Sushi CTO autograph: what we have done in the past few months

Original post by Matthew Lilley, CTO of Sushi

Translator: Odaily Azuma

On June 22, Sushi Chief Technology Officer Matthew Lilley posted a long post on his personal Twitter, disclosing to the outside world some of Sushi's internal development trends in the past few months, which involved Trident, MasterChef, Sushi Smart Pools, RouteProcessor , SushiXSwap and other sub-product lines' survival and iteration plans.

The following is the full text of Matthew Lilley, compiled by Odaily.

1. This is a long overdue summary of what's going on within Sushi over the past few months.

2. Trident (Note: AMM new model self-developed by Sushi) is being discontinued.It's an interesting experiment, but a product born of chaos cannot be competitive, and its architecture is not attractive to liquidity providers (LPs) who need flexibility, nor can it improve market efficiency.

3. SushiSwap V3 has been deployed on 20 blockchains, and 5 more chains will be deployed soon. As far as I know, this is the Dapp with the widest coverage so far. The protocol’s TVL and transaction volume have grown steadily since deployment.

3. MasterChef and MasterChef V2 (Note: Both are Sushi's liquidity incentive contracts) will also be phased out.While MasterChef is somewhat innovative, it has proven difficult over time to scale in terms of multiple rewards, and it is not particularly efficient as an incentive mechanism, in fact only through simple liquidity mining Its effect can be realized.

4. MasterChef V2 is even more of a downgrade of the original MasterChef concept, which introduces many new problems, such as insolvency. In addition, MasterChef V2 is also difficult to scale, and it has become a very annoying technical debt inside Sushi, causing us a lot of trouble.

5. After many attempts and failures,We built a more innovative incentive mechanism to replace MasterChef, our conclusions include:

• Forcing LPs to passively pledge is a kind of reverse innovation, which will lead to "regulation" of LPs, which is not attractive to LPs with flexibility needs.

• Blindly motivating LPs without considering performance is a very inefficient incentive. The consumption of each SUSHI should not only be used to motivate liquidity, but also to motivate this liquidity to achieve maximum market-making efficiency.

6. For us, the solution to this problem is to use Angle Protocol's Merkl product. It has the expansion potential of unlimited incentives for a single pool, and it also supports parameter settings, so that we can not only motivate liquidity, but also motivate the liquidity to achieve the maximum market-making efficiency, and ultimately provide users with better transaction prices.

7. Currently, Merkl has integrated the Sushi protocol on at least a few blockchains, including Ethereum, Arbitrum, Optimism, Polygon, etc., and plans to expand to more chains. While integrating Merkl, MasterChef will also be shut down in due course.

8. So, what's next?

9. Sushi Smart Pools (Note: Sushi's new strategic market-making service) is powered by Steer Protocol's GOATs product. As of the publication, 9 market-making strategies are available, and more strategies are planned.The integration of this product with the Sushi front end is in progress, and users can currently use the Steer Protocol providedUITry it out.

10. Since the release of this product has not been well publicized, let me briefly explain that through the market-making strategy provided by Sushi Smart Pools, LPs can conduct more efficient market-making on SushiSwap V3, thereby increasing the rate of return .

11. RouteProcessor (Note: Sushi's transaction aggregation service) is undergoing rapid iteration.We have learned the hard way that this is dangerous, but we are committed to covering more liquidity sources.

12. RouteProcessor V3 is live and V4 is under active development. We expect to cover most of the liquidity sources in the market in the third quarter, and then start to focus on some lesser-known liquidity sources.

13. This is obviously good news for Sushi users, as it means we can offer more competitive offers for a large number of tokens, which we were not able to do before. For Sushi's LPs, this does not affect them to continue to help Sushi make the market, because our aggregation routing will be more biased towards Sushi's own pool.

14. SushiXSwap V1 (Note: Sushi's cross-chain exchange service) has been in operation for more than a year, and active users have continued to grow.SushiXSwap V2 is under development, it will open up cross-chain swaps between more chains, and will make full use of RouteProcessor.

15. All in all, we've been busy. The team is working well and has been efficient, we have had some hiccups but that's part of the game. If you never fail, it just means you never tried. Believe me, we are working on it.

16. We can proudly say that for the past two years, despite struggling governance and finances, Sushi has been able to sustain itself without the need for an infusion of capital from the treasury or elsewhere.