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DeFi DEX SushiSwap OKEx

Realigning SushiSwap’s AMM model to be a revenue-sharing and community-driven network

2021.02.24 OKEx

On Feb. 16, OKEx hosted its eleventh #OKExDeFi Roundtable. OKEx CEO Jay Hao moderated, alongside OKEx Director of Financial Markets Lennix Lai, and welcomed guest Chef Maki, a core contributor of SushiSwap. The trio discussed many topics ranging from the Mirin proposal, Bitcoin, the DeFi space’s scalability, as well what DeFi means to them. 

What follows is an excerpt from the conversation. To watch the full video, click here.


Jay: Today, we’re honored to have two distinguished guests. One is Maki, a core contributor from Sushiswap, and the other is Lennix Lai, the director of financial markets at OKEx. Could you guys give a brief introduction?

Maki: SushiSwap is a community AMM. At the moment, we’re ramping up the development of new products. 

We started off as a fork of the popular Uniswap. We were kind of frustrated by the fact the team was not receptive to any outsider contributions, so we decided to roll with our own solution — which has been very successful, so far. The market has spoken for itself. 

Right now, we’re working on a leverage and margin platform called Bento, and it’s going to be released this month, hopefully, after all the security tests are done. We’re actively working on Miso, which is a launchpad for new projects, and so on. This is the umbrella of products that Sushi is constantly expanding, and we’re looking at other layer-one solutions.

Myself, I’m a very simple core contributor, someone that loves the project and gives myself every day to the project. 

Jay: That’s good. Lennix?

Lennix: I’m Lennix, the director of financial markets at OKEx, and I’ve been here for many years — since day one at OKEx. I’m responsible for product tech and global business development. My background is as a quant trader. I’ve been working in the traditional financial field as a trader in quants and compliance for 10 years.

Jay: Our audience will love that you guys are here to join the session. I heard SushSwap had an incident — Maki could you explain to our audience what transpired?

Maki: When we deployed exotic pairs in the Onsen, we needed to set up a bridge to make sure that the smart contracts could be aware that this pair cannot be traded for ETH but should be traded, for example, for WBTC or XZY assets. What happened is that the developers launched on Sunday without deploying the bridge. What happened is, I think, $150,000 worth of DIG token — which is a new re-basing asset from Badger DAO and is supposed to follow the price of Bitcoin — and there was profit in there meant to buy SUSHI on the open market. Instead, someone who saw the flaw, or saw we didn’t put the bridge in, was basically able to do an ETHDIG pool and get all of their funds. This was resolved after three hours. It’s quite unfortunate — but, at the same time, you know these funds were profit that was meant to buy SUSHI on the market, so no one lost any funds. From now on, there is a new automated process to deploy new pairs on the Onsen to make sure we have all the bridges set up. 

Jay: Okay, glad to hear that it was swiftly resolved. Let’s move on. So, I heard Sushi joined forces with Yearn Finance last December. What does the Yearn and SushiSwap collaboration mean for both teams, as well as DeFi as a whole? Any changes in decision-making and development?

Maki: Sure — we get in a room with a bunch of people that are passionate about the DeFi ecosystem, and we make them collaborate to empower each other and make sure that we can elevate the whole ecosystem. 

Another collaboration, very briefly, is that Cover is now going to enable all of the Yearn pools, moving forward. So, you know, this is the collaboration that you wouldn’t be able to see if we were not part of the same ecosystem. 

Jay: Lennix you care to weigh in on this?

Lennix: I love the fact that SushiSwap is one of the most community-driven decentralized protocol DEXs that we’ve seen, compared to other protocols. That gives us a thought — when it comes to being one of the major CEXs in the world — we love the notion of decentralization, and one of the purposes of our existence is to decentralize ourselves. The matter, from an organizational and product perspective, is that we can gradually decentralize some of the feature components. I just finished a Clubhouse event, and we were just talking about AMM — whether we can execute AMM coupled with a hybrid between AMM and an order book mechanism. This is something worth exploring with the SushiSwap team.

Jay: Very good. I definitely see that this collaboration will bring a bright future ahead. I hope it works out for both parties. What is the future plan for SushiSwap this year?

Maki: The roadmap is available on Medium. One of the most interesting things that we saw people talk about is Mirin, which is our franchise pool model for bridging centralized exchanges with the DeFi world. What is interesting in this part is — let’s take OKEx as an example here — I don’t think a lot of people need to trade on DeFi at this moment. It is not sustainable. It’s clear that some people are priced out with all the fees and gas prices rising, because of usage. The best feeding venue, at the moment, is 100% a centralized exchange, but there is something to understand: Running a decentralized exchange is very cheap, at the moment. The thing is, if you are a liquidity provider in a pool, you don’t need to be awake while doing the trade. You can put the asset there and leave it while earning fees. This kind of arbitrage is going on, at the moment, between the centralized and decentralized world. What is interesting is that we’ve been developing a solution to alleviate impermanent loss that has been very successful so far from testing.


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Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.

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