$1.46 billion lost! After Uniswap suspended UNI mining, Sushi became the biggest winner

On the morning of November 17th, Beijing time, the two-month Uniswap initial liquidity mining activity officially ended. Before the end of mining, Uniswap's liquidity once exceeded US$3.1 billion, of which more than US$2.2 billion came from the four mining pools of ETH/USDT, ETH/USDC, ETH/DAI and ETH/WBTC.

According to the latest data from defipulse, after the suspension of UNI mining, Uniswap's locked funds have dropped to US$1.64 billion, a 43.48% drop from 24 hours ago.

Although community members have proposed to continue UNI mining, the proposal has not been passed so far because the required number of participants in UNI governance has not been reached. As usual, the Uniswap team and the well-known investment institutions behind it were still absent from the vote.

“Calling all Uniswap politicians - the time is now! @MonetSupply and I proposed a plan to continue liquidity mining by reducing UNI incentives. This would reduce the monthly allocation reward from 10 million UNI to 5 million UNI, spread across the same four pools.

”

There is currently strong evidence that the liquidity provided by UNI rewards exceeds market demand, and assets can only be attracted to the Uniswap platform if more trading volume is obtained.

For example, does Uniswap need an $800 million ETH/WBTC pool? If a $400 million reserve pool can generate similar trading volume, why allocate UNI to attract vanity assets?

As of now, the community is still voting on the "UNI reward halving" proposal put forward by Cooper and Monet Supply. The proposal currently has 65% of the votes in favor, but it will take several thousand people to reach the required number of participants.

Sushi successfully intercepts liquidity again

Before the suspension of UNI mining, Uniswap’s top fork project SushiSwap announced changes to its mining rules, distributing revenue to the following four pools. The purpose is naturally to intercept a portion of the mining funds lost from Uniswap:

1. ETH/USDT;

2. ETH/USDC;

3. ETH/DAI;

4. ETH/wBTC;

And this strategy seems to have worked. A few hours after the UNI mining rewards stopped, hundreds of millions of dollars worth of assets flowed from Uniswap to SushiSwap, with the ETH/WBTC asset pair having the largest amount. In general, Uniswap's ETH/WBTC asset pair lost 50% of its total locked value (TVL) (about $350 million), while Sushiswap's ETH/WBTC pool added more than $100 million in liquidity.

What’s next?

Perhaps another round of liquidity fleeing Uniswap will prompt UNI voters to take action, so reaching the required number of voters should be achievable, and restoring the “status quo” is the most likely, but it is difficult to see UNI governance reaching consensus on other aspects.

Another possibility is that fees from Uniswap may be stickier than liquidity. Uniswap will continue to drive price discovery, and the migration of individual LPs will not have a substantial impact on the flow of Uniswap.exchange.

What do you think?

Link to this article: https://www.8btc.com/article/669904
Please indicate the source of the article when reprinting