SushiSwap is trying to reverse its declining market share by enabling cross-chain swaps across seven major chains.
Yet the protocol’s launch of its new XSwap feature on July 21 was clouded by its claim that it’s the “first ever” automated market maker (AMM) exchange enabling cross-chain swaps.
Some users on social media immediately challenged SushiSwap’s assertion.
A community moderator at multi-chain exchange THORChain, told The Defiant that THORChain entered into a guarded launch supporting swaps between the Bitcoin, Ethereum, Litecoin, Bitcoin Cash, and Binance Chain networks in April 2021.
THORChain user, unchained.eth, said, “I only see ETH clones on their ‘first ever cross-chain AMM’… THORChain can support almost any chain, not just EVM-based.” SushiSwap members did not respond to requests for comment made through its social media channels.
AMMs are the underlying protocols powering decentralized exchanges by allowing assets to be traded against a liquidity pool rather than using a traditional order book of buyers and sellers.
XSwap allows traders to swap assets across Sushi’s deployments on Ethereum, Fantom, Binance Chain, Polygon, Avalanche, Arbitrum, and Optimism. Sushi said the feature will support additional chains in the future, and the protocol is live on 14 different chains.
The new feature is based on the Stargate cross-chain liquidity protocol from Layer0, a web3 development team. The protocol allows Sushi to find the cheapest routing for transactions across its supported chains.
Sushi has a total value locked (TVL) of $919M, and ranks as the fifth-largest decentralized exchange by cross-chain TVL, according to DeFi Llama. By contrast, leading DEXes Curve and Uniswap command $6B and $5.8B respectively.
On Twitter, commenters highlighted that the OmniBTC team launched its own Stargate-based cross-chain swap functionality on July 19. Gguoss of Bitcoin Layer 2 network, ChainX, tweeted “you should call second, maybe OmniBTC is the first.”
Sushi launched with a bang in August 2020, briefly overtaking Uniswap and amassing a TVL of more than $1.5B in early September thanks to a liquidity mining vampire attack designed to siphon liquidity away from the pioneering AMM.
However, nearly three-quarters of its TVL had evaporated by the start of October after its pseudonymous founder attempted a rug-pull targeting the protocol.
SushiSwap bounced back in early 2021 with a new development team, positioning itself as a fully decentralized alternative to the Andressen Horowitz and Paradigm-backed Uniswap. It heavily promoted its Trident upgrade in July.
But SushiSwap lost market share to rivals such as stablecoin-focused DEX, Curve, and Uniswap v3 as the year went on.
A leadership crisis further set Sushi back in late 2021. In November, a former contributor going by the Twitter handle AGdyor claimed the project was predominantly governed by the whim of five core devs, asserting it was “no longer a community-driven project.”
The following month, Joseph Delong, the project’s CTO, jumped ship in December citing internal “chaos.” Star Sushiswap developer, 0xMaki, also dashed hopes he may return to the project that same month.