Jack Kubinec

DeFi depends on liquidity providers (LPs), but LPs can face an uphill battle in generating yield. Steer Protocol announced on Thursday that it is integrating its so-called Smart Pools on Sushi to try and make liquidity provision more attractive.



Steer’s Smart Pools take some data off-chain and automate aspects of liquidity management to increase efficiency for LPs. The Smart Pool integration comes as Sushi weighs an overhaul of its tokenomics and its native SUSHI token gets swept up in a market rally.



LPs put capital in pools that automated market makers (AMMs) like Sushi use to create order depth for DeFi assets. Providing capital as an LP <a href="https://blockworks.co/news/bell-curve-lvr-defi-liquidity-providers-unfair">can be inefficient because of loss-versus-rebalancing (LVR)</a> where an LP essentially faces arbitrage from AMM prices lagging behind centralized venues.



Read more: <a href="https://blockworks.co/news/bitcoin-ether-altcoins-etf">Bitcoin may be riding the ETF wave, but altcoins are where the rally really is&nbsp;</a>



Steer is an active liquidity management platform (ALM) that <a href="https://steer.finance/steer-protocol-and-sushi-collaborate-to-optimize-concentrated-liquidity/">focuses</a> on concentrated liquidity. LPs provide the platform with capital for a certain price range to increase their chances of the funds being used for a trade and earning fees.&nbsp;



The ALM moves some data off-chain to deal with LVR.



“From the arbitrage perspective, we can place liquidity, which looks like books that are on — let&#8217;s say a centralized exchange — which allows us to capture that price movement before it actually might happen on-chain,” Derek Barrera, the founder of Steer, said. 



Since launching over the summer, Steer has become the ninth-largest liquidity management protocol by total value locked (TVL), <a href="https://defillama.com/protocols/liquidity%20manager">according to</a> DeFiLlama.



Sushi’s Steer integration comes soon after the protocol’s “Head Chef” Jared Grey <a href="https://t.co/KWsPQKKhoV">proposed</a> changes to Sushi’s tokenomics. He indicated that these are meant to incentivize LPs to lock their liquidity into the DEX for longer periods of time.&nbsp;



Under Sushi’s current tokenomics, an average of over $100 million has been paid out in emissions to LPs for every $300 million in total value locked (TVL) created, the proposal <a href="https://docs.google.com/document/d/1UYr_BxBp8AfappwF-1vGExJWIRNkEDRjCuYcEkOWQUA/edit">said</a>.&nbsp;



The price of Sushi (<a href="https://blockworks.co/price/sushi">SUSHI</a>) jumped from around $0.55 in mid-October to $1.26 in early November, per Blockworks Research, and currently trades at $0.96 at the time of publication.



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Sushi’s ‘Smart Pools’ hope to boost LP efficiency

Ben Strack

<div id="highlights-block_624cbd01af609" class="highlights">
 <ul>
 <li>Avalanche and Polkadot join BTC, ETH and six other tokens in the digital currency asset manager’s $480 million Digital Large Cap Fund</li>
 <li>Grayscale had added 25 assets to its list of investments under consideration in January</li>
 </ul>
 
</div>



Grayscale Investments is adding three cryptoassets across its three diversified funds and removing two others from the products as part of a quarterly rebalance.&nbsp;



The asset manager’s Digital Large Cap Fund has bought Avalanche (AVAX) and Polkadot (DOT), the firm told Blockworks. No tokens were removed from the fund.



The fund, which launched in 2018 and has $480 million assets under management, enables investors to gain exposure to the upper 70% of the digital currency market.



AVAX and DOT each have market capitalizations above $24 billion, according to data compiled by Blockworks — ranking 10th and 11th, respectively.&nbsp;



The two cryptoassets join bitcoin (BTC), ether (ETH), solana (SOL), cardano (ADA), uniswap (UNI), chainlink (LINK), litecoin (LTC) and bitcoin cash (BCH) in the fund. Combined, AVAX and DOT’s allocation in the fund is about 3.3%.



Grayscale has also added Cosmos (ATOM) to its Smart Contract Platform Ex-Ethereum Fund. No assets were removed as a result of the rebalancing.&nbsp;



ATOM has a market cap of roughly $8.6 billion, which is the 23rd highest among crypto tokens, ahead of LINK and behind LTC. 



The investment vehicle, which offers investors the chance to bet on Ethereum’s largest competitors, <a href="https://cms.blockworks.co/grayscales-latest-fund-focuses-on-smart-contract-platforms/" target="_blank" rel="noreferrer noopener">launched last month</a>. The index-tracking fund’s original holdings were ADA, SOL, AVAX, DOT, Polygon (MATIC), Algorand (ALGO) and Stellar Lumens (XLM). ATOM now makes up roughly 5% of the Grayscale DeFi Fund.



Though no tokens were added to Grayscale’s DeFi Fund, two were removed.&nbsp;



Both SushiSwap (SUSHI) and Synthetix (SNX) were omitted from the fund after failing to meet the market capitalization requirements, according to a Grayscale spokesperson.&nbsp;



SNX’s market cap is slightly less than $1.4 billion, according to data compiled by Blockworks. SUSHI’s market cap is roughly $800 million.



The DeFi fund launched last July and has about $8 million in assets. Cryptoassets remaining in the fund are UNI, Aave (AAVE), Curve (CRV), MakerDAO (MKR), Amp (AMP), Yearn Finance (YFI) and Compound (COMP).



Grayscale added 25 assets to <a href="https://cms.blockworks.co/grayscale-considers-25-new-digital-assets/" target="_blank" rel="noreferrer noopener">a running list of investments</a> it is considering making available to investors in January. Though AVAX and DOT were previously on the list, ATOM was added at that time.



The firm continues to update the list as the digital asset ecosystem expands and it reviews more assets, Grayscale said at the time.



“The process of creating an investment product similar to the ones we already offer is a complex, multifaceted process,” the company said in a statement. “It requires significant review and consideration and is subject to our internal controls, custody arrangements, and regulatory considerations, among other things.”



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Grayscale Adjusts Cryptoassets Exposure in Diversified Funds

Macauley Peterson

<div id="highlights-block_6234c65660322" class="highlights">
 <ul>
 <li>Sushi has fallen out of the top 10 decentralized exchanges by volume, according to Coingecko</li>
 <li>Aave’s total value locked peaked at nearly $20 billion in October 2021</li>
 </ul>
 
</div>



As DeFi projects have lost their luster and trading volumes have tanked, two new blue-chip protocols are trying to once again catch the eye of big-money investors.&nbsp;



A new product from the DAO team at Sushi has launched its beta on the Polygon proof-of-stake blockchain. A new set of money Legos for the DeFi space, the project, dubbed Trident, is being billed as a “production framework for building and deploying AMMs.”



