"I F*cked Up. And I am Sorry:" Chef Nomi Returns $14M of ETH to SushiSwap
Also, interview with 0xMaki, yEarn Finance launches lending protocol
Hello Defiers! Another crazy day in DeFi,
SushiSwap founder Chef Nomi returned the $14M in ETH he had withdrawn
Exclusive interview with SushiSwap co-founder 0xMaki, and his impressions before and after Chef Maki’s change of heart
yEarn Finance launches generalized decenrlized lending protocol
and more :)
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Check out the just-released video on The Defiant’s YouTube channel! The amazing story of SushiSwap. The video was produced in partnership with Robin Schmidt of Harmony Protocol.
So, Was He a Good Guy After All?
There’s yet another twist to this California Roll.
The founder behind the Uniswap fork SushiSwap, an anonymous developer going by the name of Chef Nomi who had run off with about $14M worth of ETH and prompted accusations the project was an exit scam, today returned his stash.
“To everyone. I f*cked up. And I am sorry,” Nomi said in a Twitter thread today. “I was emotional, I was greedy, I was afraid.”
Community Decides Payout
Nomi said the community should decide how much the anonymous dev deserves for founding SushiSwap, and that he will continue to participate in the technical implementation of SushiSwap but won’t have any control or be of the governance process.
Nomi also apologized to early believers in the project and “degen friends,” including 0xMaki, Sushi Ninja, Scott Lewis, Degen Spartan and Andre Cronje, and “most importantly,” Sam Bankman-Fried and others who took control of the protocol, for their “help getting SushiSwap back when (he) almost destroyed it.”
Did the Right Thing
“He did the right thing and should be rewarded by the community accordingly,” 0xMaki told The Defiant, adding that while he expected Nomi would return part of the funds (“only 33/50%, my share”), he didn’t expect he would return all of it.
As with any new twist in this DeFi soap opera, it didn’t take long for conspiracy theories to pop up: he probably went long SUSHI before his tweet, or he only did it because he was doxxed and his family was threatened, crypto Twitter theorized.
Regardless, the SUSHI community was swift to react and Adam Cochran, one of the signers on the SUSHI multisig, proposed to use some of the returned funds to re-buy SUSHI.
Image source: snapshot.page
The end result from this would be to prop up the SUSHI price after it took a 70% hit following Chef Nomi’s dump. Surely it’s with that in mind that so far, over 70% of participants are voting in favor of using 100% of the funds returned to buy back SUSHI(other options are 50%, 75% or none, which has less than 1% of the vote).
But SUSHI is already rebounding, even before the proposal is approved. The token jumped as much as 28% and is now retracing some of those gains. The increase hasn’t made a dent on the post-dump sell-off though.
Image source: CoinGecko
SushiSwap yesterday successfully migrated Uniswap’s liquidity pools into its own protocol and is now the largest decentralized exchange by assets held in its smart contracts, with $1.4B of total value locked, compared with $650M in Uniswap. Uniswao is still leading by trading volume, with the double the value trading hands on the platform, compared with volume on SushiSwap.
0xMaki Had Expected Nomi to Return Part of The Funds
0xMaki felt stupid and betrayed when Chef Nomi took all the money in the SushiSwap developers’ fund, but as the following Sept. 9 interview with The Defiant shows, he was holding on to the belief Nomi would return at least part of the funds. Today he was proven right.
What was the ambition for Sushiswap and how did you originally get involved?
The ambition for SushiSwap and what made me join the project was to create a community-led project where everyone could have a say in the direction of the project no matter the amount of funds you own, who you are, Experience level, background, etc. A project where you could be rewarded by participating and contributing no matter what are your skills or ambitions.
I got involved when I read the medium post and was one of the first 9 persons in the Discord. I started to engage with Chef Nomi and SushiSwap (2nd dev) to dig into what they were trying to accomplish here.. I was fascinated by the vision and their point of view decided to implicate myself from the get go was promoted to "General Manager" of the restaurant almost immediately started to grow it, make connection with DeFi projects to partner on some key features that will be coming up, participated in some intro with Audit firms. Engaged with the community and answered questions !
Were you surprised to see it do as well as it did?
I was blown away never expected it to reach a few millions of TVL so quickly.. first billion was something crazy because we were still unaudited Anons with no reputation (I did reveal my identity to some people so we could have some audits done and engage in more thoughtful conversations)
“I was blown away never expected it to reach a few millions of TVL so quickly.. first billion was something crazy because we were still unaudited Anons with no reputation”
What was your feeling about Chef Nomi, was there any sign that he might be ill-intentioned?
I always had some worries while doing my Due Diligence the fact that there was no-timelock or multisig at first was very off putting... then Nomi announced they were going to implement a 48h timelock so I saw that he wanted to make things right. The wrestling on Twitter to say he wasn't in it for a quick money and all of that.
It was a true hit when I witnessed him draining the funds and basically giving me no communication... He did reach out to me following an ultimatum I posted on Twitter he felt guilty and knew he had made a considerable mistake. I believe truthfully that he made mistakes and perhaps he will return some of the funds. We will only knows when he does. The project is bigger than just Nomi or I so it should be an issue in the end !
“I believe truthfully that he made mistakes and perhaps he will return some of the funds.”
How did you feel once you realized what Nomi had done?
Stupid ? Betrayed ? Devasted ? Lost ? Why would someone that understood what we were fighting give up and do something so dishonest? From what I understood he wasn't poor nor in need of the money.. What happened is that I feel he somehow lost it. He was informed of the bug they found when migrating, didn't want to fix it, saw the honeypot which is lifesaving amount of money, was pressured by a lot of strong voice in the community telling him he was a scammer and opportunistic and just told himself.. F*ck these people I deserve that money for I built... Is it the right thing to do ? No. Did it happen? Yes. Can we recover from it? Hell yeah!
