• Di. Jun 15th, 2021

Why SushiSwap (SUSHI) rallied 75% in 1 week


Dez 11, 2020

The price of SUSHI, the native token of SushiSwap decentralized exchange, has rallied 38% in the past 10 days.

At its monthly peak, the governance token had achieved a 75% price increase but the recent 10% pullback in Bitcoin price has weighted on SUSHI’s price action. One of the primary factors underpinning SUSHI’s bullish price action was a strong relief rally in the decentralized finance sector following an extended correction that dominated the month of October.

The most evident catalyst for SUSHI in the past two weeks was its merger with the DeFi giant Yearn.finance.

On Dec. 1, Andre Cronje, the creator of Yearn.finance, announced a merger with SushiSwap. Within the following week, SUSHI price surged by 75% from $1.541 to $2.496.

SUSHI 1-hour price chart (Binance). Source: TradingView.com

How the Yearn.finance merger adds value to SushiSwap

SushiSwap is a decentralized exchange on the Ethereum network. Earlier in the year, it forked away from Uniswap, the largest decentralized exchange by volume. Using the SUSHI governance token, SushiSwap allows token holders to control the protocol and in turn SushiSwap pays a part of the exchange fee to holders.

After surging to as high as $15.97 on Binance, the price of SUSHI abruptly fell below $1 in October after lead developer Chef Nomi unexpectedly sold roughly $12 million worth of SUSHI on the spot market.

As Cointelegraph reported, after a backlash from the community, Chef Nomi returned the funds and passed control of the project to other developers.

Shortly after Chef Nomi decided to return the funds he sold, the project began to rebound. As this occurred, ownership of the project also shifted to FTX CEO Sam Bankman-Fried in September. At the time members of the DeFi community perceived this migration as a hostile takeover but SBF said:

“I didn’t build sushi. I was called in and I’m trying my best to do what’s right for it. But a lot of people seem to have gotten sidetracked fighting against those trying to fix it. And I’m not the only one who feels that way.”

Since then, SushiSwap turned for the better, and eventually, transaction and trading volumes on SushiSwap returned. According to data from CoinMarketCap, SushiSwap processed $51 million in daily volume in the last 24 hours. Considering that the altcoin market took a hit after Bitcoin’s correction, this figure is relatively high.