Aave V3, meanwhile, has launched on six different chains, enabling cross-chain transactions, among a host of new features.



The two protocols, well-regarded DeFi (decentralized finance) projects that originated from 2020’s “DeFi summer,” have a combined total value locked of around $16 billion — even though their DAO (decentralized autonomous organization) governance tokens have tanked.



SUSHI is down around 88% from its <a href="https://www.coingecko.com/en/coins/sushi" target="_blank" rel="noreferrer noopener">March 2021 peak</a> of $23.05, while AAVE has fallen 76% since a <a href="https://www.coingecko.com/en/coins/aave" target="_blank" rel="noreferrer noopener">May 2021 peak</a> of $631.26, per Coingecko.



As the hype around so-called <a href="https://cms.blockworks.co/the-investors-guide-to-defi-2-0/" target="_blank" rel="noreferrer noopener">DeFi 2.0</a> upstart projects such as OlympusDAO and Wonderland has faded in recent months, the product launches may signal a shift back to industry stalwarts.



<h3 class="wp-block-heading">A refreshed Sushi</h3>



The community of developers and Sushi adherents have been through a rough patch since a management shakeup last year, which saw <a href="https://cms.blockworks.co/sushiswap-swaps-out-co-founder-0xmaki/" target="_blank" rel="noreferrer noopener">Sushi’s co-founder depart</a> in September and <a href="https://cms.blockworks.co/update-cto-resigns-as-sushiswap-struggles-arca-submits-restructuring-proposal/" target="_blank" rel="noreferrer noopener">its chief technology officer resign</a> in December.



That inevitably led to delays in the progress toward Trident, but the DAO team announced the beta version rollout in <a href="https://sushichef.medium.com/launching-trident-phase-1-4e483fad0ae4" target="_blank" rel="noreferrer noopener">the group&#8217;s blog</a> Wednesday.



This system can be used for “creating any [automated market-maker] anyone would ever need,” according to the blog. Unlike the prior version, Trident allows anyone to create a liquidity pool, much like <a href="https://cms.blockworks.co/?s=Uniswap" target="_blank" rel="noreferrer noopener">Uniswap</a> does. Unlike Uniswap, the pools can have an imbalance of tokens rather than a 50-50 split — a feature of another rival decentralized exchange, <a href="https://balancer.fi/" target="_blank" rel="noreferrer noopener">Balancer</a>.



The full feature set is expected to be made available following the completion of security audits, and Trident will also eventually be pushed out to other chains, such as Ethereum’s mainnet.



<h3 class="wp-block-heading">Aave adds more Ethereum-compatible chains</h3>



Aave <a href="https://twitter.com/AaveAave/status/1504137636105043971" target="_blank" rel="noreferrer noopener">unveiled</a> its third-generation app this week. Aave’s DAO community approved deployments on Polygon, plus Ethereum layer-2s Arbitrum, Optimism, and other layer-1 networks compatible with the Ethereum virtual machine — Fantom, Avalanche and Harmony. Deployment to Ethereum’s mainnet is still in the works.



Among the goals of V3 are “greater capital efficiencies, increased security, and cross-chain functionality,” according to <a href="https://aave.mirror.xyz/2TnHYHQRnNhSG56Y4CcssulFArSVqrFbmAdYfU7Kxp0" target="_blank" rel="noreferrer noopener">the announcement</a>.



​​“This is a huge milestone for one of the most popular liquidity protocols in DeFi and furthers our mission to bring DeFi to the next hundreds of millions of people,” Polygon co-founder Sandeep Nailwal said in a statement.



A standout is the “Portals” feature, which allows DAO-approved bridging protocols to facilitate cross-chain transactions, so that assets within Aave can readily flow between disparate blockchains without a DeFi user having to withdraw, bridge and redeposit assets in separate transactions.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">&#8220;The cross-chain portal will enable users to port their own liquidity from one network to another, at their discretion. It will allow each iteration of the protocol on the various networks to scale quite quickly with the depth of capitalization,&#8221; Nicolo Stewen, Aave&#8217;s Director of Strategy, told Blockworks.</blockquote>



The app’s “High Efficiency Mode” allows borrowers to obtain greater buying power when using similar assets, such as stablecoins, as collateral.



“Isolation Mode” addresses one of the culprits behind many <a href="https://cms.blockworks.co/flash-loan-exploit-whips-cream-finance-for-130-million/" target="_blank" rel="noreferrer noopener">high-value exploits</a> — most recently the <a href="https://twitter.com/shegenerates/status/1503852338917908488" target="_blank" rel="noreferrer noopener">$11 million loss</a> on Agave, an Aave fork on the Gnosis Ethereum sidechain — having to do with the listing of new collateral assets that prove to be unsafe. By walling off certain categories of assets, V3 limits risk.



On the security front, Aave&#8217;s V3 code has been <a href="https://github.com/aave/aave-v3-core/tree/master/audits" target="_blank" rel="noreferrer noopener">audited by multiple firms</a>, such as Sigma Prime, Trail of Bits, Open Zeppelin, ABDK and PeckShield, and has undergone verification by Certora.



Its open-source code is released under a business license similar to that of Uniswap V3.



As with the predominant V2, Aave V3 will integrate with popular DeFi apps and dashboards, including 1Inch, Debank, DeFisaver, Instadapp, Paraswap, Zapper and Zerion.



“Incredibly excited for what this means for the future of the Aave Protocol and the Aave Community as a whole, both in terms of its scalability and its flexibility as the space continues to evolve,” Stewen <a href="https://twitter.com/coconidodev/status/1504173409743343620" target="_blank" rel="noreferrer noopener">said</a>.



This story was updated on March 21 at 3:15 a.m. ET with comments from Nicolo Stewen



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Can New Launches from Aave and Sushi Usher in DeFi’s Comeback?

Sam Reynolds

<div id="highlights-block_61b1f58f54475" class="highlights">
 <ul>
 <li>The market doesn’t seem to think Joseph Delong’s resignation will have a material impact on SushiSwap’s fortunes</li>
 <li>Open interest remains consistent, suggesting that traders are comfortable with Sushi’s current price</li>
 </ul>
 
</div>



Hope of a price recovery among Sushi governance token holders after the protocol’s CTO, Joseph Delong, resigned was shattered early Thursday as SUSHI had gained 20% on word of his resignation but subsequently dropped back down to Earth. 



