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