Proposing suSHIBAncor - A Bancor/Sushi Merger

Proposals
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Update#1: There is an official proposal in the Bancor’s Snapshot for considering such a merger Snapshot

Bancor :heart: Sushi
Shiba means flower in heaven

TL;DR

  • SUSHI changed the world. The vampire attack that created SUSHI as a community (not VCs masquerading as community :face_with_monocle:) led project was brilliant and SUSHI went on to earn its place in the wider DeFi Ecosystem
  • SUSHI has been without a clear direction for a while
  • SUSHI LPs have lost an ENORMOUS amount of value to impermanent loss
  • I personally :heart: Joseph Delong, but I can confirm that I googled for at least 6 minutes and Bancor does have more cool-tempered and calm leadership
  • Time to be honest, Bancor invented the AMM. Sushi invented the vampire attack, let them merge and offer first class AMM protection to all liquidity providers

High Level

At time of writing, there is currently about 3 Billion USD worth of liquidity in Sushi - down 30% in the last month alone.

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However, leadership is admittedly in shambles, the team may be a slight bit spread too thin (28 deployments if I am counting correctly) despite a large number of food-themed products.

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However, if there was an option where LITERALLY ALL STAKEHOLDERS WIN, I would consider it. Read on sers…

The Real Merge

Bancor recently hosted a crazy party in Miami.

In fairness, they had reason to celebrate following their announcement of the upcoming Bancor 3.

It’s an LP’s wet dream.

Now here is where it gets interesting. I was reading their upcoming features, and it occurred to me that Bancor and Sushi can merge….hear me out……everyone wins……even SHIBA.

Who Wins?

Traders:

Capital Efficiency ≠ Leverage (sorry Uniswap V3). A recent study showed 50% (!) of LPs are losing money in Uni V3 vs simply HODLing their tokens. That ain’t gonna last long.

Capital Efficiency is taking separate massive pools of liquidity, and connecting them into one giant Omnipool, which is coming in Bancor V3

This is clearly the best outcome for traders.

Liquidity Providers:

SUSHI LPs really HAD two choices.

Choice 1: Stake in a pool with large LM rewards (WGMI)

Choice 2: Stake in a pool and lose a bunch of money to impermanent loss (NGMI)

Now, post suSHIBAncor, they will have 2 new choices.

Choice 1: Stake in a pool with large LM rewards and impermanent loss protection (WGMI+)

Choice 2: Stake in a pool with impermanent loss protection (WGMI)

As you can see, SUSHI LPs will effectively make it, regardless of their choices post merger. Instead of having a 50% chance to make it, they will have a 100% chance to make it.

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If Bancor’s upcoming V3 will have limitless pools. This means that not only can 3 billion dollars of assets be migrated over without issue, they would all be single-sided stakes.

I’ll spell it out. If a token is staked single-sided, and has full IL protection, the LP tokens can only rise when denominated in the staked token. Seems like excellent collateral to do all the degen shit I (we) love.

Now when I model out Bancor LP tokens in Python you see the chart below:

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SUSHI Core Team:

These guys are clearly working in a rough environment. We will first approve their 200,000 SUSHI bonus. If they are still interested in working, I’m sure Bancor can always use new solidity devs. If not, I’m sure we will be seeing some forks on BSC and Huobi chain.

Exhibit A:

Exhibit B:

Token Holders:

Now at the risk of offending people, I still don’t understand why the pools have ETH and TKN without SUSHI or xSUSHI. My grandfather told me that each DeFi protocol was only allowed 1 token that doesn’t really have utility. Sushi has broken this age old rule.

I have already coded the token merge script that will take the following actions:

  1. Lowercase the first two letter of SUSHI
  2. Lowercase the last four letter of BANCOR
  3. Combine them to suSHIBAncor
  4. Statistically speaking, all things SHIBA will moon

A future proposal can deal with xSUSHI, because for the life of me I don’t understand why it’s needed. And if we are being really honest, you don’t either.

Summary:

If traders, LPs, Hodlers and the team are all better off, I can think of no reason this should not pass.

Vote For: Bancor and SUSHI to live happily ever after as suSHIBAncor

Vote Against: Keep SUSHI’s tinder profile active ad swipe right/left as DeFi founders make their move

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Can someone add a poll please? Thanks!

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Inserting Poll

  • Let’s go SHIBA !
  • No go

0 voters

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i like this suggest doo doo doo

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Thank you for detailed proposal.

However, I am not sure how two projects can be aligned, especially decision making process.

I don’t see what Bancor would want to gain from such merger.

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Honestly, I love this idea of merging Bancor and Sushi. Though Sushi made a way to community owned significant DEXes, Bancor has great leadership team and being around since 2017. Sushi can leverage their leadership team while Bancor can leverage the liquidity that Sushi has. Without a good leadership, it would be hard for Sushi to accrue value for token holders. I believe this merge will be the biggest merger in the era of DeFi.

Can we have someone from the Bancor team make a clear proposal on this?

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Thanks for the poll!

Looks like an official proposal has gone up on Bancor’s snapshot for the DAO to vote and consider such a merger:

https://snapshot.org/#/bancornetwork.eth/proposal/0xe18596e112e55eafe1c41b0546e62f173a2575cc3287d55f087e6fe3af6356fb

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@suSHIBAncor thanks for thinking about the potential of synergy between Sushi and other protocols.

I believe M&A is the future in DeFi - and yet to explode.

Sushi and Bancor could be the right pair, but at what price? Mergers must be thought about for more than product compatibility, but as well as for the team, and culture overlap.

I am concerned by your emphasis on the name - suSHIBAncor. It seems as if it is a marketing grab focused on the Shiba popularity, more so than an actual merger and improved product.

