Slashed SUSHI Rewards Pave Way for Uniswap to Overtake SushiSwap in TVL
Uniswap reclaims its throne as the top go-to DEX among users.
Slashed SUSHI Rewards to Blame
SushiSwap, the hard fork of premier decentralized exchange (DEX) Uniswap recently slashed its block rewards for liquidity providers (LPs) from 1,000 tokens to just 100.
This cut in rewards reflected in the protocol’s total value locked (TVL) which dramatically plunged from around $1.46 billion on Saturday to approximately $850 million as of press time, according to data from SushiSwap Vision, a fork of the explorer used by Uniswap.
The tumbling block rewards, however, did not have a particularly significant impact on SushiSwap’s token, SUSHI’s price. In the same period, the token fell from $2.45 to $2.23.
In the meantime, premier DEX Uniswap witnessed a surge in its TVL. At press time, the exchange has a TVL of $1.17 billion, up by more than 55% in a 24-hour period. In the same vein, the total crypto asset volume at Uniswap is now more than $417 million.
For the uninitiated, SushiSwap went ahead with its planned slashing of block rewards from 1,000 to 100 SUSHI for liquidity providers on Saturday after last week’s successful migration of $800 million in assets from Uniswap.
A report from Coindesk reads in part:
“The initial block rewards were designed to convince Uniswap LPs to entrust their LP tokens to SushiSwap so that it could migrate a large portion of Uniswap assets to SushiSwap when it went live (as it happens, Uniswap ended the migration with roughly double the assets it had before SushiSwap was announced).”
Clearly, the drop in the TVL for SushiSwap is a testimony to the fact that monetary rewards still play a significant role in buying the loyal of investors. Once these rewards are no longer attractive enough, the “yield farmers” flock to other similar protocols that offer exorbitant yields on their staked coins.
Uniswap Reigns Supreme
While the roller-coaster drama associated with SushiSwap dominated the crypto news circle the past week, things gradually seem to be returning back to the status quo with Uniswap regaining its lost market share in the DEX space.
As reported by BTCManager on September 3, Uniswap had become the first DEX to exceed $1 billion in terms of 24-hour trade volumes.