DeFi has grown quite significantly since its inception. This relatively new system was introduced to fundamentally change the global financial economy, offering users a wide range of high-tech-related products and services.
With billions of dollars pouring into space every day, the opaque, tightly controlled, and traditional system has slowly lost its exclusivity for technology enthusiasts.
After finding certain niches, decentralized exchanges have started to go their own way. Uniswap and SushiSwap, two of the biggest names in DeFi, have gone in different directions. For example, Uniswap has started to focus mainly on spot trading on Ethereum and L2.
On the other hand, SushiSwap has oriented itself more towards other differentiated DeFi products. In fact, their user base has become even leaner and more differentiated.
Around the time of the Flash crash in May of this year, DeFi usage collapsed. Usually this is when the difference becomes even clearer and more striking.
During the above period, sushi swap’s weekly volume decreased 85% while that of Uniswap only decreased 68%, suggesting the underperformance of sushi.
Source: Dune Analytics
In the same period from May to July, however, the number of users and transactions only declined by one to two digits. A high number of transactions generally does not result in trading volume, which implies that sushi users are yield farming and continuously selling the tokens they earn instead of trading.
Hence, it would not be wrong to claim that Sushi ‘s user base is mostly DeFi subscribers and a relatively small retail user base.
Source: Dune Analytics
Interestingly, during the subsequent recovery period, the volume of sushi rose almost 170% from the local low, while that of Uniswap rose by only 97%.
Combined with the average trade size per user and individual weekly traders, it can be concluded that SusipSwap has outperformed Uniswap in the past few months.
Average transaction size per user of SusipSwap and Uniswap.
The only weekly dealer of SusipSwap and Uniswap.
Additional DeFi products offer new ways to interact with Sushi’s platform, and that clearly gives it an edge over Uniswap. All in all, they were able to generate more income and increase the number of new participants in the ecosystem.
There are two main elements: the Bit DAO sale – which generated over $ 250 million in volume on the platform – and the cross-selling of products from Shoyu – Sushi’s original NFT platform.
Simply put, cross-selling invites customers to buy related / complementary items. As a result, Sushiswap was able to increase sales organically without incurring additional, unwanted costs.
Despite the differences in the user and product base, the prices of SUSHI and UNI are both fairly correlated, making ups and downs together. In fact, they pretty much mirror each other’s movements on the price chart.
Even if there have been different operational paths so far, it will still take time for both ecosystems to mature and develop independently of one another.
Source: TradingView
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