SushiSwap Acquires Shipyard to Boost DEX Performance

Sushi Labs, the developer behind the popular decentralized exchange (DEX) SushiSwap, has announced the acquisition of Shipyard Software, a cryptocurrency trading software developer. The move aims to address several performance issues faced by DEXs, including mitigating impermanent loss, optimizing liquidity provisioning, and enhancing multichain trading efficiency.

The acquisition comes at a time when SushiSwap is seeking to regain lost ground after a protracted decline in total value locked (TVL) since 2021. The DEX is also facing increasing competition from other DEXs on platforms like Solana and emerging chains such as Hyperliquid, which specializes in trading.

Shipyard's products, including Blade and Kubo, will be integrated into SushiSwap to improve its performance. Blade is an automated market maker (AMM) using a request for quote (RFQ) system to avoid impermanent loss, while Kubo is a system for drawing liquidity into decentralized perpetual futures, or "perps," exchanges. Sushi Labs plans to integrate Kubo as a new Sushi-branded perps product.

SushiSwap, launched in 2020, was once among the most popular DEXs, with a peak TVL of over $8 billion in 2021. However, internal strife, exploits, and legal challenges led to a prolonged decline in the DEX's usage. As of now, SushiSwap ranks 13th among DEXs by TVL, significantly lagging leaders such as Uniswap and Raydium.

In the broader decentralized finance (DeFi) landscape, TVL is approaching highs not seen since 2021, driven by the adoption of liquid restaking tokens (LRTs), the growth of Bitcoin-native layer-2 networks (L2s), and rising cryptocurrency prices due to the 2024 bull market. As of January 28, aggregate DeFi TVL stands at over $119 billion, marking a more than 100% increase year-over-year, although it still lags 2021's highs of $170 billion.