When the Music Stopped: Uniswap Goes Silent
On November 17, the decentralized exchange Uniswap decided to ease off the gas pedal, ceasing its yield-farming incentive program. Coincidence or conspiracy? Either way, the timing couldn’t have been worse, as it marked the end of an era for liquidity providers who were feeling rather flush.
SushiSwap Takes a Bite Out of Uniswap
Not one to miss an opportunity, SushiSwap, Uniswap’s doppelganger, sprang into action with a new incentive scheme for the same four pairings that Uniswap had previously enjoyed. This swift pivot allowed SushiSwap to gobble up the liquidity providers left in the dust. Talk about a quick meal plan!
The Numbers Game: TVL Turmoil
- Uniswap saw its total value locked (TVL) drop by a jaw-dropping $1 billion in less than 24 hours.
- From a record high of $3.07 billion on November 14, it plummeted a staggering 57.5% to just $1.3 billion.
If Uniswap was a house of cards, that loving breeze just sent it tumbling down. Meanwhile, over at SushiSwap, celebrations were in order as its TVL soared nearly 160% from $407 million to a robust $1.05 billion – that’s like taking a small cake and turning it into a multi-tiered wedding disaster!
Other Shark Tanks Jump In
But it wasn’t just SushiSwap swimming upstream; Bancor also dove in with a liquidity mining program that included some retroactive rewards for added incentive. Clearly, everyone wanted their slice of the liquidity pie.
The Ambitious Rescue Plan for Uniswap
In an attempt to regain lost ground, a group of UNI token holders led by streaming platform Audius proposed reinstating Uniswap’s liquidity mining program, albeit at half the rewards. Unfortunately, after almost a month, Uniswap has yet to pass any proposals since decentralizing its governance, which seems to be about as effective as trying to herd cats! With two more stages of voting left to secure the necessary votes, can Uniswap rise again or is it destined to slowly drift into the DeFi twilight?
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