I will admit that ever since the “Chef Nomi” incident happened, I saw SUSHI as a Uniswap copycat and didn’t really think it had much of a use-case. I have recently changed my stance on this completely.
One day I was comparing the market-cap of SUSHI and UNI and saw that the current market cap of Uniswap was around 17B (Circulating), and SushiSwap was around 2.5B (Circulating). I’ve used Uniswap and SushiSwap before and SushiSwap always had at least half the liquidity or volume of the pairs I would trade, and sometimes even more. So it got me wondering and asking myself, “if Sushi is as half as good or used as Uni is, then why is it only worth 1/6 in circulating market cap / value?” So I started digging.
Let’s start off by comparing the two in some commonly used metrics.
P.S. There is a side-by-side table of all these comparisons posted at the end of this article done by “Darrenlautf” (his twitter @ name) who is also a member of The Spartan Group.
We can see the P/S ratio for SushiSwap is 7.91x and Uniswap is 25.22x. This represents a 3x better Price to Sales ratio for sushi than it does for uni. Okay so at least by this metric we see that Sushi is a better buy in terms of value-accrual. Let’s check Volume/Market Cap ratio below:
We find Sushi trades 25.46% in volume of the Sushi token relative to its market cap, while Uni trades 7.16% in volume of the Uni token relative to it’s market cap. Since Sushi has a higher volume/market cap ratio, what would the market cap of Sushi have to be in order for its ratio to go down as low as Uni? It would need a 355% increase in market cap. This would put it at about an 8.5B market cap from this metric alone. And wow, would you look at that! 8.5B is half the market cap of Uni! But let’s continue. Let’s check TVL (Total Value Locked) below.
Wait, so you’re telling me that Sushi has about 86% of the TVL that Uni has, but is only 1/6 the market cap? Wow, TVL must really be a meme. Should we write that one off? You can clearly see they are neck and neck in terms of liquidity locked within these protocols. But okay, let’s give Uni some slack. We all know they were the first horse in the race, so by definition they were born in first place. So here, let’s look at the GMV (Gross Merchandise Volume) or the total volume traded on these platforms.
Sushi has a GMV of 14.6B 30d-average while Uni has a GMV of 31.4B 30d-average. This equates to Sushi having roughly 46.5% of all the volume that Uni does. Hey look, I was right! Sushi does have half the volume! But for some reason, the market only sees it to be 17% as valuable. Alright, last metric. Let’s look at Revenue.
Are you even surprised at this point? My dear Watson, I think we’re on to something, I’m seeing a trend! Sushi has 43.8M in Revenue while Uni has 94.2M in revenue. This puts Sushi at having (once again) around 46.5% of revenue that Uni has. It’s almost boring at this point isn’t it? Well sushi holders get 0.05% of all trading volume in terms of revenue given back to them. That’s basically like owning a centralized exchange. Coinbase charges around 0.04%–0.50%, while Binance charges a flat fee of 0.1%. Except with Sushi that profit is yours, not theirs. Oh and guess how much revenue goes back to Uni holders? 0. That’s right, zero.
I realize the price of Uni may be propped up currently in anticipation of Uni v3, so that may be a factor in the discrepancy between valuations so keep that in mind. But while we are talking speculation, one thing that is upcoming that is 100% certain to make Sushi look ever the more shiny is KASHI (Lending/Borrowing Platform), BentoBox (Vaults, Strategies, Flash Loans), and MISO (SushiSwap LaunchPad). KASHI is due to launch in the next few days and something is telling me in the same way I overlooked Sushi because of the Chef Nomi saga, other people are too.
I know i’m probably boring you with basic comparison metrics, but I wanted to keep my very first post simple and to the point. I plan on making a follow-up post detailing the benefits and market effect that KASHI/BentoBox/MISO may have as well. Have a great day everyone and I hope you really enjoyed this post :) Cheers!