Comprehensive analysis of Sushiswap: Developers found SushiSwap double-spending vulnerability? What is the value support of Sushi?
Summary of main points:
Summary of main points:
1. The concept of DeFi (Decentralized Finance, decentralized finance) continues to be popular. Since 2020, the total funds locked in the ecology in DEFI have increased from US$680 million at the beginning of the year to US$12.72 billion in September 2020, an increase of 1770%.
2. The concept of DeFi includes DEX, lending, stable currency, etc., among which DEX (Decentralized exchange, decentralized exchange) is the largest position in the concept of DeFi. Uniswap is the leader and trading center in the DEX field.
3. SushiSwap is positioned as an upgraded version of Uniswap, which provides liquidity mining on the basis of transactions and further rewards participants. As a new project launched on August 28, SushiSwap has developed extremely rapidly, and has broken through the lock-up amount of 1.5 billion US dollars; SUSHI, as the platform currency of Sushiswap, quickly landed on many first-line exchanges in a short period of time, achieving the highest price of 15 double the growth.
4. SushiSwap continues the core design of Uniswap in terms of transaction mode, and still adopts the AMM model. The difference is that SushiSwap provides liquidity providers with 0.25% of the transaction amount, and the remaining 0.05% will be converted into Sushi for Sushi holders; ensuring that early-stage liquidity providers can obtain higher system income.
5. SushiSwap has not launched trading business yet, but uses the Uniswap platform for liquidity mining, and then migrates all the liquidity tokens mortgaged on the SushiSwap contract; but once the return decreases, some pledged tokens are expected to Leave; Considering the high uncertainty of the migration process, more pledged tokens may choose to leave before the migration.
6. Value support: The current daily trading volume of Uniswap can reach 1 billion US dollars. If the benchmark DEX industry’s leading trading volume is 30% (300 million US dollars), SUSHI tokens can capture a value of 150,000 US dollars a day, and capture about 100,000 US dollars a year. $54 million value. In addition, SUSHI can also be used for subsequent platform governance.
7. Market performance: On September 1, 2020, Sushi was listed on several well-known exchanges within a day, with the lowest price of 0.7U and the highest price of 11.5U. It completed a 15-fold increase in its own price in less than 6 days, but then Sushiswap Founder Chef Nomi sold $6 million worth of ETH, causing SUSHI tokens to plummet; according to coingecko data, Sushi is currently listed on first-tier exchanges including Binance, OKEX, Huobi, GATE, MXC, etc., with a total daily trading volume of more than 7,000 Ten thousand U.S. dollars.
8. Security: The SushiSwap code invited Trailsof Bits to audit the contract, but the contract of MasterChef (providing liquidity mining function) has not yet been audited. According to anonymous Twitter user Chef Nomi, the audit work progress of the smart contract of the SushiSwap project Smooth; the smart contracts of two Sushiswap imitation projects YUNo Finance (YUNO) and KIMCHI.finance (KIMCHI) were found to have loopholes. On September 7th, according to Cointelegraph, developers discovered a major governance flaw (double spend vulnerability) in SushiSwap. SushiSwap seems to be vulnerable to vulnerabilities, multiplying someone's money without needing to obtain new tokens. governance capabilities.
9. With liquidity mining method
Recently, the concept of DeFi (Decentralized Finance, Decentralized Finance) has continued to be hot, and the popularity has soared rapidly since June. Measured by Total Value Locked (TVL, Total Value Locked), the total value locked in DEFI in 2020 has increased from US$680 million at the beginning of the year to US$12.72 billion in September 2020, which is an increase of 1770%.
The concept of DeFi includes DEX, lending, stable currency, etc., among which DEX (Decentralized exchange, decentralized exchange) is the largest position in the concept of DeFi. As the leader and trading center in the DEX field - Uniswap's locked assets have exceeded 2.1 billion US dollars, and the 24-hour transaction volume has exceeded 1 billion US dollars.
DEFI project locked funds list
Source: debank
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1. About Sushiswap
SushiSwap was built on Ethereum by a developer named ChefNomi. It is positioned as an upgraded version of Uniswap with the addition of SUSHI token economics, providing liquidity mining on the basis of transactions, and further rewarding participants.
The Uniswap protocol enables exchange between tokens through AMM (Automated Market Maker) model tokens. SushiSwap continues the core design of Uniswap in terms of transaction mode, and still adopts the AMM model. But unlike Uniswap, Sushiswap has added an economic incentive model that distributes a portion of its transaction fees to holders of the Sushiswap token SUSHI. Uniswap currently does not have its governance token, while Sushiswap has its own governance token SUSHI.
Similarities and differences between SushiSwap and Uniswap: The income of Uniswap's liquidity providers comes from transaction fees, which are currently 0.3% of the transaction amount, distributed in proportion to the amount in the fund pool. Uniswap's liquidity providers only earn transaction fees from the fund pool when users provide liquidity. After withdrawing funds from the fund pool, users will no longer receive corresponding income; as other funds are added one after another, early liquidity providers earnings will be diluted.
SushiSwap and Uniswap also use transaction fees to reward; the difference is that SushiSwap provides liquidity providers with 0.25% of the transaction amount, and the remaining 0.05% will be converted into Sushi and distributed to Sushi holders; even if liquidity is no longer provided , SUSHI tokens also enable early-stage liquidity providers to continue to receive part of the transaction fees of the SUSHI platform, ensuring that early-stage liquidity providers can obtain higher system income.
The launch of SushiSwap not only stimulates investors to provide funds to the Uniswap fund pool, but also attracts a large amount of Uniswap liquidity to SushiSwap. Driven by this, the trading volume of Uniswap has surpassed that of Coinbase, and the locked-up funds have grown rapidly. It has currently exceeded 1.7 billion US dollars, and the locked-up volume of the liquidity pool has increased by more than 5 times; among them, the locked-up funds of SushiSwap exceeded 1 billion US dollars in just 4 days.