The token is up about 3% in the last 24 hours, according to <a href="https://www.coingecko.com/en/coins/sushi" target="_blank" rel="noreferrer noopener">CoinGecko</a>, and started the US trading day at around $6. Initially, when Delong <a href="https://twitter.com/josephdelong/status/1468689021530427395?s=20" target="_blank" rel="noreferrer noopener">tweeted</a> his resignation, the token spiked to $6.90 — up approximately 20%.



<figure class="wp-block-image size-full"><img loading="lazy" decoding="async" width="1015" height="350" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/2021-12-09-sushi.png" alt="" class="wp-image-12374" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/2021-12-09-sushi.png?w=1015 1015w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/2021-12-09-sushi.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/2021-12-09-sushi.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/2021-12-09-sushi.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/2021-12-09-sushi.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/2021-12-09-sushi.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/2021-12-09-sushi.png?w=80 80w" sizes="auto, (max-width: 1015px) 100vw, 1015px" /><figcaption>Delong sent a message embedded in <a href="https://etherscan.io/tx/0xa988c166bcbf94726180acd7bfa313319dcf85d9a5ad980af6b5db809f0ce338" target="_blank" rel="noreferrer noopener">an Ethereum transaction</a> using his private key which must be read as UTF-8 data to decode</figcaption></figure>



SushiSwap’s token is down about 50% in the past month.



Open interest data is flat, consolidating around the $2.19 million mark, showing that investors are satisfied at the token’s current pricing.&nbsp;&nbsp;



At the core of the token’s decline is the market’s lack of confidence in the DEX’s future, amidst infighting <a href="https://cms.blockworks.co/update-cto-resigns-as-sushiswap-struggles-arca-submits-restructuring-proposal/" target="_blank" rel="noreferrer noopener">between Delong and a clique of executives</a> and the rest of the DAO community.&nbsp;



“Sushi is currently demonstrating the perils of DAO governance for all to see, with token holders now turning on the core team in a vicious public battle,” Will Harborne, CEO of DEX DeversiFi told Blockworks via Telegram.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“With Delong having been leading the development of Sushi’s next generation AMM Trident, hoped by many to be the key to challenging Uniswap V3, this will leave the community governed project even more leaderless,&#8221; he said.</blockquote>



While there have been <a href="https://cms.blockworks.co/update-cto-resigns-as-sushiswap-struggles-arca-submits-restructuring-proposal/">proposa</a><a href="https://cms.blockworks.co/update-cto-resigns-as-sushiswap-struggles-arca-submits-restructuring-proposal/" target="_blank" rel="noreferrer noopener">l</a><a href="https://cms.blockworks.co/update-cto-resigns-as-sushiswap-struggles-arca-submits-restructuring-proposal/">s to reform</a> the DEX’s governance by investors like Arca, which would make it more in line with a hierarchical corporation, no action has yet been taken to seriously consider its implementation. 



“DAOs aren&#8217;t a silver bullet solution and need leadership and good governance just like any other organization. When there is misalignment between leadership and community, the entire DAO will suffer,” Luuk Weber, strategic lead at PrimeDAO told Blockworks in an interview.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“Single token governance, as used in Sushi, allows for wide governance participation, but may also cause tension between token holders and leaders,&#8221; said Weber.</blockquote>



In the case of Sushi, 64% of all governance tokens are held by whales, according to <a href="https://app.intotheblock.com/coin/SUSHI/deep-dive?group=ownership&amp;chart=all" target="_blank" rel="noreferrer noopener">IntoTheBlock</a>, while 27% of all governance tokens are held by one sole investor.



“This causes misalignment between leadership and the community which ultimately ends with both sides losing faith in each other; driving down the value of the governance token as it loses its power to coordinate contributors,” added Weber.  



Sushi is down from an all-time high of $23, which it hit in mid-March.



“We’ve seen Sushi recover from worse crises in the past and so much hope remains, but it will require the DAO to find strong new leadership and ideas from within the community fast to avoid a death spiral,&#8221; concluded Harborne.




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Sushi Opens Thursday Up 3% After CTO Resignation

Jacquelyn Melinek

<div id="highlights-block_61b0a2856de24" class="highlights">
 <ul>
 <li>SushiSwap is plagued with ‘corporate’ infighting as a power struggle ensues between its CTO and other stakeholders over differences of opinion on if an update to the platform is ready to ship</li>
 <li>Arca proposes a restructuring of the SushiSwap DAO to include organizational level hierarchy, product teams, and multi-sig so that the DAO’s organizational structure and governance would reflect a corporation with similar revenue</li>
 </ul>
 
</div>



The Chief Technology Officer of SushiSwap Joseph Delong has resigned, according to a <a href="https://twitter.com/josephdelong/status/1468689021530427395?s=12" target="_blank" rel="noreferrer noopener">tweet</a> he wrote on Wednesday.&nbsp;



“In the interest of the Sushi Community I am resigning as CTO effective immediately,” Delong wrote. “I very much enjoyed the things that we built together and will look back positively on this moment,” he added.&nbsp;



Blockworks reported earlier today that SushiSwap, one of the largest decentralized exchanges, was dealing with another round of ‘corporate’ infighting between Delong, and broader community, digital asset management firm Arca — an investor in SushiSwap — which proposed a comprehensive reform of the DAO’s governance structure to match that of a corporation.&nbsp;



“I wish Sushi the best and am saddened that Sushi is so imperiled within and without. The chaos that is occurring now is unlikely to result in a resolution that will leave the DAO as much more of a shadow than it once was without a radical structural transformation,” Delong said in a follow-up <a href="https://twitter.com/josephdelong/status/1468689023761801217">tweet</a>.&nbsp;



<div class="wp-block-image"><figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="303" height="315" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Joseph.jpeg" alt="" class="wp-image-12343" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Joseph.jpeg?w=303 303w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Joseph.jpeg?w=289 289w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Joseph.jpeg?w=247 247w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Joseph.jpeg?w=251 251w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Joseph.jpeg?w=211 211w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/Joseph.jpeg?w=77 77w" sizes="auto, (max-width: 303px) 100vw, 303px" /><figcaption>Joseph Delong; Source: Sushi via Medium</figcaption></figure></div>



Delong recommended the installation of an executive-level group outside of the DAO and said in another <a href="https://twitter.com/josephdelong/status/1468689025607376899?s=20" target="_blank" rel="noreferrer noopener">tweet</a> that it should be, “wary of any self proclaimed leaders arising from the current core team.”&nbsp;



