be used as collateral on a major DeFi protocol after wBTC, and should continue to bolster demand for Ren Protocol’s trustless bridge, which has ported $171M in BTC to Ethereum since it’s inception less than half a year ago.
DeFi Protocols Are Testing New Token Sale Mechanisms
DeFi protocols Perpetual and Hegic are listing their tokens with new distribution mechanisms aimed at reducing front running and price speculation.
Perpetual Protocol, a decentralized perpetual contract trading protocol that allows up to 20X leverage on long and short positions, will be the first DeFi project to list its token via a Balancer Labs-based Liquidity Bootstrapping Pools. Balancer’s LBPs have a high starting price so that there’s no benefit in rushing into the pool before others. The PERP token distribution starts today.
HEGIC, a decentralized options platform, is using what it calls an Initial Bonding Curve Offering, for its sale today. Every HEGIC IBCO participant will have the same price of 0.0000057 ETH / HEGIC (~$0.0027) for HEGIC tokens. During the IBCO contributors’ liquidity will be pooled and settled, and tokens will be claimed after the sale ends. That means there will be no difference in settlement prices for the contributors.
NFT Platform Rarible Closes Seed Round With CoinFund
Rarible, a digital art-focused NFT platform, has raised an undisclosed amount in a pre-seed round closed by crypto investment firm CoinFund.
“The investment will help Rarible develop a community-governed, blockchain-based NFT marketplace that enables a direct relationship between digital content creators and buyers,” Rarible’s announcement said.
CoinFund supports its investment with the view that blockchains and NFTS will enable ownership over digital assets, founder Jake Brukhman wrote in a blog post.
“We can view NFTs as liquid intellectual property (“liquid IP”)  for all forms of digital content, a marketplace which is measured in trillions of units that is about to be tokenized,” the blog post said.
CryptoCompare reached out to several high-profile decentralized finance projects and asked them about the future of the space, potential use cases, and more. One answer quickly stood out: they all believe Ethereum (ETH) won’t be replaced as the go-to blockchain network for DeFi. The following data and responses come from some of the leading decentralized financed protocols, including Augur, Argent, DDEX, Balancer, Nexus Mutual, Kyber Network, Loopring and Staked.
DeFi Protocol Linear Finance Raises $1.8 million For Cross-Chain Synthetic Asset Exchange: The Block
Linear Finance, a decentralized finance (DeFi) protocol based in Hong Kong, has raised $1.8 million to build and launch synthetic asset exchange, the block reported. The financing round was led by NGC Ventures, Alameda Research, Hashed, and CMS Holdings, among others. Soul Capital, Moonrock Capital, and PANONY also participated in the round.
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About the founder: I’m Camila Russo, author of The Infinite Machine, the first book on the history of Ethereum. I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.