SushiSwap has seen a big drop in its total value locked (TVL) since its highs in 2021, according to DefiLlama. To tackle this issue, Sushi Labs has acquired Shipyard Software, a company that develops cryptocurrency trading tools. This move was announced on January 28.
The goal of this acquisition is to solve common challenges that decentralized exchanges (DEXs) like SushiSwap face. These challenges include reducing impermanent loss, optimizing liquidity provisioning, and improving trading efficiency across multiple blockchains.
SushiSwap is working hard to regain its footing after a long decline in TVL. It’s also facing stiff competition from DEXs on Solana and newer platforms like Hyperliquid, which focuses on trading.
Shipyard offers products like Blade, an automated market maker (AMM) that uses a request for quote (RFQ) system to help avoid impermanent loss. They also have Kubo, a tool designed to attract liquidity into decentralized perpetual futures exchanges. Sushi plans to roll out Kubo as a new Sushi-branded perpetual product. Just to clarify, impermanent loss happens when liquidity providers lose value due to changing cryptocurrency prices in liquidity pools.
Sushi Labs is the team behind SushiSwap, a well-known DEX that operates on over 35 blockchain networks. It currently holds about $230 million in TVL, as reported by DefiLlama. Launched in 2020, SushiSwap was once one of the most popular DEXs, peaking at over $8 billion in TVL in 2021. Unfortunately, internal issues, exploits, and legal challenges led to a significant drop in its usage.
Right now, SushiSwap ranks 13th among DEXs by TVL. It trails behind leaders like Uniswap and Raydium, which have TVLs of around $5.6 billion and $2.7 billion, respectively, according to DefiLlama.
In the world of decentralized finance (DeFi), total value locked is climbing back to levels we haven’t seen since 2021. Data from DefiLlama shows that this increase is driven by the rise of liquid restaking tokens (LRTs) and the growth of Bitcoin-native layer-2 networks. Additionally, rising cryptocurrency prices due to the anticipated 2024 bull market have also contributed to this increase.
As of January 28, the total DeFi TVL is over $119 billion. That’s more than a 100% increase year-over-year, according to DefiLlama. However, it’s still shy of the 2021 peak of $170 billion.