SUSHI was among the worst-performing cryptocurrencies on Thursday as the decentralized finance token faced a severe competitive threat from a rival.
Uniswap, a decentralized trading platform that inspired the launch of SUSHI’s parent project, Sushiswap, launched its governance token, UNI, Wednesday night.
Against the expected supply of 1 billion, Uniswap dispatched 150 million UNI tokens for users that have used or supported its exchange. At the time of distribution, an average UniSwap was receiving $1,344 worth of UNI tokens.
About 13,000 people claimed 400 UNI each, leading many observers to compare the airdrop with the US Congress’s stimulus package.
As UNI took the Crypto Twitter and other popular crypto media portals by surprise, its rival SUSHI suffered.
Massive Sell-Off
The Sushiswap’s governance crypto fell by a little over 16 percent on a 24-hour adjusted timeframe. On Thursday alone, the SUSHI/USD exchange rate was down more than 10 percent, changing hands for $1.357 a token in the early London trading session.
SUSHI/USD is trading 91.65 percent lower from its record high level. Source: TradingView.com
The losses followed a long streak of losing sessions after SUSHI topped at $15.970. They started as a downside correction after the DeFi token’s exponential bull run but matured after Sushiswap’s founder–an anonymous entity–sold all his SUSHI holdings for ETH.
Many observers fears that the Sushiswap co-founder exit-scammed. Later, a self-professed creator of the project, known as Chef Nomi, appeared to refute the allegations against him.
“People asked if I exit scammed,” he tweeted. “I did not. I am still here. I will continue to participate in the discussion. I will help with the technical part. I will help ensure we have a successful migration.”
But the damage was done. SUSHI plunged heavily after undergoing the scam allegations, falling to as low as $1.13 at one point in time.
The Sushiswap liquidity pool was still holding about $701 million worth of crypto funds. At its highest, the total value locked inside the protocol’s smart contract was $1.428 billion as of September 12, according to the data provided by DeFi Pulse.
In contrast, Uniswap’s pool recovered a good portion of that value that had gone to the Sushiswap’s reserve. The project’s TVL surged from $401.38 million on September 10 to $796.02 million as of this time of writing.
SUSHI Bearish Bias Intensifies
Market strategists saw the launch of UNI as bearish for SUSHI under the impression that the former’s liquidity pool was drawing capital out of the latter.
$SUSHI is basically done after $UNI starts mining tomorrow
— Mac ❄️🐺 (@MacnBTC) September 17, 2020
Alex Saunders, the founder of Nugget News AU, praised Sushiswap for its potential but criticized the project for its “poor governance.”
“SUSHI had so much potential but dug it’s own grave when @NomiChef dumped. It’s a long road back but still possible with FTX & Sam support.”
SUSHI now trades 91 percent lower from its highest level.
