Sushi and the Merge
Introduction to Sushiswap
SushiSwap is a decentralized exchange (DEX) where users can trade between different virtual currencies using a connected cryptocurrency wallet, such as MetaMask. The exchange lets people trade between 11,700 different pairs of currencies.
Even though SushiSwap is a copy of Uniswap, it is not the same in other ways, such as how the fees are set up. As of the launch of the new token, Uniswap doesn't offer any more rewards, while SushiSwap gives more Sushi tokens for staking new tokens.
What is The Merge?
With the Merge, which happened on September 15, 2022, Ethereum's new proof-of-stake consensus layer, the Beacon Chain, was brought together with the network's original execution layer, Mainnet, which has been in place since the network's inception. It allowed the network to be secured with staked ETH rather than the energy-intensive mining that had previously been necessary. It was a fantastic breakthrough in achieving the goals of Ethereum's creators, who had envisioned increased scalability, security, and longevity.
Methodology
The purpose of this dashboard is to conduct an in-depth analysis of the Merge’s impact on Sushiswap by comparing activities of market maker before and after the Merge.
In order to find related transactions, we have to follow the following instructions:
-
Adding liquidity transactions
- In
ethereum.core.fact_event_logs
table topics[0] = 0xdccd412f0b1252819cb1fd330b93224ca42612892bb3f4f789976e6d81936496
- contract_address in
ethereum.core.dim_dex_liquidity_pools where platform ilike 'sushiswap'
- In
-
Removing liquidity transactions
- In
ethereum.core.fact_event_logs
table topics[0] = 0x4c209b5fc8ad50758f13e2e1088ba56a560dff690a1c6fef26394f4c03821c4f
- contract_address in
ethereum.core.dim_dex_liquidity_pools where platform ilike 'sushiswap'
- In
I chose to use topics[0]
as condition instead of event_name
because some tokens have tax for transactions and this can create Burn
event which can lead to miscalculation.
As can be seen from the chart, the number of total market makers decreased from 1537 before the Merge to just 1468 after the Merge.
When looking at the Market Maker by type of actions, we can see that this decrease was due to the decrease of market makers who removed liquidity when this number decreased from 890 to 671.
Moreover, the number of market makers adding liquidity increased from 647 to 797.
The success of the Merge really gained trust from market makers and encourage them to add liquidity.
As can be seen from the chart, the number of total liquidity actions decreased from 2129 before the Merge to just 2039 after the Merge.
When looking at the the type of actions, we can see that this decrease was due to the decrease of removing liquidity actions when this number decreased from 1189 to 837.
Moreover, the number of market makers adding liquidity increased from 940 to 1202.
The success of the Merge really gained trust from market makers and encourage them to add liquidity.
As can be seen from the chart, before The Merge, only $6.4M of liquidity were added to pools while $119M of liquidity were removed from pool. This made the net liquidity in pool -$113M.
However, after the Merge, $98M of the liquidity were added while only $92M of the liquidity were removed. This made the net liquidity in pool +$5.7M.
SoThe success of the Merge really gained trust from market makers and encourage them to add liquidity.
According to the chart on the left, we can see that the amount of liquidity added to pools increased slowly between Sep 1 and Sep 14 from $490K to $6.4M and the amount of added liquidity per day remained less than $1M.
However, on Sep 15, when The Merge is successful, the amount of liquidity added on this day was $37M, 50X from the last day and made the cumulative liquidity added to pools skyrocket to $43M.
This means the success of the Merge plays an important role in decision of market maker and when everything is going well, market makers would put more money to pools on Sushi.
According to the chart on the left, we can see that the amount of liquidity removed from pools increased sharply 6 days before The Merge. On Sep 9, around $24M were removed from pools and the daily amount of liquidity removed from pools maintained over $1M
per day.
On Sep 14, one day before The Merge, the highest amount of liquidity were removed from pools with $55M removed and made the cumulative amount of removed liquidity on Sep 2022 skyrocketed to $119M
However, right after the Merge is successful on Sep 15, this trend slowed down which means the market makers gained back trust in ETH and stopped withdraw liquidity from pools.
Most affected pools
As can be seen from the chart, the pool which is affected by The Merge most is USDC-WETH with $25M.
removed from its liquidity.
As can be seen from the chart, the pool which is added liquidity most after the Merge is USDC-WETH with $49M of liquidity added to this pool. This number is 2x bigger than the amount of liquidity removed before the Merge
Capital redeployment by Market Makers
Conclusion
- The success of the Merge plays an important role in the decision of market makers. Looking at the activities of market makers, we can see that they tends to remove liquidity before The Merge to avoid risk and redeployed liquidity when the Merge is successful.
- USDC-WETH is the pool affected most by The Merge when a lot of funds removed before the Merge and 2x that amount redeployed back after The Merge.
- Olympus DAO is the top 1 LP in term of removed liquidity before the Merge with $21M. However, they didn’t redeploy the liquidity after The Merge
- In contrast, Tokemak Deployer only removed $7M before the Merge but they redeployed back $26M after the Merge.

Glossary
In DeFi, a market maker is an individual or business that actively buys and sells on a cryptocurrency exchange (Sushiswap in this example) to increase the exchange's liquidity and depth while profiting from the bid-ask spread.
Top LP removed their liquidity from pools are as below:
-
0x8d34ea6fb1ed6b60f94ac6cd01dd1181ef12290e: Olympus DAO - $21M
-
0x60ca1f1f3abc9146cc7561d39c9ab1a7a279f83f - Unknown - $12.4M
-
0x6914fc70fac4cab20a8922e900c4ba57feecf8e1 - Unknown - $11.3M
-
0x106fc088aba908130fbc343f2f6d212ff36150d1 - Unknown - $11.3M
-
0xc5ed2333f8a2c351fca35e5ebadb2a82f5d254c3 - Unknown - $7.1M
-
0x9e0bce7ec474b481492610eb9dd5d69eb03718d5 - Tokemak Deployer - $7.04M
Other LP in this list withdrew less than $7M
-
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Top LP deployed back their liquidity from pools are as below:
-
0x60ca1f1f3abc9146cc7561d39c9ab1a7a279f83f - Unknown - $29M
-
0x9e0bce7ec474b481492610eb9dd5d69eb03718d5 - Tokemak Deployer - $26M
Other LP in this list redeployed back less than $6M
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