Rival decentralized exchanges are increasing their liquidity mining rewards to attract former
Uniswap liquidity providers, causing SushiSwap’s TVL to triple in a week.
Uniswap loses 57% of its total allocated value with rivals increasing rewardsNOTICS
With Uniswap’s market-leading decentralized exchange having ended its yield farming incentive program, rival automated market makers 1inch, SushiSwap and Bancor are taking on liquidity providers with targeted rewards.
On November 17, the same day Uniswap’s rewards ended, automated and cloned market maker SushiSwap announced a new incentive scheme for the same four pairs previously encouraged by Uniswap.
The total Uniswap allocation (TVL) fell by more than $1 billion in less than 24 hours that day. Since reaching a record US$3.07 billion on 14 November, Uniswap’s TVL has fallen 57.5% to US$1.3 billion.
In contrast, SushiSwap’s TVL has skyrocketed almost 160% since 17 November, from US$407 million to US$1.05 billion. It is now over 313% since a week ago.
SushiSwap was not the only DEX to launch a „vampire“ campaign targeting Uniswap liquidity providers, with Bancor announcing a liquidity mining program including retroactive rewards on November 17.
On November 18, 1inch launched the second phase of its yield farming incentives, allocating an additional 1% of its supply of tokens to liquidity providers. Speaking to Cointelegraph, 1inch’s CEO and co-founder, Sergej Kunz, said:
„At the moment we are seeing many other projects launching incentives after Uniswap has stopped. As we are confident that our Mooniswap protocol has much potential to be unblocked while attracting additional liquidity, we have decided to announce our new liquidity mining programme to seek the liquidity released from Uniswap“.
Automated market makers comprise decentralized, non-owner exchanges that settle trades using the combined liquidity of the users. In addition to offering liquidity providers, many DEXs have sought to attract users by offering yield farming rewards in the form of their native tokens.
The UNI token holder and the streaming platform powered by Audius blockchain presented a governance proposal to Uniswap to re-establish the exchange liquidity mining program with about half the rewards of the previous program on November 17.
The proposal almost passed its first round of voting. However, it must complete two more rounds of voting and secure at least 40 million votes to be implemented. Since the decentralisation of governance on 16 September, Uniswap has been unable to approve any governance proposals.