Uniswap fork SushiSwap has had a tumultuous weekend after its anonymous founder “Chef Nomi” sold a big quantity of their SUSHI tokens for ETH. In the trade, Chef Nomi received around 37,400 ETH, which was worth about $13 million at the time of writing.
SushiSwap is a fork of popular decentralized token swap service Uniswap which wants to reward liquidity providers with tokens in addition to the standard liquidity provider fees. SushiSwap actually uses Uniswap to generate liquidity for SUSHI tokens, and aims to migrate that liquidity to the SushiSwap protocol itself later on. Right now, there’s $119 million in liquidity for the SUSHI-ETH pair on Uniswap.
However, things went south quickly on Saturday when Chef Nomi’s sudden sale of SUSHI tokens resulted in chaos within the SushiSwap community. The token’s price tanked from a local peak of $4.88 to a local bottom of $1.24 in a little more than 24 hours – admittedly, the crypto market at large was also performing poorly at the time.
Many community members dubbed this move an “exit scam” and predicted it would lead to the end of SushiSwap. Several theories emerged about who is behind the Chef Nomi pseudonym, presumably to intimidate the anonymous founder of SushiSwap.
After he sold sushiswap tokens, Chef Nomi justified his action in some tweets, and even said the reason behind it was “care about the community”.
Regardless of what Chef Nomi’s actual intentions could be, it seems almost unlikely to frame the sale in a positive light. Chef Nomi seems to have recognized that their reputation was damaged beyond repair, and gave up control of SushiSwap to FTX CEO Sam Bankman-Fried.
Bankman-Fried said he wants to make sure the SushiSwap migration goes smoothly and transfer control of the project to a multisig wallet.
However, the FTX CEO also did not mince his words when talking about Chef Nomi, and said they did “huge damage” to SushiSwap and DeFi at large.
After Chef Nomi relinquished their control over SushiSwap, the price of the SUSHI token has recovered to about $2.8, more than a 100% increase. But it remains to be seen if the project can fully recover after all the chaos caused by Chef Nomi’s big sell.