Since many in #SushiSwap community have asked, this is indeed, true. There's no denying that we've sold the existing dev shares and put future $SUSHI dev shares into MultiSig community owns.— 🍣 SushiSwap | sushiswap.eth (@SushiSwap) September 5, 2020
Now we go back to making sure that the Liquidity Migration happens smoothly in <48hr ✅ https://t.co/nSeliVJFSu
The anonymous creator removing a large chunk of liquidity is what many have come to meme a ‘rug pull’. The dev share contract held more than 2.5M SUSHI along with 20k ETH. After removing nearly half the liquidity from the SUSHI/ETH pool, 2.5M SUSHI was sold for 18k ETH, amounting to roughly $6M of profits at the time of sale and a $7M stash from the other half of the devshare liquidity. In total, Chef Nomi made off with roughly $13M at the time of writing.
Not an Exit Scam?
While many were quick to claim that ChefNomi has exit scammed, the lead developer has been very vocal about the sale on Twitter, claiming that he cashed out to “focus on building”.
To @SushiSwap community. Since there's a lot of FUD around the migration, I've taken measure to put everything to back my words & make sure the LP migrations goes as smoothly as possible. That's my main job as the creator of this whole thing.— Chef Nomi #SushiSwap (@NomiChef) September 5, 2020
As anyone could have guessed, the community is now up and arms, claiming that the entire project is now toast due to a loss of trust. Still, Chef Nomi is chugging on, deploying the contracts for the forthcoming SushiSwap migration set to take place tomorrow.
Following the dump, Uniswap’s TVL dropped by more than 35% as the rest of the market continues to slide for a myriad of reasons.
Proving Critics Right
The timing has left many to wonder if Chef Nomi even planned to hand over the Master Chef and devshare contracts via MultiSig wallet in the first place. Still, the conversation to hand power over to the community continues, albeit with drastically less attention.
In the light of the recent events, I understand if some of you do not want to participate in the MultiSig anymore. Thus, if you still want to be part of SushiSwap signers, please reply here (again) with your address. I will set up votes within 12 hours.— Chef Nomi #SushiSwap (@NomiChef) September 5, 2020
Many well-known thought leaders were openly against the Uniswap clone from day one. With SUSHI down more than 50% on the day, it seems like a poetic ending to the community AMM which aggregated more than $1B in liquidity in under a week. Chef Nomi tried to justify the move by comparing it to what Litecoin founder, Charlie Lee, did when he sold his tokens at the peak of the 2017 bull market.
SushiSwap demonstrates that you can copy a concept, and you can copy code, but you can’t copy community, continuity, or character.— Erik Voorhees (@ErikVoorhees) September 5, 2020
Now, a weird middle ground ensues. The migration is expected to still happen as planned, and at the time of writing SushiSwap still has nearly $900M in liquidity currently locked in it’s contracts. Whether it be due to outrageous gas prices or an underdog hope that SushiSwap can give the funding to a community-owned wallet, the next 48 hours are sure to be one of the most interest we’ve seen to date.
To stay up with SushiSwap, follow the project on Twitter.
Tarang discovered ETH in 2018 and has been actively involved in DeFi after finding PoolTogether in 2019. He’s most interested in the DEX sector as a frequent user and participant in Uniswap and Kyber Network alongside lending protocols like Aave. Tarang’s active presence in DeFi has given him a front-row seat to cutting edge trends and real-time developments. Stay up with Tarang by following him on Twitter.