Thread by @KyleSamani

0/ Sushi and super apps. A 🧵

Sushi just turned 1. I think Sushi is little bit lost, and doesn’t know what it wants to be when it grows up

Multicoin owns some SUSHI

1/ Super apps used to be a mostly an Eastern phenomenon. The canonical example is WeChat

Fintech in the US has traditionally been siloed

Bank at Wells Fargo
Buy stocks on Robinhood
CC from Chase
Crypto from Coinbase

Etc

2/ Over the last 10 years, as all of the big fintech unicorns - Revolut, Robinhood, Chime, SoFi, etc - have started to reach saturation points for the markets they started serving

They all started naturally expanding into other financial services

3/ Today, all of the companies I just named offer kinda sorta everything under the sun

Banking and checking
Stocks
Options
Crypto
Passive investment products

In other words, they’re all trying to become super apps

4/ There really isn’t any reason why this shouldn’t be impossible

It’s hard though, mostly as a function of regulatory stuff + focus + UX confusion (eg do you have 1 app or 6)

5/ What does any of this have to do with Sushi and crypto?

Well, I started the thread by saying that the Sushi community needs to figure out what it wants to be when it grows up

6/ In crypto, we already have super apps. They’re called Binance, FTX, Coinbase, etc.

They offer spot, futures/perps, borrow/lend/margin, staking, debit cards, etc

7/ You can see that the UX for all of them are getting unwieldy. It is hard to offer this many products in a single logically consistent interface

8/ Today, there really aren’t any super apps in crypto

The closest is probably dYdX and Mango. They offer spot, borrow/lend/margin, and perps (Mango launching perps soon) all in one interface

Sushi is also kind of its own Super app with spot/miso/bento/etc

9/ But, to a large degree, there aren't any real DeFi super apps that are even close to what Binance/FTX/Coinbase offer

10/ I wrote a thread a few weeks ago on DeFi derivatives

The TLDR is that the end point for all *derivatives* trading is something that looks like FTX

Or in the case of DeFi, dFTX

Margining is *everything*

https://twitter.com/KyleSamani/status/1415697784993374218?s=20

11/ But

Not everyone trades derivatives

A lot of people never will

For people who don’t care about margining engines, the things they do care about are

Asset support
UX
Fees (this is debatable)

12/ Asset support should be interpreted as broadly as possible. It doesn’t strictly mean spot trading. It should include NFT baskets (maybe individual NFTs too… though that’s a lot more complex from a UX perspective), farming, and other retail-centric products

13/ Today if you go to sushi.com you see a lot of tabs in the upper left

14/ I’m not a Sushi expert, but I get the feeling these are mostly separate protocols/products (perhaps some integrations between them)

15/ I get the feeling that Sushi’s product development is pretty decentralized

And very community driven

So lots of people are saying “hey can you add X”

And for the most part, the Sushi team has added X

16/ So, for now, it feels like Sushi is trending towards being a more retail centric product offering

Which, is not necessarily bad

17/ But I don’t think the Sushi community has had a serious discussion about how the world evolves over the next few years, and where/how Sushi should position itself in that world

18/ I think it’s a mistake to ignore the derivatives market. It’s just too big to ignore. And unlike spot trading, there is real lock in from derivatives (collateral cannot be removed without closing positions

19/ Aggregating liquidity from all the derivs traders reduces slippage for traders

I know for now, most DeFi users don’t seem to care too much about slippage

But this cannot persist forever

20/ It is very possible that in order to do this, Sushi needs to split the front end in two: pro and retail

Coinbase has already done this with Coinbase Pro and Coinbase retail

You can see FTX moving in this direction now, though it’s a bit messier at the moment

21/ Sushi is IMO the largest and most interesting DAO in the world. It is by far the most community-driven protocol, period.

It will be nearly impossible to replicate something like it, given the unique circumstances under which Sushi was founded

22/ As Sushi tries to figure out what it wants to be when it grows up, it probably should continue to lean into its core strength: community engagement

23/ Probably, that means integrating more seamlessly with derivatives protocols like Perpetual Protocol, including treasury token swaps (disclosure, Multicoin owns PERP)

24/ Sushi has demonstrated you can bring disparate parties together at scale with real $ on the line

Pretty remarkable

I hope they continue to do that

But also be more clear and focused about product evolution over time

Feedback welcome!

{fin}