The liquidity mining fire has swept DeFi, and now it has burned to Uniswap.
On August 23, a well-known KOL in the cryptocurrency circle Larry Cermak asked: If some talented developers (people like @AndreCronjeTech) fork everything in Uniswap, just change the name and issue tokens, it will end up about 90% The allocation of tokens to LP, Uniswap is estimated to be uncomfortable. Liquidity is estimated to follow incentives, because many people are profit-driven. It is estimated that someone is doing this.
As predicted by Larry Cermak, on August 27, a new “Uniswap + Liquidity Mining” project SushiSwap was launched. It not only stimulated investors to provide funds to Uniswap’s capital pool, but also attracted a large amount of Uniswap liquidity to SushiSwap. Driven by this, Uniswap’s locked-up capital exceeded 1.4 billion U.S. dollars, and Uniswap’s trading volume exceeded Coinbase. Among them, SushiSwap’s locked-up capital exceeded 1 billion U.S. dollars in just 4 days.
This time, Hardcore interpreted SushiSwap and introduced how to participate in Sushi liquidity mining.
SushiSwap protocol design
Provide incentives for liquidity fund providers
A question that many people may naturally think of is: “Why would anyone provide liquidity for SushiSwap instead of Uniswap?”
With Uniswap, liquidity providers only earn transaction fees from the pool of funds when they provide liquidity. Once they withdraw their funds from the fund pool, they will no longer receive the corresponding income. In addition, as the agreement becomes more and more popular, venture capital funds, exchanges, mining pools and other (larger and richer) capitalists join the agreement one after another, and the income of early liquidity providers will be diluted.
With SushiSwap, you can provide liquidity to the fund pool and get rewards in the form of SUSHI tokens. But unlike Uniswap, even if you decide to no longer provide liquidity, those SUSHI tokens will also entitle you to continue to earn a portion of the transaction fees of the SUSHI agreement. As an early liquidity provider who helps improve liquidity, you will become an important stakeholder in the agreement.
The income you get from the mortgage will be proportional to the number of LP tokens you invested and the total number of LP tokens. Unless you continue to provide liquidity, your holdings and corresponding reward income will gradually be diluted.
Token distribution
Many people are existing liquidity providers in the Uniswap fund pool. Therefore, SushiSwap has designed a token distribution mechanism to make it as easy as possible for existing Uniswap liquidity providers to start migrating to SushiSwap.
Anyone who wants to provide liquidity for SushiSwap and obtain SUSHI tokens, anyone who holds Uniswap LP tokens can put these LP tokens in the corresponding initial fund pool list. SushiSwap starts to reward at block height 10750000 . A list of qualified LP tokens can be added according to the management on the chain. Everyone can make a decision.
Each block will generate 100 SUSHI tokens. These tokens will be evenly distributed to each mortgagee supporting the fund pool.
Note that for the first 100,000 blocks (approximately 2 weeks), the number of SUSHI tokens generated will be 10 times that in the future, which means that 1,000 SUSHI tokens will be generated in each block. This is to inspire early farmers and participants, and to provide assistance to The Liquidity Migration.
Initial fund pool:
CeFi stablecoin: USDT-ETH, USDC-ETH
DeFi stablecoin: DAI-ETH, sUSD- ETH
Loan Agreement: COMP-ETH, LEND-ETH
Synthetic assets: SNX-ETH, UMA-ETH
Oracles: LINK-ETH, BAND-ETH
Ponzi Economics: AMPL-ETH, YFI-ETH
Delicious food (2 times reward): SUSHI-ETH
The SUSHI/WETH fund pool gets twice the reward , so please put your SUSHI in Uniswap to qualify for additional rewards. After SUSHI is enabled, the community can vote to add more fund pools or change the SUSHI weight of the fund pool.
Reward distribution
Using the current Uniswap configuration, 0.3% of all transaction fees in any fund pool will be proportionally distributed to the liquidity providers of the pool. In SushiSwap, 0.25% goes directly to active liquidity providers, while the remaining 0.05% is directly converted back to SUSHI (obviously through SushiSwap) and distributed to SUSHI token holders.
Ensuring project sustainability (development funding)
To ensure the long-term feasibility and sustainability of the project. According to LawMaster’s recommendations, 10% of each SUSHI distribution is left for development and future iterations, including security audits.
The Liquidity Migration
After the first 100,000 blocks (approximately 2 weeks), SushiSwap will migrate all liquid tokens pledged on the SushiSwap contract. This migration will involve acquiring all Uniswap LP tokens pledged on SushiSwap, redeeming the original tokens on Uniswap, and placing them on the SushiSwap liquidity pool. These new SushiSwap fund pools will be almost the same as the standard Uniswap fund pool, and their new function is to distribute the transaction fees generated on SushiSwap to SUSHI token holders.
After the migration is completed, the converted liquidity will provide fuel for the first batch of SushiSwap capital pools and will make the agreement effective immediately. The mortgager does not need to do anything and can continue to provide liquidity to obtain SUSHI token rewards.
The community is voting to add more liquidity pools.
SushiSwap promotion
At the protocol and smart contract level, SushiSwap and Uniswap share the same interface. This means that if your protocol is currently compatible with Uniswap, integration with SushiSwap should be simple. The SushiSwap team will integrate SushiSwap with various DeFi and other ecosystem tools.
security audit
Safety is very important. SushiSwap invited Trails of Bits, PeckShield, OpenZeppelin, Consensys, Certik and Quantstamp to audit the contract. The audit fee is 5ETH.
SushiSwap smart contract address https://github.com/sushiswap/sushiswap
MasterChef’s agricultural contract has not been audited and is still in beta, please do so at your own risk.
SushiSwap smart contract description
Some of SushiSwap’s smart contract code comes from other projects, including Uniswap/Yam/Compound/OpenZeppelin, and is licensed by it.
The following is a brief description of the contract list:
SushiToken: Token contract with COMP / YAM voting function.
MasterChef: Deposit LP tokens for SUSHI farm.
SushiMaker: Collect transaction fees, convert to SUSHI, and then send to SushiBar.
SushiBar: mortgage SUSHI to get more SUSHI.
Migrator: Migrate MasterChef LP from Uniswap to SushiSwap.
GovernorAlpha + Timelock: The governance function from Compound.
UniswapV2: UniswapV2 contract, with minor modifications to migrate the contract.
Sushi mining tutorial
1. Log in to https://app.sushiswap.org (Note: SushiSwap borrowed most of the UI code from Yam).
2. Click unlock wallet to connect to the wallet (metamask, etc.)
3. Click on the menu to enter, take Sushi-ETH Uni-V2 LP token as an example (other Uni-V2 LP token operations are the same as Sushi-ETH Uni-V2 LP)
4. Choose to enter, approve the deposit into the MasterChef contract, and complete.
5. If you don’t have Sushi-ETH Uni-V2 LP tokens, you need to provide Sushi/ETH to the Uniswap Sushi-ETH fund pool/
6. Enter Uniswap and select Swap
7. Buy Sushi, Sushi contract address: 0x6b3595068778dd592e39a122f4f5a5cf09c90fe2
8. Now that you have Sushi, you can add liquidity to the Sushi-ETH fund pool. Select Pool in Uniswap, click Add Liquity
Add Sushi-ETH liquidity according to the current ratio, and you will get Sushi-ETH Uni-V2 LP tokens after confirmation.
9. Go back to steps 3 and 4 to mortgage Sushi-ETH Uni-V2 LP tokens.
Now you are a Sushi farmer, waiting for the income.