Huobi Research: At this stage, Sushiswap is very similar to the incentive layer of Uniswap

Todd Ma, a senior researcher at Huobi Research, said that Product of Sushiswap is not yet finished at this stage. It provides incentives to the liquidity providers of the major trading pairs on Uniswap. The incentive method is to provide high APY Farm rewards by locking the LP Token of the TOP crypto trading pair. In the short term, Sushi has greatly improved Uniswap’s liquidity. Since the launch of Sushi, the overall liquidity collateral on Uniswap has soared by 400%, especially mainstream assets such as ETH. As of 15:30 on the Sep.1, the transaction slippage of 200ETH was only 0.1%, which surpasses many middle-level CEX. However, the current Sushi tokenomics model may have some flaws that must be paid attention to. Its model support may be a little bit weak. At present, it mainly relies on the voting needs of projects that need to open a new pool. However, the purpose of opening a new pool is only to allow specific transaction pairs to obtain additional Sushi rewards, which is difficult to form a closed loop. If the current only LP fee reward of 0.05% value cannot make it form a closed loop, it may influences its incentive effect in the long run. But all in all, at this stage, Sushiwap is very much like the incentive layer of Uniswap.

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Huobi Research

Huobi Research

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Blockchain industry top think tank, affiliated to Huobi Group.