The biggest strength of the digital asset industry is sometimes its biggest downturn. DeFi has been a prime example of the recent SushiSwap dilemma. When the collective valuation of all assets was high, Yield Farmers and the new DeFi projects were talking to the city. As their bubble burst over the past week, SuShiSwap-associated proponents were the first to fold their cards on September 5.
According to an announcement made by Sushi’s anonymous developer Chef Nomi, he claimed that he was relinquishing his admin control of the ‘MasterChef’ and relinquishing his address to the MultiSig address behind the timelock.
However, what happened before the announcement was the key reason behind the enraged community. Prior to the release of the statement on Twitter, it was identified that Chef Nomi had an ETH / SUSHI liquidity pool. In a single transaction, SUSHI registered a withdrawal of SUSHI 2.5 million from the pool and exchanged these SUSHI tokens for ETH 18,000. It was found that his address was close to 35,000 ETH after the transfer.
Such an exit from the founder of a token did not fit well with the community, and people began to criticize the legitimacy of DeFi, particularly its listings of major exchanges.
Binance’s CZ faces backlash over DeFi listing
Taking the blame game to the next level, the community began to argue whether these DeFi tokens should have been listed first. Considering that Binance was one of the first major exchanges to introduce Sushi to potential users, the community indirectly questioned the work of Changpeng Zhao and the Binance team on the evaluation of DeFi projects before listing them.
During the outcry, CZ responded that he did not know the founder of SushiSwap and reasoned that if Binance did not list new DeFi coins, the traffic would flow into other exchanges, making Binance ‘obsolete.’ The Block’s Larry Cermak responded to his statement. He said,
Can’t have it both ways. CZ is constantly flexing how Binance’s listing team does the most due diligence and how its listed projects perform the best. When it doesn’t work – “we are only providing access to liquidity so other exchanges don’t make us obsolete” LMAO pic.twitter.com/jMydz6LTNc
— Larry Cermak (@lawmaster) September 6, 2020
He also added that such centralized exchanges should take credit for scam projects when they go wrong and take fundamental steps to minimize the chances of project exit scamming in the future.
Will DeFi listing get better after the SushiSwap conundrum?
Although there is no guarantee in this respect, the SushiSwap incident highlighted the major impact of DeFi, which was evident from the outset; these projects are still subject to huge market risks.
Now the reports suggested that Chef Nomi had transferred the admin control to Sam Bankman-Fried, CEO of FTX. The CEO of FTX has gained a reputable name over the last few months and there is a growing hope that the Sushi project will undergo a successful migration of tokens from Uniswap tp Sushiswap.