The Uniswap fork that got all the attention during the past week, Sushiswap, is moving forward with the migration of the liquidity locked in it.
According to DeFi monitoring resource Zippo, there’s about $830 million locked in the protocol that will be migrated from Uniswap to Sushiswap. Spearheading the operation is the CEO of FTX.
Liquidity Migrating Away from Uniswap
Sushiswap is a fork of Uniswap with a twist – it adds a governance token, essentially turning it into a community-owned automated market maker.
The last few days saw massive challenges in front of the project as its lead developer going by the anonymous Twitter handle Chef Nomi, market dumped the entire developers’ fund, crashing the price upwards of 50%.
Condemned by the community as an ‘exit scammer,’ he transferred the admin control to the CEO of FTX – Sam Bankman-Fried.
One of the first things he did was confirm an overall plan for the project and transfer control to a multisig wallet controlled by a group of people, to ensure decentralization and further security. The owners of this multi-sig wallet were voted by the community and some of them include Sam Bankman-Fried himself, Larry Cermak, Adam Cochran, and so forth.
Now, the protocol is migrating the liquidity locked in it away from Uniswap. Adam Cochran confirmed that the first Sushiswap pool migration (CRV) is already completed.
— Adam Cochran (@AdamScochran) September 9, 2020
How Does it Work?
In order to facilitate liquidity providers (LPs), Sushiswap allowed them to stake existing Uniswap liquidity tokens into the protocol. This way, LPs could stake their tokens into Uniswap, receive the UNI-V2 liquidity tokens and deploy them into Sushiswap for huge APY.
The second phase of the project, however, sees this liquidity migrated away from Uniswap and put directly into Sushiswap.
According to an official blog post by Boring Crypto and as confirmed by FTX CEO, the migration contracts have been thoroughly audited and are free of any critical errors.
Further Incentives Post Migration
Sam Bankman-Fried will give out 1 million SUSHI tokens to people who continue to provide liquidity after the migration.
The plan is to distribute these tokens equally based on the overall USD value of the liquidity they stake.
In addition, there’s also a community proposal to use an additional 1 million SUSHI from the development fund and increase the rewards to 2 million SUSHI in total.
After the entire thing is complete, the liquidity will stay on SushiSwap and users will be able to start adding trading pairs.