<h3 class="wp-block-heading">The Backstory: Why SushiSwap Needs Reform&nbsp;</h3>



Despite SushiSwap pushing out <a href="https://www.coingecko.com/en/exchanges/sushiswap" target="_blank" rel="noreferrer noopener">nearly $350 million in 24-hour volume</a>, the DAO behind one of the biggest DEXs has been plagued with infighting since its inception. In September 2020, pseudonymous SushiSwap founder Chef Nomi was axed after selling off $14 million of ether earmarked for a development fund. An individual named 0xMaki was appointed the project lead, backed by investors like FTX’s Sam Bankman-Fried. 0xMaki has since <a href="https://cms.blockworks.co/sushiswap-swaps-out-co-founder-0xmaki/" target="_blank" rel="noreferrer noopener">stepped down</a> from daily leadership and transitioned to an advisory capacity&nbsp; — though allegations swirl that he was forced from the role by a clique of developers and other stakeholders.&nbsp;



According to a report from <a href="https://rekt.news/sushiswap-scandal/" target="_blank" rel="noreferrer noopener">Rekt</a>, CTO Delong and core team members Omakase, 0xKeno, and Rachel Chu, were said to have initiated an internal vote to push 0xMaki out of a daily leadership position and into a passive advisory role. But in turn this clique, known as JOKR, faces derogatory allegations of its own: $9,000 dinners at NFTNYC, $5,000 tickets to mixers, and siphoning off funds raised from the BitDAO (an affiliated project) token sale.&nbsp;



For his part, Delong took to Twitter to call the whole affair “absurd defamation” and threatened to leave the project if his team isn’t granted more autonomy and an increase in compensation.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">There has been a lot of drama within Sushi and overt manipulation coming from outside Sushi. As a leader I don&#39;t want to discuss these topics as I think our work products speak for themselves, but this absurd defamation has risen to a level I can&#39;t tolerate. 𝓪 𝓽𝓱𝓻𝓮𝓪𝓭 💕&mdash; Joseph Delong (@josephdelong) <a href="https://twitter.com/josephdelong/status/1467498477542379522?ref_src=twsrc%5Etfw">December 5, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



“I am going to ship Trident [a new iteration of the DEX software], and if you do not give us the autonomy to continue operations, the capability to form leadership, and increase compensation across the board I will leave,” he tweeted.



If the community behind the DEX didn’t back Delong and his team, he said he would “peacefully transfer all the accounts and go and build something equally as successful, and you can find someone else to bully.”



Sushi’s governance token, SUSHI, has been on a steady slide since September 16, when it traded as high as $16. Now it’s under $6.




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<h3 class="wp-block-heading">Arca’s Proposal&nbsp;</h3>



For any investor or stakeholder of a company that generates as much revenue as SushiSwap, such infighting would be concerning and would likely dissuade any further investment.&nbsp;



With that in mind, Arca, who’s Chief Investment Officer, Jeff Dorman once called Sushi one of <a href="https://twitter.com/jdorman81/status/1393243216875429895?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1393243218590855173%7Ctwgr%5E%7Ctwcon%5Es2_&amp;ref_url=https%3A%2F%2Fwww.cryptoglobe.com%2Flatest%2F2021%2F05%2Fsushiswaps-sushi-may-be-the-most-undervalued-token-in-the-space-says-arcas-cio%2F" target="_blank" rel="noreferrer noopener">the most undervalued</a> tokens currently on the market, <a href="https://forum.sushi.com/t/sushi-dao-restructure-proposal/6282" target="_blank" rel="noreferrer noopener">put forward a proposal</a> to reform the DAO’s structure to make it more inline with that of an equally sized corporation.&nbsp;



“This growth has been phenomenal but has led to natural growing pains that need to be addressed. In order to scale, each product line must be properly resourced to fully execute the community vision,” Arca’s Alex Woodard wrote.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“This proposal aims to adequately structure Sushi Ops DAO, and future DAOs developing Sushi, with a formalized entity, processes, structure, and community leadership in order to capture and capitalize on future growth.”</blockquote>



Arca proposes that the operational structure of SushiSwap’s DAO become more hierarchical with product teams reporting to a product manager (similar to any sort of software company), multi-sig on key decisions involving hiring, firing, and fund management — like how any corporation would need two executives to sign off on key decisions — as well as the incorporation of a legal entity to employ developers.&nbsp;



Arca did not respond to a request for comment from Blockworks.&nbsp;



<h3 class="wp-block-heading">Corporate Governance for the DeFi Era</h3>



For investors, corporate governance proposals are nothing new and have been around since the advent of venture capital itself.&nbsp;



But what’s different in this era is that some of the hottest investment opportunities aren’t formally incorporated and lack a traditional executive-manager structure. Instead, influence on a project’s direction is all about who owns the most tokens and thus controls the votes.&nbsp;



A16Z, an active investor in the space, has released a <a href="https://a16z.com/2021/08/26/open-sourcing-our-token-delegate-program/" target="_blank" rel="noreferrer noopener">number</a> of <a href="https://a16z.com/2021/02/05/on-crypto-governance/" target="_blank" rel="noreferrer noopener">position papers</a> that outline is position on DeFi project governance. Part of a16z’s position is that the investor sometimes doesn’t know what’s best for the project, and to help it scale there’s a delegation of tokens to partner organizations.&nbsp;



“Delegates must be empowered to vote independently from the token holder. This is an essential property for any well-designed delegation program. At a minimum, this means that the token holder should not attempt to influence or dictate its delegates’ participation in any way, either explicitly or implicitly,” the company wrote.



All of this comes as the total value locked in DeFi protocols stays well above the $100 billion mark and serious institutional money eyes its way in.



Both Arca’s proposal for SushiSwap’s organizational reform and a16z’s broader view on DeFi governance aren’t without controversy. In the thread that followed the proposal from Arca, there are comments that call the plan to formally incorporate part of SushiSwap a “trojan horse”; Harvard Law’s student Blockchain association, one of a16z’s delegates, is also a <a href="https://www.theblockcrypto.com/post/111185/harvard-law-blockchain-initiative-uniswap-dao" target="_blank" rel="noreferrer noopener">recipient of treasury grants</a> from Uniswap.&nbsp;



If anything, this shows just how fertile the whole space is and will take some time to develop, just as best practices for startup governance emerged alongside the development of Silicon Valley.



This story was updated on Dec. 8, 2021, at 4:57 pm ET.



