Sushi Labs has acquired Shipyard Software, a cryptocurrency trading software developer, in a bid to improve the performance of the SushiSwap decentralized exchange (DEX), Sushi Labs said on Jan. 28.
The acquisition seeks to address several common challenges facing DEXs, such as SushiSwap. They include “mitigating impermanent loss, optimizing liquidity provisioning, and enhancing multichain trading efficiency,” Sushi Labs said in a statement shared with Cointelegraph.
The deal comes as SushiSwap seeks to regain lost ground after a protracted decline in total value locked (TVL) since 2021. The DEX is also facing increasing competition from DEXs on Solana and emerging chains such as Hyperliquid, which specializes in trading.
Sushi’s TVL has fallen sharply since 2021. Source: DefiLlama
Related: XRP’s DEX clocking $17M daily volume — CEO
Shipyard’s products include Blade, an automated market maker (AMM) using a request for quote (RFQ) system to avoid impermanent loss, and Kubo, a system for drawing liquidity into decentralized perpetual futures, or “perps,” exchanges.
Sushi will integrate Kubo as a new Sushi-branded perps product, it said. Impermanent loss refers to the loss of value to liquidity providers on DEXs due to the changing relative values of cryptocurrencies in a liquidity pool.
Sushi Labs is the developer of SushiSwap, a popular DEX. The platform operates across more than 35 blockchain networks and touts roughly $230 million in TVL, according to DefiLlama.
Launched in 2020, SushiSwap was once among the most popular DEXs, with a peak TVL of more than $8 billion in 2021 before internal strife, exploits and legal challenges caused a prolonged decline in the DEX’s usage.
It now ranks 13th among DEXs by TVL, significantly lagging leaders such as Uniswap and Raydium, which sport TVLs of around $5.6 billion and $2.7 billion, respectively, according to DefiLlama.
DeFi TVLs are approaching past highs. Source: DefiLlama
Rising DeFi TVL
In decentralized finance (DeFi), TVL is approaching highs not seen since 2021, according to data from DefiLlama.
The TVL spike has been driven by the adoption of liquid restaking tokens (LRTs) and the growth of Bitcoin-native layer-2 networks (L2s), the data shows. Rising cryptocurrency prices due to 2024’s bull market also drove TVL higher.
As of Jan. 28, aggregate DeFi TVL stands at upward of $119 billion, marking a more than 100% increase year-over-year, according to DefiLlama. It still lags 2021’s highs of $170 billion, the data shows.
Magazine: Did Telegram’s Pavel Durov commit a crime? Crypto lawyers weigh in