The Decentralized Finance (DeFi) craze has hit a new level today with the rise of SushiSwap, which is the fastest growing DeFi project yet. SushiSwap launched just 3 days ago and it already has a total value locked in excess of $1.4 billion. This far exceeds the previous hottest DeFi frenzy, which was YAM, a project which exploded to over $500 million total value locked before collapsing.
Just like YAM, SushiSwap’s code is unaudited, presenting a danger that some sort of code bug will arise and crash the project. Considering this, it is mind boggling that so much money is pouring into SushiSwap, and it is reminiscent of the reckless abandon that occurred during the initial coin offering (ICO) boom of 2017.
It appears the reason SushiSwap is becoming so popular is that it is a simple fork of Uniswap, which is one of the most popular DeFi exchanges, except that has its own native token, called SUSHI, and liquidity providers on the SushiSwap decentralized exchange (DEX) earn SUSHI. This is unlike Uniswap which does not have a native token.
Basically, SushiSwap has created a DEX model where liquidity providers, i.e. people who deposit their money into the DEX, can earn the native token.
Notably, the SUSHI token is skyrocketing in value and is already worth over $10, which is up hundreds of percent just today.
Zooming out, it appears the SushiSwap frenzy is so powerful that it is having positive effects on the entire crypto space. DeFi total value locked has surged to over $9 billion, up $1 billion in about a day.
Also, the price of Bitcoin (BTC) has rallied to the $12,000 level, and Ethereum (ETH) is up 10% in the past day and near $475. It seems Bitcoin (BTC) and Ethereum (ETH) are rising due to the massive amount of buying pressure from DeFi investors.
Thus, SushiSwap is the hottest DeFi project yet, although it remains to be seen if it will collapse like YAM due to having unaudited code. In any case, it seems SushiSwap is so hot that it is causing a broad crypto rally which may finally take Bitcoin (BTC) past the long term resistance level at $12,000.