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<hr class="wp-block-separator">

Update: CTO Resigns as SushiSwap Struggles, Arca Submits Restructuring Proposal

Morgan Chittum

<div id="highlights-block_60c9fc7f1690b" class="highlights">
 <ul>
 <li>Total crypto market capitalization remains above $2 trillion</li>
 <li>Amid an insider trading scandal, OpenSea&#8217;s former product head Nate Chastain, updated his Twitter bio to say “Past: @opensea” on Thursday</li>
 </ul>
 
</div>



DeFi token $SUSHI fell Friday on a string of <a href="https://cms.blockworks.co/sushiswap-swaps-out-co-founder-0xmaki/" target="_blank" rel="noreferrer noopener">news</a>, shedding 14% in the past 24 hours. 



SushiSwap, a decentralized automated market maker which created the token, had a roughly $3 million breach on its token launchpad platform. In addition, one of SushiSwap&#8217;s lead developers reportedly relinquished his leadership role to another. $SUSHI is trading at $13.28, as of press time. This is 43.2% lower than the token&#8217;s all-time high (ATH), according to <a href="https://www.coingecko.com/en/coins/sushi" target="_blank" rel="noreferrer noopener">CoinGecko</a>. However, in the past week the blue chip token is up 20.7%.



$AVAX, the native token behind Avalanche, continued to rise following the company&#8217;s funding <a href="https://cms.blockworks.co/avalanche-closes-230m-token-sale-backed-by-three-arrows-capital-polychain/" target="_blank" rel="noreferrer noopener">news</a> on Thursday. $AVAX hiked 2.46% to $64.78, as of press time. The altcoin has made gains of 114.73% in the past month and is 4.91% away from its ATH. The token is dubbed the twelfth largest digital asset with a market cap of $14.23 billion, according to<a href="https://messari.io/asset/avalanche" target="_blank" rel="noreferrer noopener"> Messari.</a> 



Major cryptos like bitcoin and ethereum were mixed. BTC was little changed up 0.3% and ETH shed roughly 2.5%, respectively. Despite its Friday decline, ether is still up 6.07% in the past week. Total crypto market capitalization remains above $2 trillion. 



<h3 class="wp-block-heading">DeFi</h3>



<ul class="wp-block-list"><li>Terra ($LUNA) is trading at $35.07, declining 7.1% and trading volume at $1,065,496,649 in 24 hours.</li><li>Uniswap ($UNI) is trading at $26.38, advancing 0.8% with a total value locked at $4,897,757,636 in 24 hours at 4:00 pm ET.</li><li>DeFi:ETH is 32.1% at 4:00 pm ET. </li></ul>



<h3 class="wp-block-heading">Crypto</h3>



<ul class="wp-block-list" id="block-1209f037-00c3-4876-ad37-a29ab610c717"><li>Bitcoin is trading around&nbsp;$47,301.79, up 0.32% in 24 hours at 4:00 pm ET.</li><li>Ether is trading around $3,406.51, down -2.62% in 24 hours at 4:00 pm ET.</li><li>ETH:BTC is at 0.071, rising 0.06% at 4:00 pm ET.</li></ul>



<div class="wp-block-image"><figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="622" height="504" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/B0AC5D15-8891-44D1-BB0A-361DFF10F283.jpeg" alt="" class="wp-image-8221" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/B0AC5D15-8891-44D1-BB0A-361DFF10F283.jpeg?w=622 622w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/B0AC5D15-8891-44D1-BB0A-361DFF10F283.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/B0AC5D15-8891-44D1-BB0A-361DFF10F283.jpeg?w=317 317w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/B0AC5D15-8891-44D1-BB0A-361DFF10F283.jpeg?w=322 322w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/B0AC5D15-8891-44D1-BB0A-361DFF10F283.jpeg?w=270 270w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/B0AC5D15-8891-44D1-BB0A-361DFF10F283.jpeg?w=80 80w" sizes="auto, (max-width: 622px) 100vw, 622px" /><figcaption> $SUSHI trading over the past day. Source:CoinGecko</figcaption></figure></div>



<h3 class="wp-block-heading">Equities</h3>



<ul class="wp-block-list"><li>The Dow was down -0.48% to 34,584.</li><li>S&amp;P 500 fell -0.91% to 4,432.</li><li>Nasdaq declined -0.91% to 15,043.</li></ul>



<h3 class="wp-block-heading">Commodities</h3>



<ul class="wp-block-list" id="block-d64d70c9-7052-4f1a-8167-3d370fe08354"><li>Brent crude was down to $75.33 per barrel, declining -0.45%.</li><li>Gold declined -0.23% to $1,752.6.</li></ul>



<h3 class="wp-block-heading">Currencies</h3>



<ul class="wp-block-list"><li>The US dollar strengthened 0.33%, according to the Bloomberg Dollar Spot Index.</li></ul>



<h3 class="wp-block-heading">Fixed Income</h3>



<ul class="wp-block-list"><li>US 10-year treasury yields 1.363% as of 4:00 pm ET.</li></ul>



<h3 class="wp-block-heading">In other news&#8230;</h3>



OpenSea, one of the largest NFT marketplaces, is at the center of an alleged insider trading scandal. Nate Chastain, former product head of OpenSea, updated his Twitter bio to say “Past: @opensea” on Thursday, Blockworks <a href="https://cms.blockworks.co/openseas-nate-chastain-calls-it-quits-after-insider-trading-allegations/" target="_blank" rel="noreferrer noopener">reported.</a> Devin Finzer, co-founder of OpenSea, <a href="https://opensea.io/blog/announcements/employee-information-use-at-opensea/" target="_blank" rel="noreferrer noopener">admitted</a> in a blog post that someone at the company was involved in insider trading, but didn’t explicitly name Chastain.



That&#8217;s it for today&#8217;s markets wrap. I&#8217;ll see you back here on Monday.



<hr class="wp-block-separator"/>



Are you a UK or EU reader that can&#8217;t get enough investor-focused content on digital assets?<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Join us</a>&nbsp;in London on November 15th and 16th for the Digital Asset Summit (DAS) London. Use code ARTICLE for £75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/das-london/" rel="noreferrer noopener">Buy it now</a>.



