Mable Jiang: Understanding the Cultural Differences and Development Potential Behind Uniswap and SushiSwap

This article was published by BlockBeats, with the original title: 《Why SushiSwap Will Succeed Like Uniswap》，Author: Mable Jiang, Partner at Multicoin Capital, Translated by: QLY

When DeFi was booming last year, fork projects became a trend, but not many succeeded. SushiSwap is one of the outstanding ones. Even today, SushiSwap maintains strong development momentum. What is the reason behind this? According to Mable Jiang, a partner at Multicoin Capital, although SushiSwap and Uniswap appear very similar, they actually take completely different approaches to meet the needs of crypto investors, and this is influenced by cultural differences between the East and the West.

Below is the original article by Mable Jiang published on Coindesk, translated by BlockBeats:

At the end of 2020, I wrote an article about the cultural differences in the Eastern and Western crypto communities. As 2021 approaches, I want to explain from the perspective of cultural differences why SushiSwap and Uniswap, two almost identical products, have both achieved success.

When SushiSwap was first launched at the end of August 2020, it sparked speculation about the intentions behind this fork project. Some believed it was a significant blow to liquidity pools that lacked a moat, while others thought it was a clever move by SushiSwap to preemptively launch before Uniswap introduced its token. At that time, the narrative in the entire crypto Twitter space was largely centered around "community-supported projects." This concept first emerged with the launch of Yearn and YAM, and it resonated well with users' motivations, as the idea of "fair distribution" began to take hold. After the launch of YFI, anti-venture capital sentiments grew increasingly vocal.

I work for an investment firm in the U.S. and have spent a lot of time understanding the differences between Eastern and Western cultures. I believe that the projects of SushiSwap and Uniswap represent the cultural differences between Eastern and Western countries in the cryptocurrency space. This perspective explains why both projects ultimately found their respective product markets, despite employing vastly different market entry strategies.

Uniswap and SushiSwap

Uniswap is the first automated market maker (AMM) that caught people's attention. It is a tool that allows users to trade crypto assets without a counterparty or order book. Uniswap gained widespread attention during its growth, securing multiple rounds of funding totaling $11 million from investors including Paradigm, a16z's crypto fund, USV, Version One, Variant, Parafi Capital, SV Angel, and A.Capital. Uniswap is known for its innovation, venture capital legitimacy, and high liquidity, attracting many early adopters in the DeFi space.

There are many similarities between Uniswap and Coinbase—I will mention this multiple times in this article. Coinbase can be considered a pioneer in U.S. crypto trading, prioritizing user experience (UX) and compliant investments.

SushiSwap, on the other hand, was forked from Uniswap's open-source code and quickly grew through various incentives, reaching a valuation of hundreds of millions of dollars. Although Uniswap dominates the market, SushiSwap now holds a significant market share as well. This reminds me of Binance, which also did not enter the market early but now occupies a considerable market share.

How can a project succeed by copying another project? The secret lies in the cultural differences between the development team and their target users.

Different Products for Different Regions

Uniswap is known for its focus. Compared to other DeFi pioneers, it has ample capital support and research background, but the team chose to concentrate on becoming an innovative automated market maker (AMM). It advocates minimalism, and its streamlined front-end system reinforces its brand identity, creating an efficient and easy-to-use trading platform, similar to how Google's homepage focuses user attention on a single action. Coinbase employs a similar approach, with a clear and friendly design clearly aimed at the average American user.

SushiSwap chose a completely different approach from Uniswap. It first divided Uniswap into front-end and back-end components, with one key difference: liquidity mining. If SushiSwap stops innovating, it may fade away due to a lack of differentiation. However, since its inception, SushiSwap has gradually evolved from a pure AMM into a comprehensive protocol system. Now, it operates as an independent DeFi network.

When users enter the SushiSwap website, they can see AMM and "Quick Switch" in the sidebar, as well as Onsen, a variable incentive program that allows people to vote for new liquidity pools. The team also plans to launch BentoBox, which will support margin trading for users. The trading approach in Western countries follows a different model: creating a comprehensive set of trading tools that encourage users to stay within a single ecosystem, while cultivating user loyalty and capturing value through tokens launched on the platform.

American users may find Binance's front-end interface too cluttered, while Asian users tend to prefer a compact page with more options. These seemingly trivial design trade-offs actually send different signals to different user groups, which is why SushiSwap stands out from its competitors, catering to advanced users who want to access more features with a single click.

Refined Production vs. Rapid Iteration

When Uniswap launched in 2018, it focused on optimizing the system (such as lower gas fees and open-source mobile front-end). In May 2020, it released its second version, adding more ERC20 token trading pairs, TWAP oracles, and flash swaps.

The Uniswap team was very cautious in building the network, and few people knew its roadmap. Similarly, after years of product iteration, Coinbase has developed a similar building model; it does not frequently update the system or launch new tokens, but when it does, the impact is significant.

SushiSwap takes a completely different approach. It is a community-driven project, and many decisions need to be made through public voting, such as whether to hire a developer and how much to pay them. Therefore, the core members of SushiSwap are very proactive in gathering information from the community and respond promptly on Discord.

This also shares many similarities with Binance, where the platform manager responsible for the Chinese market often communicates with users in group chats, allowing the product to quickly adjust based on community feedback. This reflects the cultural characteristics of transparency, community initiation, and rapid iteration. Both Binance and SushiSwap aim to provide as much of what users want as possible, even if it comes from a small number of requests.

Brand or Business Expansion

In 2019 and 2020, many DeFi tokens emerged, and DEXs and AMMs quickly evolved into launch platforms for new tokens. As the leader in this field, Uniswap naturally attracted a large number of tokens. With its simplicity and first-mover advantage, projects easily chose to launch liquidity pools on Uniswap. As a rapidly growing latecomer, SushiSwap did not have this advantage; it chose to promote strategically and compete with Uniswap based on individual assets.

The SushiSwap team adopted a strong business development model: the core team collaborates with partners to expand liquidity pools, provide better incentive mechanisms, support the launch of new tokens, and facilitate the migration of existing projects' liquidity. If Uniswap meets the basic on-chain trading needs of the masses, then SushiSwap optimizes solutions for specific niche markets, including more seasoned traders and token issuers.

As mentioned earlier, compared to American users, Chinese users place greater emphasis on collaboration and trust, as they have higher expectations for trust. I believe SushiSwap will attract Chinese users by collecting feedback from community users and signaling through strategic relationships.

Binance is also known for promoting collaboration to build trust, and most of its regional products and communities are direct results of efficient collaborative relationships.

Uniswap and SushiSwap share the same code, but they attract different users and evolve into entirely different solutions. As user behavior and patterns continue to influence the direction and roadmap of each project, this divergence will likely continue to develop in the future.

DeFi is a global trend, and liquidity is also global, but it is clear that regional and cultural differences still play a very important role when it comes to the success or failure of projects. When investors assess the future prospects of tokens, they should pay special attention to the impact of cultural differences and strategies on projects.