The SushiSwap case : How trust can be restored to Decentralized finance
TLDR : An anonymous developer forked Uniswap to create SushiSwap. Exactly the same except it added a token, and token rewards for liquidity providers and token holders. A week or so later this anonymous dev sold all of “his” SUSHI for $13M in ETH and transferred the keys to the CEO of a centralized exchange who restarted the original plan to bootstrap its own liquidity by draining Uniswap’s. Then successfully migrated, and launched the self governance. This made the anonymous developer come back and return the money he took and come back to the project. All of this inspired dozens of other anonymous devs to do the same now. The issue of trust (or lack thereof) has shown to be the largest problem of the DeFi space. People are dropping massive amounts of money on projects with anonymous founders, driven by unaudited code, large players shorting and dumping the farmed tokens on small investors and the market in general is going crazy. Enter UTU Trust!
What caused the dump?
SushiSwap anonymous founder, Chef Nomi (Twitter @NomiChef), who converted 2.5 million Sushi tokens (around 200,000 ETH) from his holdings and converted them to ETH to be served as liquidity for the newly created exchange and withdrew another 18,000 ETH worth of Sushi tokens, which caused the tokens to drop massively and are still recovering. Most people from the crypto community believed that he did an exit scam. Initially accused him of dumping all his tokens and that left investors with worthless coins and the whole community went berserk. The whole saga is still unfolding but this is not about SUSHI, SASHIMI , YAM, PICKLE or any other snack or vegetable. We are here to talk about the largest problem of the blockchain and DeFi space out there and what we can do about it.
Giving the power to the people
Decentralized projects became popular this year partially because of the coronavirus pandemic, which brought the world to a standstill. Coronavirus lockdown imposed around the globe led economies around the world to collapse, and many countries were printed a lot of fiat currencies to make up for the economic collapse due to the pandemic. “Money printer go brrrrrrr” was used to describe the United States government action to deliberately inflate their currencies in a failed attempt to rescue the economy. A lot of people decided to take matters in their own hands and turned to cryptocurrencies, which are at least beyond the manipulation of the government. Little did they know that under the surface many beasts await and that manipulation is not a stranger in this game (Finding #21) What was touted to be a push against the “evil” CeFi (Centralized Finance), the power of government money became just another playground for people behind the curtains, anonymous at that.
It’s not only anonymous developers, it’s the whole thing. Crypto Twitter influencers, their anonymous alter egos, large farmers, ghost chains trying to resurrect their projects, everyone is trying to play on each other’s greed and are shielded by the cloak of pseudo-anonymity. And it doesn’t look like it’s going away that soon
Is 2017 coming back?
Famous cryptocurrency journalist, Rachel Wolfson (@Rachelwolf00 on Twitter) expressed her displeasure about the Sushiswap drama by Tweeting,
“I only want to hear about Sushi if it involves eating it. Everything else is irrelevant”.
She wrote in another Tweet,
“A lot of this DeFi nonsense reminds me of scammy ICO’s. How are people not realizing this”
The scammy ICO’s Rachel was talking about is the ICO boom of 2017. Many scammers saw an opportunity then because anyone could create a token on the Ethereum blockchain by writing just a few code lines. Ninety percent of companies who launched the ICO projects were dead within 2 years. Some promised gold-backed currencies, some promised to decentralize the power sector, but many failed to deliver. An ICO vowed to develop a hosting solution built on the blockchain to discover that the ICO founder has no idea about how website hosting works. The company has no physical address to execute such a solution. All they had was a stunning whitepaper with pages of empty promises. One part of DeFi is starting to look suspiciously like that, but just like in 2017 people don’t care… there is money to be made.
Can the faith in DeFi projects be restored?
The answer is absolutely YES! We believe that DeFi has so many things to give to society, it is truly the great equalizer, it truly can change the landscape and make things a little bit fair. And we do understand the need for anonymity in this world but we also understand that things don’t need to stay this way. That’s why we are working on a solution for the past 3 years, not only to the problem of trust in the blockchain or DeF but the general lack of trust in any online interaction since the beginning of the internet.
With UTU protocol, and our trust oracles we believe we can change the landscape once and for all and give people what they need. A trust scoring system that will tell you exactly how likely you are to get “rug pulled” by a specific (even anonymous) developer, or how trustworthy is someone’s credit score, online review, loan or anything else that relies on someone’s reputation. We do exactly that, we TOKENIZE someone’s reputation and allow everyone that has ever interacted with her to become their scoring mechanism and be rewarded or penalised for it.
Join us in our mission to restore trust in DeFi and change the way we do things online and in Web3 forever.
About UTU
At UTU we believe in a more human-friendly internet. We are pioneering digital models of decentralized trust built around human beings and how we naturally trust. UTU’s vision is to become the trust infrastructure of the entire internet, replacing anonymous star ratings, reviews, and scores as the de facto trust mechanisms of our digital lives. We do this in service of our Mission — To bridge the gap between how we trust in real life and how we are asked to trust online — to make the internet a safer, more trusted place to gather, share, work, and trade.
UTU is kiswahili for “Humanity.” It reminds us of our home in Kenya and for whom we build this project. We currently have a team of 40 at our HQ in Nairobi and R&D collaborations with the Agents, Interactions, and Complexity Group at the University of Southampton in the UK as well as the newly established UKRI Trusted Autonomous Systems Hub.
UTU and our subsidiaries have been featured variously in international media, including Pitchbook, NPR, TechCrunch, Analytics India, Aithority, Disrupt Africa, How We Made it in Africa, and others. We won the 2019 East Africa Regional Championship of the Pegasus Tech Ventures Startup World Cup and have been named a 2020 Hello Tomorrow Deep Tech Pioneer.
Check us out on the Web, Twitter, and join us on Telegram in decentralizing the future of digital trust.
