Decentralized finance (DeFi) is an open ecosystem, in which every protocol is supposed to be able to take advantage of what the others have to offer. At least, this is generally the rule even if it appears lately that the second layer solution Optimism is at the heart of a potential fratricidal struggle between SushiSwap, and UniSwap, following revelations from the CTO of SushiSwap.
Why isn’t SushiSwap on Optimism?
Last March, on the occasion of the release of version 3 of its protocol, the giant Uniswap announced the imminent deployment of its exchange on the second layer solution of Optimism. The latter was finally released in mid-July, with the launch of an alpha version of Optimism.
On the other hand, its direct competitor SushiSwap, although deployed on many second layer solutions, did not seem interested in Optimism – or was it the other way around?
Anyway, on August 11, SushiSwap CTO Joseph Delong posted a thread on Twitter explaining why the decentralized exchange had not been ported to Optimism.
“No offense, but we are not looking forward to deploying [on Optimism]. We’re really disappointed in the non-preferential treatment we’ve received. Feel free to whitelist us, but let’s see what happens first.”
Joseph Delong
Uniswap favored over SushiSwap?
In his thread, Joseph Delong looks back at the unfolding of a surprising story to say the least.
According to him, while the SushiSwap teams were working on porting the exchange to Optimism with a version running on the Kovan testnet, the latter contacted the Optimism teams to plan the deployment.
However, after several exchanges, they realized that their deployment was put in second place, behind that of Uniswap.
“After a long discussion in which we beat around the bush, we finally had to ask the question: ‘Are we going to be treated the same way during the deployment? That’s when the team told us that Uniswap ‘had to come first. That meant we were excluded from the deployment until Uniswap was deployed.”
An aberrant situation, to say the least, coming from a solution that is supposed to be open and decentralized.
Conflict of interest among investors
For Delong, there is no doubt that this decision is actually the consequence of a conflict of interest involving some Uniswap venture capitalists who also invested in Optimism.
According to him, it would seem that the 16z and Paradigm funds have put pressure on Uniswap to be the first protocol deployed on Optimism. Indeed, these 2 investment funds are largely invested in each of these projects. The latter would therefore have preferred to prioritize the protocols that are part of their investment portfolio.
“This is the first time this has happened to us with an a16z and Paradigm project. It’s happened to Sushi before (I’d rather not say, because we’re working with the team now that Uniswap has failed to deliver them).”
Joseph Delong
Unfortunately, it would appear that this kind of behavior is common. Indeed, Andre Cronje, the founder of yEarn Finance, explained that:
“This [this kind of event] happens more often than people realize. DeFi is not really DeFi.”
In parallel, the Ethereum network has just passed a major milestone via the deployment of EIP 1559 during the London hard fork. Since then, thousands of ETH have been destroyed by the new fee mechanism.
