A vampire protocol has driven Uniswap to the top of the decentralized finance (DeFi) charts.
As of roughly 21:00 UTC, the automated market maker (AMM) has $1.65 billion in total value locked, according to DeFi Pulse, unseating lending platform Aave.
Sources with knowledge of the situation tell CryptoX this is driven largely by a new Uniswap competitor, SushiSwap. One of the newer members of the Weird DeFi cohort is predicated on giving rewards in perpetuity to holders of its SUSHI token.
According to an announcement on Medium, for roughly two weeks (100,000 blocks) ahead of launch, Ethereum users who stake liquidity provider (LP) tokens from Uniswap to SushiSwap will get 10X the liquidity mining rewards in the early going (1,000 SUSHI per block now versus 100 SUSHI after launch).
Right now SushiSwap is distributing rewards for LP tokens on ETH pools matched with USDT, USDC, AMPL, DAI, LINK, YFI and others. SUSHI holders will be able to vote-in more pools later.
Liquidity mining is when users get a new token for depositing their assets somewhere. What SushiSwap is doing is new. So, by dumping assets into Uniswap now, DeFi degens can amass LP tokens, which they can dump immediately into Sushi and take advantage of this brief period of extremely generous SUSHI distribution.
Once the bonus period ends, SushiSwap will redeem all the Uniswap LP tokens and move its rival’s assets over to SuhiSwap’s own pools, which is why some in the community are calling it “vampire mining.”
Whereas Uniswap keeps 3% of every trade and distributes it to liquidity providers, Sushi will distribute 2.5% to liquidity providers and the rest to SUSHI holders.
DeFi Pulse always notes the “dominance” of the leading project. Uniswap dominance currently sits at 17.5%.
