Tensions Between SushiSwap and Lido are Rising Over the Takeover
Tensions between two popular decentralized finance (DeFi) projects have reached their breaking point as cryptocurrency exchange Sushiswap and Ethereum staking protocol Lido await the outcome of a controversial vote to return stolen cryptocurrencies to Sushi Swap.
This is a situation that involves a multi-million-dollar hack, a Twitter crypto battle, and weeks of decentralized management theater. DeFi projects have long faced mainstream skepticism due to the proliferation of hacks and poor decision-making by the decentralized organizations that run them.
Both problems became apparent in recent weeks, when Sushiswap made a$3.3 million bid to recover funds lost to the hack, but were thwarted by underhanded policies by governing body Lido. LidoDAO. A second attempt is underway but seems doomed to failure.
Sushi recovery attempt
Due to the nature of the Sushi swap exploit in April, most of the stolen funds were placed in a contract with the Lido Treasury, which automatically distributed them to Lido players and node operators. Nobody is trying to get this money back, but the 40 ETH (~$72,000) that ended up in the Lido vault seems to be the easiest to get back. Sushiswap would like to return this piece.
To support Sushiswap's recovery efforts, on May 4, LidoDAO put forward an administrative proposal to vote on whether to return 40 ETH from LidoDAO's vault to Sushiswap. In the runoff, a majority of Lido token holders voted in favor of the redemption, but the poll returned just 44 million votes, less than the 50 million needed to achieve a quorum.
On May 18, LidoDAO submitted a second management reimbursement proposal. Voting on the proposal closes on Thursday 25 May. In the new poll, turnout so far has been even lower - with a majority of voters expecting to "do nothing" - fueling tensions between the two projects as the prospect of a refund of the funds looks bleak.