Your favorite crypto news blog

SushiSwap (SUSHI) Vies for Buyers as Liquidity Pool Loses Out $1.13B

Other 2020/10/06 13:07 by Yashu Gola

There is nothing delicious about SUSHI anymore.

The SushiSwap decentralized exchange’s governance token continued on its downtrend as its price fell another 15 percent in the new week. As of 1130 UTC, SUSHI/USD was trading at $0.75, down 94 percent from its record high at $12.48, a level achieved on September 1, 2020.

SushiSwap, UniSwap, UNI, SUSHI, SUSHIUSD

Trust Issues

The SushiSwap liquidity pool also suffered a major blow.

The total valued locked (TVL) inside it plunged from $1.428 billion on September 12 to circa $289 million as of today. That marked withdrawals of almost $1.13 billion in just 24 days, according to data fetched by DeFi Pulse. It further showed investors’ receding confidence in SushiSwap, a project that had promised to outrank its top competitor UniSwap.

A higher TVL represents trust in the automated market maker industry. It ensures that more people are willing to support the exchange by depositing their capital into its reserves. In return, they anticipate strong incentives, a steady revenue from a portion of the transaction fees, as well as governance rights by holding the native token.

SushiSwap, UniSwap, UNI, SUSHI, SUSHIUSD, SushiSwap TVL

Nevertheless, if the trust disappears, so does the money. People start withdrawing their capital from the pool thereby reducing the exchange’s capability of processing trades faster in absence of adequate liquidity. In turn, revenue, as well as the appeal of the governance token, falls hand-in-hand.

SushSwap has faced severe trust issues with its liquidity providers ever since its founder Chef Nomi drained the protocol’s development fund off 38,000 ETH on September 7. The media termed it as an “exit scam,” even after FTX Exchange’s head Sam Bankman-Fried took control over SushiSwap.

Mr. Nomi later returned the capital back to the SushiSwap treasury but that has not been enough to earn the people’s trust all over again.

That is very reflective of the SUSHI market.

What’s Next for SUSHI?

In the absence of concrete bullish fundamentals, SUSHI risks getting exposed to the volatile market trends driven by technical traders.

For instance, the SushSwap token’s latest plunge coincides with the rest of the decentralized finance market. Almost every DeFi cryptocurrency that posted exponential gains in the third quarter is now down on its knees. It is because traders are either profit-taking or moving their capital into projects with long-term sustainability.

SushiSwap, UniSwap, UNI, SUSHI, SUSHIUSD, SushiSwap TVL

SUSHI expects to tail the broader market trend. With no credible history of price actions, the token is now undergoing a free fall. Watching its liquidity pool, meanwhile, could throw a few hints at its next market move.

0 Like(s)

You should also read...

Altcoins 04/09/20 01:00 by Guest Author
OKEx Lists Three More DeFi Tokens – SUSHI, YFV and CVP
The global crypto exchange and derivatives platform OKEx has started the month of September on a good note by adding three new tokens to its growing list of DeFi projects. With the addition of SushiSw...
Read More
Altcoins 17/09/20 13:00 by Yashu Gola
SUSHI Faces Massive Sell-off Following Uniswap’s Token Launch
SUSHI was among the worst-performing cryptocurrencies on Thursday as the decentralized finance token faced a severe competitive threat from a rival. Uniswap, a decentralized trading platform that insp...
Read More
Altcoins 18/09/20 15:00 by Yashu Gola
No Respite for UMA as DeFi Token Plunges Another 8%; What to Watch?
The UMA Protocol continued to lose portions of its market capitalization on Friday as its native token of the same name plunged further. THE UMA/USDT exchange rate was trading at $12.81 as of 12:14 UT...
Read More
Other 17/12/20 07:00 by Thomas Delahunty
5 of the Best Yield Farming Opportunities For 2021
Yield farming was the defi craze of summer 2020, taking the nascent industry by storm and ushering in new ways to distribute tokens, engage communities, and strengthen network effects. After peaking i...
Read More
Altcoins 20/05/21 09:37 by Livine Sanchez
ORBS Token is Now Accessible on SushiSwap Decentralized Exchange
Orbs, a hybrid blockchain infrastructure with enterprise-grade scale, has listed its token on SushiSwap, one of the largest decentralized exchanges by total value locked and volume. The new listin...
Read More