“Stupid ? Betrayed ? Devasted ? Lost ? Why would someone that understood what we were fighting give up and do something so dishonest?”
Do you believe SBF will be able to take the project forward successfully?
SBF will have no implication moving forward he was asked to help us do the migration and multisig transition his role in the project is over. He is welcome to make proposals - vote - engage with the community but as far as I am concerned he won't be involve in the day to day of SushiSwap going forward he was generous enough with his time and put up a very generous grant to build on Serum-Solana. I encourage any devs willing to work on Solana to take it but I will be building for Ethereum first and foremost.
“I encourage any devs willing to work on Solana to take it but I will be building for Ethereum first and foremost.”
What are your thoughts on criticism that the project is now centralized around SBF?
Without Sam we wouldn't have been able to make the migration possible. He understands the power of community, believe that this project could be something with huge potential. He has a massive amount of Sushis, did he do anything special to earn it ? No he put capital at risk.
Maybe we should we had some sort of cap per wallet with something similar to ARCx is doing with a KYF (Know your farmer) where wallets needs a 6 months history of interacting with various dApp to be allowed until a certain cap. But this is a new project, we are walking in the unknown we are learning everyday and I am sure next projects will make sure that defense lines are in place for whales. I believe we can always tweak stuff in the governance to make the impact of large holders a bit more even for everyone, with quadratic voting or something involving BrightID with individual voters.
“I am sure next projects will make sure that defense lines are in place for whales. I believe we can always tweak stuff in the governance to make the impact of large holders a bit more even for everyone.”
What are you hopes for the future of SushiSwap?
Being something more than just a copy-paste of Yam - Uniswap, pushing the ecosystem forward by making other projects more fair for everyone, integrating DeFi dApps, Funky UI's for various usecase without forgetting about our communities in Asia and around the globe, empowering indie dApp devs to buidl on our project and be rewarded by generous grants, funding public goods in particular ETH 2.0 projects - DeFi newcomers. Listen to our community members and showcasing that we have good intentions.
yEarn Unveils StableCredit Loans
yEarn Finance said it’s preparing to release a new decentralized lending protocol and automated market maker.
The product, called StableCredit, is akin to MakerDAO in that borrowers deposit collateral to mint a digital asset, with the difference that any token can be provided as collateral and that a stablecoin called StableCredit USD is minted, instead of DAI.
“Provide any asset and create tokenized credit called StableCredit USD (can also support EUR, JPY, etc),” founder Andre Cronje wrote in a blog post yesterday.
Users deposit assets to mint StableUSD. The amount of StableUSD minted is correlated to the market value of the collateral (as determined by an oracle) and the system utilization, up to a 75% max.
Depending on the utilization, users can mint more or less StableUSD using a forthcoming AMM called ySwap.
All collateral is deposited to liquidity pools composed of 50% collateral and 50% StableUSD. The pools are used to monitor and unlock debt as StableUSD is paid back by a borrower. The AMM is described as being “single-sided,” as it allows users to deposit liquidity for just one token, their collateral.
With the system utilization ratio defining the amount of credit a user can borrow alongside an AMM which automatically sets premiums, StableCredit aims to be a generalized decentralized lending protocol.
yEarn is trying to create similar, generalized platforms for other financial applications, including yVaults for aggregated yield opportunities and yInsure for smart contract protection.
There is currently no front-end available for StableCredit, with the product expected to go live in the coming weeks.
Aavegotchi Showcases GHST Governance Token
Aavegotchi, an NFT x DeFi crossover, released details for a new governance token, giving players the ability to dictate key parameters of the forthcoming digital pet universe.
With Aavegotchi, users purchase Tomogotchi like avatars of different rarities which are leveled up to equip new merchandise and compete in different tournaments. Each Aavegotchi is backed by interest-earning aTokens, meaning all characters earn a yield in real-time.
Over the past two months, Aavegotchi hosted community-centric marketing campaigns, allowing Aavegotchi ‘Aagents’ to level up by completing tasks like inviting friends to the Discord channel and providing feedback on collateral.
Those Aagents are now set to enjoy the fruit of their labor thanks to the forthcoming DAICO offering for GHST tokens.
Using Aragon’s Fundraising Template, all capital collected from the sale will be routed directly to a community-governed DAO, giving the project a liquid treasury from day one. Aavegotchi will set its initial tap at 50,000 DAI, meaning that the community can vote on whether or not the GHST Vault (controlled by the core team at inception) deserves to be funded for future proposals, campaigns and growth opportunities.
Level 6 Aagents
Instead of making GHST available to anyone who KYC’s out of the gate, Aavegotchi will offer 500,000 tokens (valued at $50,000) exclusively to Level 6 Aagents, the highest rank at the time of writing.
“The Aagent ranks have also helped us discern who is most invested in the project at least in terms of time and thought spent.” Aavegotchi founder Jesse Johnson told The Defiant. “This has significantly helped us achieve our fair distribution goals for the GHST token”
This period will be followed by public bonding curve trading, with token price starting at 0.2 DAI (100% above the presale price) and increasing with each purchase that is made.
All things considered, Aavegotchi’s navigation of key principles in the DeFi, NFT and DAO ecosystems comes as a strong testament to the Aave-grant incubated fledgling set to take flight this week.
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About the founder: I’m Camila Russo, author of The Infinite Machine, the first book on the history of Ethereum. I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.