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SushiSwap is currently one of the fastest growing DeFi protocols on the market. Since its launch in August 2020, it has only taken a year for the protocol to become one of the top 10. In fact, in many ways he left behind Uniswap, the protocol from which he was derived. However, it appears that this is the case for SushiSwap and it may not develop further.
So, the question – What made SushiSwap great and what keeps it from being bigger?
SushiSwap on the rise?
Today, the Total Locked-In Value (TVL) in SushiSwap is up over 990% from what it was last year. And today, it is also the only protocol to be deployed on more than 10 channels. Right now that number is 14.
This has allowed it to grow so rapidly that, despite the launch of Arbitrum’s mainnet just 17 days ago, the protocol already contains nearly $ 30 million.
SushiSwap TVL on 14 blockchains | Source: Llama Challenge – AMBCrypto
However, despite being rolled out across 14 channels, the reason it still ranks 10th is the audience it caters to.
What is stopping SushiSwap?
It’s very formal. Being a Decentralized Exchange (DEX) limits its use to people only looking to trade tokens. On the contrary, since AAVE are loan and win systems, they allow higher values to be locked in.
This is why it leads the space despite only 76,000 users while SushiSwap has 447,000 users. AAVE’s easy and widely accessible protocol has led to an increase in its TVL of 1361%. In fact, the same amount stood at $ 14.18 billion at the time of publication.
Sushiswap’s DEX-only feature is the same reason that on 50% of the channels deployed, the TVL is less than $ 1 million. In fact, some even only have $ 26 as their total TVL.
Total number of AAVE users | Source: Dune Analytics – AMBCrypto
However, the remaining 50% also maintains the protocol and its token. Over the past week, SUSHI is up 47.38%, topping $ 15 on the charts, before dropping back down to $ 14 at time of publication.
This led optimistic investors to buy over 833,000 SUSHI on exchanges worth $ 11.6 million in just 1 day.
SushiSwap net transfer volume | Source: Glassnode – AMBCrypto
Simply put, SushiSwap needs a higher monetary infusion to make it a bigger protocol. Until then, its volatility will keep investors in doubt.
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