<hr class="wp-block-separator"/>

Bitcoin Hovers Below $50K as DeFi Token  $SUSHI Topples: Markets Wrap

Casey Wagner

<div id="highlights-block_6144a1b00ee14" class="highlights">
 <ul>
 <li>Pseudonymous lead dev will issue a statement Friday regarding his changing status</li>
 <li>The Sushi DEX has been deployed on more than twice as many blockchains as any other</li>
 </ul>
 
</div>



0xMaki, the pseudonymous co-founder and project lead of decentralized automated market maker (AMM) SushiSwap, is reportedly stepping down from his leadership role, though he may remain tied to the protocol though an advisory role.&nbsp;



The departing developer was expected to release a statement related to the matter on Friday, <a href="https://thedefiant.io/oxmaki-steps-down-sushiswap-advisory-role/" target="_blank" rel="noreferrer noopener">sources told The Defiant</a>, and <a href="https://twitter.com/0xMaki/status/1438913109964595207" target="_blank" rel="noreferrer noopener">subsequently confirmed</a> by 0xMaki on Twitter. That came in the form of a lengthy <a href="https://forum.sushi.com/t/transition-into-advisor/5533" target="_blank" rel="noreferrer noopener">post on the Sushi forums</a>, late Friday, in which he outlined his new role as an advisor.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">&#8220;I’ll be moving away from day-to-day operations into an advisory role to help foster the next generation of teams building on top of Sushi, supporting from the sideline, and helping without affiliation the broader DeFi ecosystem regardless of where they are deployed.&#8221;</blockquote>



0xMaki was elected as a multisig member — one of the lead decision makers in the community-run ecosystem — in September 2020. His &#8220;owner&#8221; rights were removed from the operations multisig wallet on Tuesday, September 14, <a href="https://etherscan.io/tx/0x10eb58b83b37cd3e18837c6d7a60200738229f03b977516e703daab1959601ca#eventlog" target="_blank" rel="noreferrer noopener">Ethereum transaction details</a> revealed. 



Operations was a five-member multisig where members are responsible for adding and removing protocols, approving transactions and any changes to smart contracts. 0xMaki was still listed as a member of the community&#8217;s Treasury multisig, which oversees some $154 million in assets — mostly the protocol&#8217;s native governance token $SUSHI — as of Friday.



In 0xMaki&#8217;s follow-up statement, he noted, &#8220;I’d like to remain on the treasury multisig but if this isn’t desired by the community [I&#8217;m] ready to step back there after a snapshot vote.&#8221; Snapshot refers to a governance tool that allows $SUSHI token holders to vote on actions without spending ether in the form of fees on Ethereum&#8217;s mainnet. 



<h3 class="wp-block-heading">Rise from controversial origins</h3>



0xMaki was instrumental in rescuing the project after its original lead developer, Chef Nomi, quit shortly after the protocol was launched. The project’s admin keys were transferred to FTX CEO Sam Bankman-Fried, before the current multisig solution (of which Bankman-Fried is also a member) was deployed.



SushiSwap began as a clone of Uniswap, and drained liquidity from the leading AMM by offering users incentives to migrate their assets in what is referred to as a “vampire attack”, at the end of what became known as “DeFi Summer.”



<div class="wp-block-image"><figure class="alignright size-full is-resized"><img loading="lazy" decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/kashi-color-flat_sm.jpg" alt="" class="wp-image-8204" width="166" height="181" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/kashi-color-flat_sm.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/kashi-color-flat_sm.jpg?w=275 275w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/kashi-color-flat_sm.jpg?w=236 236w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/kashi-color-flat_sm.jpg?w=239 239w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/kashi-color-flat_sm.jpg?w=201 201w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/kashi-color-flat_sm.jpg?w=73 73w" sizes="auto, (max-width: 166px) 100vw, 166px" /></figure></div>



Despite early tensions, Uniswap founder Hayden Adams <a href="https://twitter.com/haydenzadams/status/1438833605493596160?s=12" target="_blank" rel="noreferrer noopener">tweeted praise</a> in response to the news, calling him &#8220;an impressive community builder&#8221;. Under his leadership, the automated market maker expanded into <a href="https://sushi.com/" target="_blank" rel="noreferrer noopener">a diverse ecosystem</a> that encompasses a digital asset money-market protocol called Kashi, staking and yield farm products.



Sushiswap has also expanded to a dozen other blockchains, making it the most widely deployed decentralized exchange by a wide margin.&nbsp;



The intense pace of work on a leading DeFi project with <a href="https://defipulse.com/sushiswap" target="_blank" rel="noreferrer noopener">over $4 billion in total value locked</a>, has taken its toll on the developer, according to the statement.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">&#8220;On a personal level, I’ve put Sushi before my physical &amp; mental health, my relationships, my family, and my friends. I’ll be slowing down for the next month or two.&#8221;</blockquote>



Not cited in his statement was the topic of developer compensation, but he did <a href="https://twitter.com/0xMaki/status/1435025850932490240" target="_blank" rel="noreferrer noopener">recently reveal on Twitter</a> that core developers own less than 1% of the protocol, signaling that may have been a contributing factor.



An ecosystem <a href="https://medium.com/sushiswap-org/sushi-miso-the-perfect-combo-9883548706b1" target="_blank" rel="noreferrer noopener">addition in May</a>, MISO, which provides a way to launch new tokens, was exploited Thursday for 865 ETH (or about $3 million), in <a href="https://cryptobriefing.com/sushiswaps-miso-token-launchpad-suffers-3m-exploit/" target="_blank" rel="noreferrer noopener">a suspected inside job</a>, but the funds were subsequently returned in full on Friday.



Amid the multifaceted turmoil, $SUSHI is down about 19% in the last 24 hrs. At time of publication, $SUSHI was trading at $12.90, down significantly more than the tokens of rival DEXs Uniswap, Balancer and Bancor, which have seen declines of 3-6%.



Updated, Saturday, September 18, 9:00 (UTC) with 0xMaki&#8217;s statement.



<hr class="wp-block-separator"/>



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<hr class="wp-block-separator"/>

SushiSwap Swaps Out Co-founder 0xMaki

<div id="highlights-block_612e5dad3ee76" class="highlights">
 <ul>
 <li>Demand for lower transaction costs and higher throughput than what Ethereum networks provides has opened the door for alternative Layer-1 players </li>
 <li>VanEck’s head of digital assets research points to Solana as leader of about half a dozen Layer-1s that could someday rival Ethereum </li>
 </ul>
 
</div>



Competition within the Layer-1 space is heating up, as such protocols and their native tokens that look to rival Ethereum have seen sharp growth in recent weeks.



