SushiSwap (SUSHI), a fork of Uniswap created by the controversial developer “Chef Nomi,” has been handed over to FTX CEO Sam Bankman-Fried on Sep. 6 in an unexpected takeover. The decision happened after SUSHI fell from $9.5 to $1.13 in just five days.
SUSHI 4-hour price chart. Source: TradingView.com
Creator controversially sold around $13m of dev funds, causing a market crash
The handover of the project to the reputable SBF comes after Nomi reportedly withdrew 20,039 ETH and 2,558,644 SUSHI from the dev fund. The capital in the dev fund was supposed to be used to finance the development of the project.
Spencer Noon, the head of DTCC Capital, was one of the first to spot Chef Nomi’s sell-off of SUSHI tokens. He wrote:
“Anonymous founder of SushiSwap sells all of his Sushi. WHO COULD HAVE POSSIBLY PREDICTED THIS?!”
Acknowledging the outrage from the community, Chef Nomi said he did not “exit scam.” He claimed he deserved the dev fund as he created the project.
“People asked if I exited scam. I did not. I am still here. I will continue to participate in the discussion. I will help with the technical part. I will help ensure we have a successful migration,” he said.
But prominent developers from the decentralized finance (DeFi) space were not convinced. Yearn.finance developer Andre Cronje, who has been praised for the transparent and decentralized launch of YFI, asked:
“What do you mean "without me"? Are you leaving the project? If so, are you giving the dev funds back? All you did so far was hand over a token that was built off of Uniswap Protocol. Weren't the funds meant to further develop? Aren't you that developer?”
As SUSHI continued to plunge, SBF took over the protocol, to which the community reacted positively. SBF said the keys of SUSHI would be transferred to a multi-sig, which would then become decentralized.
SBF also criticized the actions of Chef Nomi but said that if Nomi does not step down, Sushi could collapse. He summarized the entire debacle as:
“a) Nomi sucks and hurt the community
b) Sushi shows promise as a dynamic AMM built by the community
c) If Nomi doesn't step down, it's over for Sushi.
d) If Sushi adds a division on Serum, we'll give 5mm SUSHI to farmers
e) Either way, AMMs coming to Serum.”
Industry reacts
Before the Sushi “acquisition” by FTX and SBF, SUSHI was en route to possibly zero. It had dropped 88% in five days with no clarity in the future of the project.
Industry executives and analysts remain generally positive about the takeover. Arthur Hayes, the CEO of BitMEX, said:
“Please save me from a bad $SUSHI investment SBF. He is our new master chef.”
Su Zhu, the CEO of Three Arrows Capital, suggested he is in support of the takeover.
“Love it, and ETH def needed this at 320,” commented Zhu.