Quick question - what is your involvement at Bancor? Is this passion for a merger shared by the Bancor team?

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Hey.

My name is Mark, I am the Head of Research at Bancor. I suspect my position would be more or less aligned with the other core contributors, but I can’t speak on their behalf.

First, it is not clear to me if this proposal is intended as satire or not. I have been following the reorganization of Sushi’s leadership, including the recent drama, with great interest. From the outsider’s perspective, I think the Sushi community has shown remarkable resilience and commitment to the project they love, and believe in. The project’s followers are such a valuable asset on their own that the outcome re: Sushi’s executive branch is probably a red herring. There may be many proposals like this one, and I think the Sushi community should be careful about what they are potentially parting with, and whether the “merged” project has their best interests at heart.

With this in mind, I should point out that the proposal doesn’t contain any details whatsoever about what the merger would look like (unsurprising, if the intent was more entertainment, less governance). Until there is something substantive, there is little to discuss; something of this magnitude requires attention to detail, and the minutiae of it could be the difference between a fair restructuring, or one or both projects feeling like they are having the proverbial rug being pulled from beneath them.

What I will say in support of the concept (again - without a detailed description, there is little else to opine on), is that both Bancor and Sushi projects seem to have a community-first approach. I don’t see any cultural rift between us that would make it difficult for our two communities to be one. That’s probably the easy part.

I also have great respect for the Sushi developers. Even after the departure of 0xMaki and other superstar developers, the remaining team members have exhibited competence and grit, and I would be delighted to work alongside them towards a common objective. I hope they would feel the same way. The reorganization of both teams would be more of a bureaucratic issue than anything else, but that’s where the easy part ends.

The hard part is that the two projects have different tokens, and a different code base. After the proposed merger, would both products persist? If so, how would each be managed? Sushi has several deployments on various chains, which have a high management overhead - and getting out of a failing chain is much more difficult than getting onto one (by several orders of magnitude - trust me). We have no idea which of the new layer 1s, and layer 2s on Ethereum will succeed in the long term (or even 12 months from now). I am worried that Sushi’s presence practically everywhere will eventually result in the need to reverse at least one of those decisions, maybe more, at some point in the future. Moreover, as some of these young chains begin to experience security problems, Sushi’s exposure (or, rather the community’s exposure) is fairly brazen - maybe more than I can stomach. It is important to remember that Bancor, first and foremost, is building an image around safety and security, and in that regard, the prospect of inheriting Sushi’s current deployment landscape very unappealing.

The other issue is the Sushi token, and its relationship with xSushi. Bancor has always had very close ties with its regulator in Switzerland, and the Bancor Network Token maintains “non-security” status by design. Because of the fee collection by Sushi token holders, our combined projects would likely run into immediate regulatory problems. I am speaking from ignorance here - I am not an attorney. More importantly, I don’t know what Sushi’s legal counsel have advised. For all I know, the team has been building their own relationships and negotiating the legal framework, or are seeking a No Action letter or similar. Depending on how far advanced these discussions between Sushi and the regulator are, it could be a non-issue. However, the problem doesn’t end there.

I would like to know if the proposer is suggesting a 1-project, 2-tokens system? If not, what happens? The BNT token is an intrinsic component of the Bancor ecosystem, and its removal (for example, to replace with something else) is difficult to imagine. I am also aware that Sushi has its own OTC deals and token lock-ups extending into future, whereas Bancor does not. These and other differences are difficult to reconcile.

I want to wrap this up by saying that I would be so excited to merge the Bancor project with Sushi. I can see very clearly that such an event could have immense value for all involved. There seems to be a synergy of developer talent, community energy, and shared vision that would be very powerful. I don’t want my criticisms here to be misconstrued as an outwardly negative reaction. I wouldn’t bother showing up if I thought the idea was vacuous. But it is [very] incomplete.

As an aside, one of our own community members posted this proposal (verbatim) to our weekly governance Snapshot, as a temperature check - which is just a glorified opinion poll. So far reception is positive, although it should be said that I would expect the majority of our own community members to be mostly unaware of the issues I raised here.

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YJ here from DeFiance. I am not sure if this is meant as a joke, but not very keen to support this proposed merger until there are more details and structure plans on this. There are 2 different tokens and different codes. Still trying to understand how can both of the products be merged, and merry xmas to the Sushi community!

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Found this proposal via Bancor, and this sounds interesting, I would still like to hear more about many points touched on by mbr above.

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OK, so I can’t find any discussion about this on the Bancor Forum and with the SHIBA reference in the name, I guess that this is a joke. But honestly, I dig the idea. Both projects have done absolutely astounding work in their respective fields.

Bancor has been the first DEX to use AMMs, which by now have become one of the most basic building blocks of the DeFi industry. Since then, they have been redeveloping this concept over and over, to the point where LPs are now insured against Impermanent Loss. It’s really a shame that Bancor has only seen so little trading activity, since they’re just so far ahead of time.

Sushi on the other hand has made major advances with the new paradigm of Yield Farming and LP incentives, and their work is reflected in their volume and TVL. Together, they’d be a massive powerhouse that would just dominate the DeFi sector.

Merging two tokens wouldn’t be too much of a problem. Just take a price snapshot and then migrate the token to a shared one using either price or market cap as weighting. But in this case, it’s SUSHI/xSUSHI and BNT/vBNT, so that would be four tokens that would have to merge into two.

SushiSwap would need to adopt Bancor’s token model, complete with single-token LP and an elastic supply for IL protection. Then, Bancor could just migrate all of their pools. Of course that’s a hell lot of work, but would be worth it.

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This shit is BASED AF

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