SUSHI, a mouth-watering DeFi Story

Satori Research
3 min readSep 10, 2020

Market Recap

Cryptocurrency investors took a hit this week as $50B vanished from the total market cap. Bitcoin moved in lock-step with the U.S. stock market, falling from $12,000 to below $10,000 and rebounding to $10,300, with the liquidation of over $2B of long contracts. Ethereum initiatlly went over $480 (+16%), reaching a record-high since 2018. However, it subsequently dived below $320 and ended the week down 13.6%. Other major altcoins followed a similar trend but in greater magnitude. Most recorded double-digit losses, such as XRP (-14.86%) and BCH (-17%). Many high-flying DeFi tokens were also down 20% or more. TVL in DeFi contracts dropped from $10B at peak to $8B. ETH network congestion eased as gas fees lowered to 200 Gwei level.

Figure 1: ETH Average Gas Price Chart

After advancing for four straight weeks, the U.S. stock market encountered a setback. It traded strong in the beginning of the week as heavyweight tech stocks, including Apple, Alphabet, and Amazon surged. Wall Street had the best August performance since the 1980s, with S&P 500 and Nasdaq reaching new record highs. However, sentiment turned sour on Thursday. S&P 500 and Nasdaq ended the week 2.3% and 3.3% lower. Following the overnight sell-off in the U.S, both Mainland Chinese and Hong Kong markets crashed, with the latter clocking its worst week in 3 months. Shanghai Composite Index and Hang Sang Index were down 0.87% and 1.25% respectively on Friday.

Sep 07, 2020, Top 5 Crypto KPI

What is Happening?

This week, a decentralized exchange topped a major centralized exchange in trading volume for the first time ever. On 30-Aug, Uniswap’s trading volume exceeded Coinbase Pro, the largest U.S.-based centralized exchange, by more than 20%. Uniswap’s 24h trading volume went above $1 billion in the following day, increasing more than ten times over the past month and doubling Coinbase’s number. Apart from investors’ increasing interest in DeFi, the surge was also driven by the launch of a new DeFi platform, SushiSwap, a Uniswap-like decentralized exchange created by an anonymous developer using the alias of “Chef Nomi”. The platform quickly gained popularity and locked $1.3B worth of fund, accounting for around 75% of the total fund on Uniswap 5 days after the launch. The SUSHI-ETH pool also became the most traded pool on Uniswap, representing around 20% of the total trading volume.

After getting listed on top centralized platforms, SUSHI token surged severalfold to over $10. However, the story took a dark turn. Over the weekend, Chef Nomi withdrew over 20,000 ETH and 2.5M SUSHI from Uniswap. He subsequently sold his 2.5M SUSHI holdings for ETH. The move was soon found out by the community since all transactions are shown on-chain. SUSHI then plunged 77% to around $1 as the fear of exit scam spread among investors. Nomi explained that he intended to focus more on the developer role, but the community was not convinced. Both FTX CEO SBF and YFI developer Andre Cronje criticized the move for jeopardizing the community. SBF offered to “take over” the SUSHI protocol and promised to return it back to the community. The community seemed to like the “New Master Chef”: SUSHI has rebounded by over 100% already.


Despite the dramatic twist, the story of SUSHI showcases the decentralization ethos: the community has the power to determine a platform’s future. Insider trading can barely happen because every transaction is shown publicly. Although many people call DeFi a Ponzi scheme, the technology and idea behind are revolutionary. Thanks to its active and responsible community, SUSHI might get back on the right track, but not all DeFi protocols have such a strong community. We would still advise our investors to DYOR.

Good Luck!