The countdown has began for the sushi migration with now just an hour left for final testing before the CRV-ETH pool is migrated.
Liquidity has dropped however and somewhat considerably from $1.2 billion to now $820 million.
It’s unclear why liquidity has dropped with one reason potentially being just in case there’s some bug or some problem during the migration.
Another reason may well be they perhaps want to keep it on Uniswap with its founder, Hayden Adams, tweeting “pretty colors” and the above featured image.
Everyone is speculating this has something to do with V3 when Uniswap is to launch its own token, so opening the battle of decentralized exchanges.
Currently Liquidity Providers (LPs) get 0.3% in fees on Uniswap, while on Sushi it is 0.25%.
However, these LPs have been mining sushi, so they’ll get 0.05% towards the sushi token plus a 1 million sushi airdrop once migration is completed.
In addition new sushi mining will drop by 10x, making it all a complicated decision regarding risks and rewards.
It does look like there’s enough liquidity for both dexes however, so it may well be for some time people trade on both with it unclear what the tokonomics of V3 are as much of it currently is speculation.
But what is clear is that defi is now becoming competitive, with a new business model so challenging the old one.