SBF

Chapter 23The Fuckup and the Savior

On September 1 2020, Uniswap had $1.5 billion worth of liquidity, quintuple what it had when Cermak had tweeted out the idea. That made it, for the first time, the largest app in DeFi.

This rapid growth was great for Uniswap. Every little bit that its pools grew made it that much better to trade on. Bigger pools had less slippage, which was the equivalent of tighter spreads on centralized exchanges. Less slippage encouraged bigger trades, which brought in more money for liquidity providers, which in turn made more people want to put in liquidity. Which made more people want to trade.

Traders follow liquidity. It was a virtuous cycle.

But the people behind Uniswap knew that most of the people putting this new money into it were doing it mainly to earn sushi emissions for the new exchange that was out there trying to destroy it.

Since more than a billion dollars had come piling into Uniswap ahead of SushiSwap's plan to migrate all that liquidity back out, one would think that Uniswap's bonanza was only a blip, that all that new liquidity would gush back out when Chef Nomi was done with his work and the migration happened, leaving Uniswap on the other side as a distant number two.

That's not quite what happened, though.

Meanwhile, 1000 sushi were coming out per block ahead of the SushiSwap liquidity migration. It was very much like manna from heaven for those in the know enough to be in the right place to collect it.

And as with biblical manna, ...