SushiSwap is eating into Uniswap’s market share following Yearn merger

Following its merger into the Yearn ecosystem, SushiSwap has been making significant inroads into the market share of leading decentralized exchange Uniswap.

On Jan. 29, Messari researcher Mira Christanto tweeted data illustrating that Uniswap’s share of the Automated Market Maker sector has declined as Sushi’s share expanded from mid-December until last week.

Christanto asserts the Yearn merger has given Sushi a newfound legitimacy, allowing the project to move past criticism of the project that launched in August as a clone of Uniswap and secured TVL early on via a so-called “vampire” liquidity attack.

In November, Sushi attracted further liquidity away from Uniswap by introducing yield farming rewards for pairings that had been previously incentivized by the leading DEX.

Christanto states Sushiswap “has put their past behind,” with the platform now consistently driving between $2 billion and $2.5 billion in liquidity and weekly volume. The analyst noted that Sushi has no venture capital backing, is community-driven, and “innovates quickly,” concluding:

"SushiSwap is evolving from being an exchange to include lending, franchised liquidity pools, cross-chain integrations and a launchpad. Under #Yearn 's ecosystem, it'll benefit from new network effects.”

Despite SushiSwap’s apparent success in attracting liquidity providers from its main rival, Uniswap remains very popular and the DEX accountsg for more than 60% of all unique addresses that have ever interacted with DeFi.

While Sushi’s $2.07 billion TVL equates to nearly two-thirds of Uniswap’s $3.18 billion, Sushi’s total cumulative user base is equal to only 8% of Uniswap’s. However, Uniswap’s first iteration launched in November 2018, meaning the platform had accrued a total user base of 225,000 before Sushi’s launch.