Uniswap Users Rush Back to Sushiswap After Uni Rewards End

Nivesh Rustgi

Nov. 17, 2020

Uniswap’s liquidity plummets after an end to UNI rewards for liquidity miners.

$165 Million Bitcoin Moved to Ethereum after Uniswap’s UNI Token Launch

Key Takeaways

Uniswap’s liquidity dips by 45% following the end of liquidity mining rewards.
On the other hand, the liquidity of Sushiswap surged over 60%, suggesting a migration of liquidity providers.

Sushiswap is eating from Uniswap’s lunch once again. Liquidity providers (LPs) from Uniswap jumped ship after UNI liquidity mining rewards ended and are moving to Sushiswap for SUSHI rewards.

Unpacking Uniswap Farming Incentives

Since the launch of UNI liquidity mining, four pairs on Uniswap—DAI-ETH, USDT-ETH, USDC-ETH, and WBTC-ETH—had two income sources: the fees from the AMM desk and UNI token rewards.

These UNI incentives have just ended, and the LPs are now exiting the platform en masse. Uniswap’s liquidity has since declined from $3.2 billion to $1.82 billion, a 40% drop in a week.

Sushiswap’s governance was quick to grab the opportunity, announcing liquidity mining rewards for the same four pools on Nov. 16, one day before Uniswap’s expiry.

Sushiswap just started incentivizing the exact same pools as Uniswap on the day Uniswap's subsidy ends 🍿 https://t.co/rpcrwIdtHw

— Hasu⚡️🤖 (@hasufl) November 16, 2020

The total liquidity on Sushiswap has surged over $250 million in the last two days.

This is reminiscent of the Sushiswap vampire attack earlier this year, which prompted UNI’s launch in the first place.

While Uniswap’s community deliberates on the future distribution of UNI tokens, two developers have proposed continued liquidity mining on the previous pools for an additional two months to “maintain status quo.”

The preliminary vote on the proposal is split 53% in favor and 46% against.

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