Although growth seen with the Layer-1 and Layer-2 sectors could ultimately benefit Ethereum, its dominance in the space is shrinking, according to a <a href="https://messari.io/article/q2-21-layer-1-review-a-peek-at-the-largest-ecosystems-by-tvl">July blog post</a> by crypto data provider Messari. Of the $110 billion dollars in total value locked, or TVL, Ethereum controls roughly 77%, down 20% from five months prior, Messari research analysts Roberto Talamas and Wilson Withiam wrote.



Matthew Sigel, head of digital assets research at fund manager VanEck, said the proliferation of competing Layer-1 smart contract platforms has come about amid a higher demand for transaction prices and throughput that are lower and faster than what the Ethereum network provides.&nbsp;



“The Layer-1s that can promise more transactions per second are starting to get more attention from investors,” he told Blockworks.



The market share of all smart contract platforms, as a percentage of total crypto market cap, has increased from 14% at the beginning of 2021 to more than 27%, Sigel noted <a href="https://www.vaneck.com/us/en/blogs/digital-assets/matthew-sigel-ethereum-competitors-and-the-race-to-innovate/?sfveclid=003A000000wiRgeIAE&amp;utm_source=veg&amp;utm_medium=email&amp;utm_campaign=US-Crypto-Decoded-2021-08-10&amp;mkt_tok=NDEwLVhPUi02NzMAAAF-0Gkton9bhVlH82lVo9QBmD3P7g7604cyFyHMhvRIiRDKyXo12NWEUsdTV-nl3TbwUAobXbc-fTrNr2CpId2CHVhuX48qTmDbkmO2-YkMkMB2">in a blog post</a> published earlier this month. Ethereum accounts for 80% of this smart contract category, which is down about 8% over that span.



<h3 class="wp-block-heading">A look at Ethereum’s competitors?</h3>



There are about half a dozen Layer-1 smart contract protocols with the track record, size and community engagement to perhaps someday rival Ethereum, Sigel argued.&nbsp;



He pointed specifically to <a href="https://solana.com/#" target="_blank" rel="noreferrer noopener">Solana</a>, which claims to be the fastest blockchain in the world. It has 400 millisecond block times and transaction prices below $0.01 for developers and users, according to its website.



“In the case of Solana, the idea that you could get 50,000 transactions per second, which would rival Nasdaq, opens up the potential to just securitize any number of existing assets, tokenize them and trade them in parallel using the Solana network,” Sigel explained. “&#8230;That is still a mind-blowing prospect that very few people have wrapped their heads around.”



Solana’s native token, SOL, reached a price of $121 Tuesday morning, an increase of 18% from a day ago and up 234% in the last 30 days, according to <a href="https://www.coingecko.com/en" target="_blank" rel="noreferrer noopener">CoinGecko</a> data.



“There’s just enough acceptance of the power of decentralization that people are willing to explore what it would be like to have a decentralized Nasdaq, and there just wasn’t the awareness and the infrastructure ready until now for that,” Sigel said.



Galaxy Digital CEO Mike Novogratz also highlighted Solana, as well as Terra’s LUNA token as Layer-1 protocols that are “booming,” during the company’s <a href="https://cms.blockworks.co/galaxy-shares-2q-loss-but-novogratz-bullish-on-defi-and-nfts/" target="_blank" rel="noreferrer noopener">second quarter earnings call</a> earlier this month.



LUNA’s Tuesday morning price of $33.43 was up 208% from 30 days ago.&nbsp;



The ADA token of proof-of-stake blockchain platform Cardano is now <a href="https://cms.blockworks.co/cardano-now-third-largest-cryptocurrency-by-market-cap/" target="_blank" rel="noreferrer noopener">the third-largest cryptocurrency</a> by market capitalization, which was $90 billion on Tuesday morning, CoinGecko indicates. ADA’s price of $2.78 was up about 110% from 30 days ago.



Another coin to see massive price growth is AVAX, the token of the Avalanche blockchain, which was up about 215% over the last 30 days as of Tuesday morning, CoinGecko indicates.



<h3 class="wp-block-heading">Layer-1 developments&nbsp;</h3>



Avi Felman, co-portfolio manager at BlockTower Capital, said that after <a href="https://cms.blockworks.co/eip-1559-is-live-thanks-to-ethereums-london-hard-fork/" target="_blank" rel="noreferrer noopener">EIP 1559</a> — a proposal to reform the Ethereum fee market — there was a lull in narrative for Ethereum. Alternative Layer-1s seized this opportunity and pushed hard on efforts to onboard new users, he noted.



Solana’s recent surge in prices follows increasing demand for non-fungible tokens. Solana’s network was used to help create NFTs such as the “Degenerate Ape Academy” in recent weeks. Solana revealed on Twitter several days ago that it was to <a href="https://solana.com/ignition" target="_blank" rel="noreferrer noopener">reveal more news</a> on Tuesday.&nbsp;



Cardano gets set to execute a smart contract upgrade on its main network with a hard fork that is set to occur on Sept. 12. David Tawil, president of ProChain Capital, previously said that an uptick in adoption of the network could justify a valuation that is similar or equal to Ethereum due to the functionality becoming the same or better.



“We’re lucky to have very smart and ambitious competitors focused on [smart contracts],” he noted. “These participants will continue to sharpen each other; it is capitalism in the truest sense.”



The new Avalanche Bridge, which allows users to transfer DeFi tokens and programs from the Ethereum network to Avalanche, has already seen over $1 billion in assets transferred since launching a month ago.



