The Difference of SUSHISwap and KKSwap Economic Model
Among all the challengers of Uniswap, SUSHISwap is undoubtedly the most brilliant one.
In fact, SUSHISwap is not complicated. It just copied Uniswap and made some improvements on the income distribution model to distribute more benefits to liquidity providers.
In short, SUSHISwap issued coins in advance with the help of Uniswap’s flow pool!
Since SUSHISwap was listed on August 27, the lock up amount of SUSHISwap has exceeded $700 million in three days and exceeded $1 billion in five days. It has become the fifth project after AAVE, Maker, Curve, and Uniswap to lock positions to reach $1 billion. The token price also increased step by step with the amount of lock up, achieving a good performance of 10 times in three days.
This result also echoed the question asked by KOL Larry cermak on August 23: if some talented developers (such as @ andrecronjetech) split everything in Uniswap, just change their names and issue tokens, and eventually allocate about 90% of the tokens to LP Uniswap, it would be hard. Liquidity is expected to follow incentives, because many people are driven by interests. I think someone is doing it.
SUSHISwap’s core strengths
In Uniswap, only when liquidity providers actively provide liquidity can they earn transaction fees of the fund pool. Once they withdraw money from the pool, they will no longer receive that passive income, as will the miners who provided liquidity in the early days. As agreements become more and more popular, although they were early liquidity providers, they still face the risk of being diluted by the participation of large funds, exchanges, mining pools and other (larger, richer) stakeholders.
Under the current Uniswap configuration, 0.3% of all transaction costs in any pool will be prorated to the liquidity providers in the pool.
In SUSHISwap, 0.25% goes directly to active liquidity providers, while the remaining 0.05% will exchange SUSHI (apparently through SUSHISwap) to SUSHI token holders.
In short, the services that can be enjoyed on Uniswap remain unchanged in SUSHIwap, but the rewards of liquidity providers become more guaranteed and they can enjoy long-term dividends. It is not surprising that users will run to the latter platform.
SUSHISwap’s token mechanism
SUSHISwap releases 100 SUSHI tokens per block and distributes them equally to all supported token pools. In the first 100000 blocks, SUSHI will produce more than 10 times the number of SUSHI tokens, 1000 SUSHI tokens per block. After 100000 blocks from the start of the agreement (about 2 weeks), SUSHISwap will migrate all liquidity tokens mined on SUSHISwap contracts, which will involve mining Uniswap LP tokens on SUSHISwap.
There are 13 initial fund pools, which are as follows:
Cefi stable currency: USDT-ETH, USDC-ETH
DeFi stable currency: DAI-ETH, sUSD-ETH
Loan agreement: COMP-ETH,LEND-ETH
Synthetic assets: SNX-ETH,UMA-ETH
Oracle: LINK-ETH, BAND-ETH
Ponzi Economics: AMPL-ETH，YFI-ETH
Delicious food (double reward): SUSHI-ETH
It can be seen that SUSHISwap has laid “magnets” in the flow pools of various head projects of the difi track, aiming to attract the main force of Uniswap’s liquidity providers. Under the two consecutive weeks of bonus bombing, the Uniswap liquidity providers will probably “reverse” and transfer to SUSHISwap, so SUSHISwap will get the most powerful weapon — liquidity.
However, it is worth noting that the total amount of SUSHISwap tokens is unlimited. Although compared with the pure governance token of compound, the value of SUSHI token is bound to its business, but this binding is very weak and has certain risks. If the business speed can not keep up with the increase of token issuance speed, the currency price will be maintained.
In addition, 10% of each SUSHI distribution is reserved for development and future iterations, including security audits. This token mechanism is equivalent to that SUSHI team owns 10% of the token (there is no upper limit for the total amount, so there is no upper limit for this part), and there is no lock up. With the excavation of SUSHI, it is released synchronously.
You can roughly measure this number, the top 100, 000 blocks, because the output is 10 times, a total of 100000 * 10 * 100 = 100 million tokens will be released, and the team accounts for 10%, that is, 10 million pieces. This also means that in two weeks, the team will unlock and release 10 million SUSHI. According to the price on September 6 (1.5 US dollars, which has fallen a lot in recent days), it means that there are 15 million US dollars of tokens released.
(team selling token)
To sum up, SUSHI’s token economic model hides many risks behind the boom.
Reformer KKSwap
Compared with SUSHISwap, KKSwap has a lot of restraint in mechanism design.
KKSwap is also a decentralized token exchange protocol based on ETHereum, which is consistent with the concept of SUSHISwap. It aims to iterate and upgrade based on the graceful design of Uniswap, so as to provide users with better trading experience and revenue.
In terms of overall design, KKSwap draws lessons from SUSHISwap’s many playing mETHods, and also adds many innovative mechanisms, mainly including the following aspects:
First of all, the total amount of KKSwap is 200 million, which will never be issued. No matter how much profit KKSwap will generate in the future, it will be locked in and reflected in the limited total amount, which will greatly ensure that the value of the token will not be diluted and its value will increase steadily. This mETHod is extremely friendly to low-cost coin holders in the early stage.
Secondly, 0.25% of SUSHI is allocated to liquidity providers, and 0.05% of SUSHI is repurchased, and then dividends are paid to the holders. KKSwap also charges 0.3% commission fee to traders, 0.2% to liquidity providers, 0.1% to secondary market SUSHI repurchase, 70% of buyback is destroyed, and the remaining 0.03% is used for cash dividends.
In terms of liquidity mining, KKSwap has also introduced multiple pools for mining. The difference is that the token excavated in the early stage is KKSwap’s governance coin (i.e., wksa), and the total amount of wksa is 20 million.
It is worth mentioning that at present, the members of KKSwap DAO are discussing whETHer to reduce the total amount of wksa. There are more than 10 times, 100 times, 1000 times and so on. There are two ways to obtain wksa, one is the liquidity mining mentioned just now, the other is through KSA stacking, and the two mETHods account for half of the wksa excavated.
Through the education of compound, yfi and other projects, the governance currency has been fully recognized by the market. Wksa has the rights and interests of voting and proposal initiation, and can make decisions on the weight of various liquidity mining pools of KKSwap. With the continuous expansion of KKSwap ecology, KKSwap capital and KKSwap media will also use wksa to make decisions on large and small transactions.
In the first 100000 blocks (about 2 weeks), the amount of wksa produced in each block is 5 times that of the following blocks, and 1 / 2 of the total amount of wksa is excavated in about 12 weeks.
After the completion of excavation, KSA will continue to be introduced as mining reward. According to the white paper, about 60% of KSA will be distributed evenly over 60 years as a reward for mobile mining.
Finally, in terms of team holdings, KKSwap reserved 5% of the total amount of tokens, but there was a 12-month lock-in period. The release period was 2 years starting from the 13th month. Such a long release cycle not only shows the team’s determination, but also reduces market pressure and instability factors, which can greatly improve market confidence.
Comprehensive comparison
In the defi world, the effect of every tiny innovation is huge, and we have witnessed it with our own eyes, such as compute for MakerDAO, SUSHISwap for Uniswap, and perhaps KKSwap for SUSHISwap in the future.
Next, KKSwap will open the market to pave the way. In the future, it will carry out meet up, salon and online AMA activities in major cities around the world, and constantly enrich and improve the governance system of KKSwap DAO. Through decentralization, it will release the value of each individual and continue to grow. At present, more than 20 well-known communities have been identified to join KKSwap DAO system is to build, create, govern and share togETHer.
With innovative mETHods and good marketing plan, combined with strong market resources, KKSwap will have great future.
