Decentralized exchanges like Uniswap (UNI) and SushiSwap (SUSHI) proved to be a massive driver for bullish runs in the DeFi sector. SushiSwap, for example, started off as a hard fork to the original Uniswap platform and despite its controversial start, the decentralized exchange is already catching up Uniswap in areas like total value locked (TVL), platform activity, and governance token prices.
First of all, SushiSwap went a step ahead of Uniswap by releasing its SUSHI governance token to community participants, while Uniswap had yet to create and launch its own governance token – UNI.
Source: TheTIE
However, Uniswap released a massive UNI airdrop, which many crypto enthusiasts claimed to be an action to prevent liquidity drainage from Uniswap to its hard fork.
Meanwhile, SushiSwap went to a bumpy start, as the decentralized exchange’s co-creator Chef Nomi allegedly dumped all of his SUSHI tokens for a price of $14 million worth of Ethereum (ETH). However, Chef Nomi later returned all of the ETH back to SushiSwap’s treasury. Chef Nomi’s position was replaced by co-founder “0xMaki” who took over the project and helped SushiSwap remain afloat and become a viable option in the DeFi ecosystem.
SushiSwap’s accusation of lack of decentralization resulted in 80% of all SUSHI tokens being distributed to the community, leaving only 20% for operational costs. In contrast, Uniswap only distributed a total of 65% of all UNI tokens available. This means SushiSwap achieves a greater level of decentralization. Furthermore, SushiSwap is more of a community-controlled project, rather than Uniswap, as the Sushi funding is a mere 9% of all SUSHI tokens, while Uniswap received a total of $12 million in venture capital funding and fundraising incentives.
Uniswap and Sushiswap, however, are leading their projects in a separate direction amid the long-awaited Uniswap v3 launch, which would add a bunch of protocol improvements. The update is still covered in mystery, with a handful of crypto users really aware of what Uniswap would bring with v3.
SushiSwap, on the other hand, keeps its projects truer to the cryptocurrency ethos, with the core team and developers being transparent about future updates. Also, SushiSwap managed to build an effective governance mechanism, which gives community members the right to decide about important topics, related to SushiSwap.
Another thing that separates UniSwap and SushiSwap is that UniSwap established itself as a platform for new projects to be built on, while SushiSwap turned more towards providing liquidity for longer tail assets, aiming to become a place for projects with long-term viability.
Source: Dune Analytics
However, despite the differences, the two projects sit on the number two and number three spots, respectively in terms of total value locked. As of press time, Uniswap is the second-largest decentralized exchange by TVL, with $4,1 billion locked in the project. Sushiswap surpassed Balancer for the third spot with a total of $3,55 billion locked in. Token prices and market capitalization, however, differ largely, with Uniswap again occupying the second spot after Chainlink with a price of $24.98 per UNI token and a market capitalization of $7,532,905,818. SushiSwap’s SUSHI governance token is eleventh, with a price point of $13.84 and a market capitalization of $1,963,848,006, according to data from Defi`s category on CoinMarketCap.