Liquidity migration: SushiSwap has not launched trading business yet, but uses Uniswap’s platform for liquidity mining. Currently, nearly US$1.5 billion of the US$2 billion locked funds on Uniswap belong to SushiSwap. After that, SushiSwap will migrate all the liquidity tokens mortgaged on the SushiSwap contract: it involves obtaining all Uniswap LP tokens mortgaged on SushiSwap, redeeming the original tokens on Uniswap, and transferring them to the SushiSwap liquidity pool. The new SushiSwap fund pool will be almost the same as the standard Uniswap fund pool, and its new function is to distribute transaction fees generated on SushiSwap to SUSHI token holders.
UNISWAP lockup amount (USD)
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SushiSwap locked volume (USD)
Source: debank
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2. About SUSHI
Users can obtain SUSHI tokens by providing liquidity, and anyone who holds Uniswap LP tokens can pledge them to the corresponding pool and receive token rewards from block height 10750000. Each block will create 100 SUSHI, which will be evenly distributed to the pledgers of each support pool; in the first 100,000 blocks (about 2 weeks), the production quantity of SUSHI will be 10 times, that is, 1,000 SUSHI will be produced per block , to incentivize early liquidity providers. 0.25% of rewards will be transferred directly to active liquidity providers, and the remaining 0.05% will be repurchased to Sushi holders. 10% of the SUSHI distribution will be set aside for development and future iterations, including security audits.
Sushi value support: 0.05% transaction fee will become an important value support for SUSHI, which means that the value of SUSHI is directly linked to the transaction volume of the platform. Currently, the daily trading volume of Uniswap can reach 1 billion US dollars. If 30% of the industry’s leading trading volume (300 million US dollars) is benchmarked, SUSHI tokens can capture a value of 150,000 US dollars a day, and a year can capture about 54 million US dollars in value. In addition, SUSHI can also be used for subsequent platform governance.
The initial fund pool of SUSHI in UNISWAP is as shown in the figure below, in which the SUSHI/WETH fund pool gets twice the reward. The SUSHI/ETH pool is the only pool that contains the SUSHI token itself, and its rate of return is set to be twice that of other pools; liquidity miners must have SUSHI equivalent to half of their funds (SUSHI and WETH require a 1:1 ratio ) to join the pool, which increases the demand for SUSHI.
UNISWAP initial fund pool
SushiSwap previously initiated the SIP-4 proposal, which aims to add more new LP pools through voting. The top 5 voters will be added to SushiSwap to participate in the Sushi liquidity mining pool, and the initial reward weight is 0.2 times. On September 2, Chef Nomi tweeted that SushiSwap will open five new liquidity pools REN-ETH, sUSD-BASED, SRM-ETH, YAMv2-ETH, ETH-CRV, and all adjustments will be made in September Beijing time It will take effect after 15:00 on the 4th.
On September 8, FTX founder Sam Bankman Fried (SBF) tweeted his views on Sushi's later development direction: the top priority at present should be to ensure the success of the migration and the successful transfer of multi-signature management rights. For Sushi development mentioned:
1. Agree to reduce Sushi supply. As inflation subsides, a few things will happen naturally.
2. Part of Sushi's rewards should be locked. Follow the current schedule, but unlock 1/6 Sushi, lock 1/3 Sushi for a year, and reduce the 50% rate.
3. At that time, the taker rate will be reduced from 30 bps to 20 bps, the maker rebate will be 15 bps, and the SUSHI holders will be 5 bps.
4. Next, cooperate with Compound and Aave to create margin trading on Sushiswap.
5. Create a SushiSwap branch on Serum.
Market performance: The current market value of Sushi is about 280 million US dollars, and the circulating supply is 32 million SUSHI. On September 1, 2020, Sushi was listed on several well-known exchanges within one day, with the lowest price of 0.7U and the highest price of 11.5U. It completed a 15-fold increase in its own price in less than 6 days, but then fell with the market; Sushiswap founder Chef Nomi sold $6 million worth of ETH, causing SUSHI tokens to plummet; according to coingecko data, Sushi is currently listed on first-line exchanges including Binance, OKEX, Huobi, GATE, MXC, etc. The total daily trading volume More than $70 million.
Sushi market performance
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3. Security and othershttps://github.com/sushiswap/sushiswap。
According to the introduction, the code of SushiSwap mainly comes from Yam. SushiSwap invited Trailsof Bits, PeckShield, OpenZeppelin, Consensys, Certik and Quantstamp to audit the contract and smart contract address
Currently, according to official information (as shown below), the contract of MasterChef (providing liquidity mining function) has not been audited and is still in the beta version. At the same time, the CertiK security research team discovered that there are loopholes in the smart contracts of two Sushiswap imitation projects, YUNo Finance (YUNO) and KIMCHI.finance (KIMCHI).
According to the anonymous Twitter user "Chef Nomi", the audit of the smart contract of the Sushiswap project is progressing smoothly, and a work related to "migration of contracts and procedures" is currently underway, and the audit results may be released soon. Chef Nomi also stated that control will be transferred to some form of governance in the future, but it is not a priority at present.
Facing the challenge of Sushiswap, on the evening of September 1st, Uniswap founder Hayden Adams tweeted that SushiSwap is a high-risk project that any capable developer can create within a day, most of which are giant whale users. Whales try to cash in on the hype and the value created by Uniswap.
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4. Attachment: Liquidity Mining Method
Select Pool on the Uniswap interface, click AddLiquity; add USDT-ETH liquidity according to the current ratio, and you will get LP tokens after confirmation.
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