SushiSwap investors were handed a raw deal over the weekend after the pseudonymous founder of the $1.27 billion, 1.5-week-old decentralized finance (DeFi) protocol cashed out.

A fork of DeFi darling Uniswap, SushiSwap is the brainchild of a pseudonymous founder, Chef Nomi, who took the former project an extra yard by adding rewards for providing liquidity to the exchange through a liquidity provider token (LP), called sushi (SUSHI), that earns a portion of the AMM’s revenue.

In essence, AMM’s provide the infrastructure to match lightly traded tokens with liquidity. A variant of other decentralized exchange (DEX) experiments, Uniswap has grown to be the largest AMM with volumes nearing those of centralized exchanges such as Coinbase Pro.

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The episode underscores the complexity, creativity and unpredictability of the white-hot DeFi space, where more than $8 billion worth of cryptocurrency is currently locked up

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SushiSwap, the automated market maker aiming to unseat market leader Uniswap, has moved up its launch by five days.

Because of SushiSwap, total value in assets locked on Uniswap have gone up by just under $1.5 billion since the SushiSwap contract went into effect at block 10750000 on Aug. 28, according to DeFi Pulse, making Uniswap the largest holder of Ethereum assets in DeFi right now. 

Both Uniswap and Sushiswap are designed to always have a price at which they will swap any two tokens they have in liquidity pools.

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One app is able to drive liquidity into another because of SushiSwap’s liquidity mining scheme. SushiSwap promises to reward those who help it compete on liquidity with both a fee on trades and fresh governance tokens, which will also earn a portion of trading fees.

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