A fork paid Uniswap's providers to move their liquidity

Inherited archive entry · retained from the earlier edition. Its factual, legal and policy claims have not all been reverified for 19 September 2026. Research scope.

A fork that asked for your liquidity, not just your interest

A pseudonymous developer operating as Chef Nomi launched SushiSwap, describing it in the project's own account as "a fork of Uniswap" whose token, SUSHI, "is distributed via a liquidity incentive program." Rather than building pools from nothing, the design rewarded anyone who deposited the receipt they already held for supplying a Uniswap pool: Uniswap's own documentation describes this receipt, a liquidity token minted at the moment of deposit representing a provider's share of the pool. SushiSwap's contracts then redeemed deposited Uniswap liquidity tokens for the underlying assets and deployed them into matching pools of its own, moving the liquidity rather than requiring each provider to withdraw and redeposit by hand.

What the official record confirms, and what it leaves open

Sushi's own update, published 12 September 2020, states plainly that "migration was a success" and that liquidity providers who took part would shortly receive extra SUSHI. It is a community update, not a full accounting, and it does not itself state the precise day the migration transaction executed or the total value that moved. What it does establish is enough on its own: a project with no independent liquidity of its own, built by forking existing code, drew a meaningful share of an incumbent's liquidity through this mechanism, using a newly created token as the entire incentive.

Why the incumbent answered with a token of its own

Four days later, on 16 September 2020, Uniswap's own announcement opened with "UNI, the Uniswap Protocol token, is live!" Fifteen percent of a one-billion-token supply was allocated retroactively to historical users and liquidity providers based on a snapshot taken 1 September 2020, with roughly 400 UNI distributed to each of about 251,534 addresses regardless of how much they had used the protocol, alongside a liquidity mining programme starting two days later. Uniswap had operated for nearly two years without a token of its own. It introduced one within days of a rival demonstrating, in practice, that liquidity providers would leave for one.

Questions to carry forward

• Does liquidity that moved for a token incentive stay once a comparable incentive is offered elsewhere, or does it keep moving?
• What does a retroactive airdrop actually reward: past use of a protocol, or the ability to have been an early user at all?
• If a fork can redirect an incumbent's liquidity this quickly, what does that say about how much "network effect" a pool of capital, rather than the code around it, really provides?

Both records describe the same underlying fact from opposite sides: liquidity in an automated market maker is not loyal to the contract that first attracted it. It is loyal to whichever contract is currently paying the most to hold it, and in September 2020 that turned out to be true for both the challenger and, briefly, the incumbent it provoked into competing on the same terms.