SushiSwap, the 142nd largest crypto asset by market cap, has been served with a subpoena by the U.S. Securities and Exchange Commission (SEC), according to a recent tweet from Santiment. This has caused some fear, uncertainty, and doubt (FUD) toward cryptocurrency, and its market cap has dropped as a result.
SUSHI Protocol Usage Struggles
Santiment’s latest insight report has covered the recent dormant movement, capitulation, and $SUSHI whale behavior, among other factors. The report shows that SUSHI’s total value locked (TVL) has dropped by 93% since mid-November 2021, which coincided with the FTX saga period and is now sitting at $581.47 million USD TVL.
While the falling price of crypto assets may affect TVL, it is also likely that people are using less of SUSHI and moving away from it. On the other hand, Uniswap’s TVL has dropped by 63% since mid-November 2021 and is now at $3.71 billion. According to Dappradar, its protocol usage has struggled for the past year.
Looking at the number of unique active wallets (UAW) interacting with a dApp’s smart contracts, there have been occasional spikes. But overall, there has been little real growth as protocol usage, on average, remains pretty low. Meanwhile, on Uniswap, UAW has been increasing for the past year, indicating a healthy protocol.
After examining the SUSHI token movement, the report notes that long-term holders have been exiting their positions. The report shows that there have been notable movements since the start of the year, particularly in terms of Dormant Circulation (365), which shows the number of tokens that haven’t moved for at least 365 days.
Moreover, the recent spike in Dormant Circulation (365) coincides with a drop in SUSHI’s supply on exchanges, suggesting that long-term holders decided to exit their positions. Twitter user Lookonchain identified the fund Goldentree, which had previously invested $5.2 million in SUSHI in October 2022, as one of the investors exiting their position.
Nevertheless, SUSHI’s market cap has been hit hard by the SEC subpoena and the recent movement by long-term holders. It remains to be seen how the cryptocurrency will fare in the coming weeks, but it’s clear that the protocol is facing some tough times.
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