Research into SUSHI prices and economics indicate it is still overvalued and unlikely to reach ATH again

According to Glassnode analyst Liesl Eichholz, when digging into the economic value of the SUSHI token, it can be seen that it is worth much lower than the current price. And that’s after the price of the token plummeted 70% over the past week to $ 2.36.

SUSHI may be worth far less than its current price

Studies confirm that the value of protocol management should not be discreet, but very difficult to quantify, showing that such incentive productivity is mainly due to hype.

Eichholz said:

“The rate of inflation is the primary issue that should be addressed when assessing SUSHI’s valuation. Newly minted tokens doled out as rewards will dilute the holdings of existing investors. Inflation has been incorporated into the system by design to encourage people to provide liquidity actively. But investors should be aware: anyone holding SUSHI without providing liquidity will be diluted. ”

The 0.05% redemption bonus is generated from the trading volume used to distribute newly minted tokens back to existing holders. Therefore, a certain amount of daily trading volume must be maintained to maintain a certain price level.


Based on the chart, the report states that without the volume is too large, the price of SUSHI above $ 10 is irrational and unsustainable:

“In reality, assuming that SushiSwap captures a more realistic daily trading volume of $ 400 million, the sustainable price for SUSHI would be $ 0.31 – a full 97% lower than its all-time high of $ 11.93.”

The analyst says that the price of SUSHI is likely to remain bullish in the short term due to hype and lack of understanding of its fundamentals.

SUSHI’s price plummeted over the weekend when it was revealed that the founder had sold 2.5 million, of which he bought through 10% of the development fund’s shares. Control of the protocol was then given to the CEO of FTX crypto derivative exchange, Sam Bankman-Fried, after a backlash from the community.

Bankman-Fried, also the CEO of Alameda Research, said that SushiSwap is currently on the move and will be run by the community, not by him.

SUSHI prices hit an all-time high of more than $ 11 shortly after launch, but they have returned to earth since then and are now down almost 80% of that peak of $ 2.36 according to the tool tracking Uniswap token prices.

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