Avalanche then introduced a $180 million liquidity <a href="https://cms.blockworks.co/avalanche-to-add-defi-protocols-aave-and-curve/" target="_blank" rel="noreferrer noopener">mining incentive program</a> in an effort to entice developers to begin exploring its blockchain. The blockchain added DeFi protocols <a href="https://u7061146.ct.sendgrid.net/ls/click?upn=4tNED-2FM8iDZJQyQ53jATUTy-2BORT2jbNG7jEOqPUJVoQ-3Djj2f_AtBOqtbz2wW6S0rSGnE7surmL2HP9eJM7-2F3Q6xGwu6sE3WjGc9HndL-2FskgH4k61EigRf9MfCGJvjQ7rkatSq5cegFYk-2FfVWZRFOYxlYptgCUP9PizJHpP15YX0Srecmvh3NRgRQ0jVSgb5cdgFGrj8sQwJgxFIBg7W5aDwbQFcEjUUg9pnxeMg3q7gnAU1eKNU-2BS2p70APepaSOIz34MtTm9F75N1go1T7osrKbwqc2HjmujxcKmOZaTtwiWilf490m9K7ssyEOQDtRu0oigyvlNTd8AsIdTunjrlnKdLshJDiKwcBRL0QE0X5Mf0P9Pud-2Bq0T8j0zdwz10QVizc2Q-3D-3D">Aave</a>, <a href="https://u7061146.ct.sendgrid.net/ls/click?upn=4tNED-2FM8iDZJQyQ53jATUXx6OAnsSLW4matVJPTR1aQ-3DSD-9_AtBOqtbz2wW6S0rSGnE7surmL2HP9eJM7-2F3Q6xGwu6sE3WjGc9HndL-2FskgH4k61EigRf9MfCGJvjQ7rkatSq5cegFYk-2FfVWZRFOYxlYptgCUP9PizJHpP15YX0Srecmvh3NRgRQ0jVSgb5cdgFGrj8sQwJgxFIBg7W5aDwbQFcEjUUg9pnxeMg3q7gnAU1eK-2FR2arMfq7DbCFQraYh7ediKxzbj214TSeaC8JMd4piB0qBQ5Khoqu-2F9Lc85YNqFf2c-2Bj98hqqcBDUZ5-2B4SHQpf3XK7hi7SzJkHDIQdxTvJxDTJJedmeCVtP1cm7C6772T0Qnh4W9lcu7wGNSU8Iqyg-3D-3D" target="_blank" rel="noreferrer noopener">Curve</a> and <a href="https://sushi.com" target="_blank" rel="noreferrer noopener">Sushi</a> as part of the program.



On Monday, <a href="https://fantom.foundation/blog/announcing-370m-ftm-incentive-program/" target="_blank" rel="noreferrer noopener">Fantom revealed</a> it has committed a total of 370 million FTM, currently valued at about $300 million, to distribute to protocols developed on Fantom.



“The playbook now seems to be simple,” Felman told Blockworks. “Build a functional [Ethereum to alternative Layer-1] bridge, onboard blue chip DeFi protocols, launch a few NFT projects, and introduce massive incentives to port over.”



Want more investor-focused content on digital assets?&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a>&nbsp;September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket.&nbsp;<a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.

Solana, Cardano, Avalanche Could Threaten Ethereum DeFi Dominance

<div id="highlights-block_6125218fc64db" class="highlights">
 <ul>
 <li>Avalanche and Sushi have each allocated up to $7.5 million of liquidity mining incentives over a three-month period, which take the form of AVAX and SUSHI rewards</li>
 <li>More than $1 billion has transferred from Ethereum to Avalanche over the newly launched Avalanche Bridge, according to Ava Labs’ director of DeFi</li>
 </ul>
 
</div>



About a week after revealing its blockchain would be adding DeFi protocols Aave and Curve as part of a new <a href="https://cms.blockworks.co/avalanche-to-add-defi-protocols-aave-and-curve/">$180 million liquidity mining incentive program</a>, Avalanche will also add <a href="http://sushi.com">Sushi</a>.



“Sushi is a blue-chip DeFi app that has made it a priority to expand to complementary, high-performance networks,” said Luigi D&#8217;Onorio DeMeo, director of DeFi at Ava Labs, the company behind the Avalanche blockchain. “The Sushi community is passionate about developing new, better technology, making it a natural fit into the vibrant ecosystem of DeFi users and projects on Avalanche.”



SushiSwap has surpassed $5 billion in asset growth since its launch last August. The upcoming deployment of Sushi on Avalanche will provide DeFi traders access to products with high-yield farming rewards and near-instant finality, the firm said in a release.&nbsp;



Sushi’s new development, Trident, which <a href="https://www.prnewswire.com/news-releases/sushiswap-reveals-720-announcement-as-sushis-next-generation-amm-trident-301337039.html">the firm has described</a> as the next-generation automated market maker, or AMM, will provide the Avalanche ecosystem with new abilities to maximize yield and efficiency. Such features include a “hybrid pool” that reduces swap price impacts by using a stableswap curve to trade between similar assets.&nbsp;



Avalanche announced last week the upcoming launch of mining incentive program Avalanche Rush. It was set to provide Avalanche’s native token, AVAX, in initial allocations of $20 million AVAX and $7 million AVAX for Aave and Curve users, respectively.



SEC Chairman Gary Gensler said last week that DeFi projects that reward participants with valuable digital tokens or other incentives could count as activity to be regulated, <a href="https://www.wsj.com/articles/cryptos-defi-projects-arent-immune-to-regulation-secs-gensler-says-11629365401?mod=hp_lead_pos10">the Wall Street Journal reported</a>.



An Avalanche spokesperson told Blockworks that Ava Labs has not had direct conversations with the SEC but continues to monitor all developments at the agency.



“Ava Labs believes that the US should have a leadership role in blockchain from a technology, business and regulatory standpoint and support sensible, comprehensive crypto asset regulation,” the representative said.&nbsp;



Expanding the program



The Avalanche Foundation and Sushi have each allocated up to $7.5 million of liquidity mining incentives over a three-month period. These incentives will take the form of AVAX and SUSHI rewards, split evenly. An exact date on which the incentives will begin has not yet been announced.



As of Noon eastern on Tuesday, AVAX was priced at $47.86 and had a market capitalization of nearly $8.4 billion, according to CoinGecko. SUSHI, priced at $12.53, had a market cap of about $2.4 billion.



“The Avalanche community is one of the most compelling reasons to align incentives with the Avalanche chain,” Sushi lead contributor 0xMaki said in a statement. “We are a community-driven platform and admire the community focus in the Avalanche ecosystem and look forward to providing them with a positive DeFi experience.”



Though the Sushi decentralized exchange has been deployed across 20 blockchains, Avalanche is one of the few chains to provide SUSHI incentives outside of the Ethereum mainnet, Avalanche noted in a press release.



During the past few weeks, more than $1 billion has transferred from Ethereum to Avalanche over the newly launched <a href="https://bridge.avax.network/login">Avalanche Bridge</a>, DeMeo told Blockworks.&nbsp;



Though the firm has said it will look to continue adding DeFi protocols as part of the incentive program, the DeFi director added that it is still to be determined how many.



“In addition to a number of projects already in the pipeline, we are seeing decentralization work in real-time,” DeMeo said. “There are many applications already deploying on the network on their own, and a large number reaching out eager to join Avalanche Rush.”



Want more investor-focused content on digital assets? <a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Join us</a> September 13th and 14th for the Digital Asset Summit (DAS) in NYC. Use code ARTICLE for $75 off your ticket. <a target="_blank" href="https://cms.blockworks.co/events/digital-asset-summit-2021-2/" rel="noreferrer noopener">Buy it now</a>.