Yearn Finance merges with SushiSwap. The merger, announced by Yearn founder Andre Cronje on Tuesday, entails a number of synergies between the two ecosystems and other ventures initiated by Cronje.
As with previous integrations, the two teams would combine development resources and incorporate their liquidity pools to maximise the locked-in overall value. Yearn can help build an xSushi vault to farm SUSHI, Ether (ETH), YFI and Wrapped BTC (wBTC).
Subsequently, Yearn will use SushiSwap as an automated market maker of choice for its yield farming strategies. Many further integrations depend on the Yearn growing ecosystem sub-projects. Keep3r, a network to perform arbitrary jobs with smart contracts, transfers its treasury to SushiSwap and adds implementations for SushiSwap’s limit and stop-loss orders, as well as incorporation into SushiBar V2, its yield farm platform.
Cover protocol will also add the possibility of insuring SushiSwap liquidity pools through its system of CLAIM tokens. Cream Finance will provide liquidity into SushiSwap’s upcoming Bento Box and add SushiSwap liquidity pool tokens as collateral for lending. Both teams will work together on Cronje’s upcoming derivatives trading platform, Deriswap, as well as an undisclosed future project.
SushiSwap governance and tokens will stay separate from Yearn. However, the teams want to connect the two projects’ treasuries to allow each to have a stake in the other. A governance vote will be held in both projects that would let holders choose if part of their treasuries should be devoted to purchasing each other’s tokens. The two projects will thus be able to participate in each other’s governance processes in the future.
Further integrations to be voted on include a SushiSwap liquidity opportunity for some of the Yearn’s yield farm pools to be allocated to Yearn, with the CRV to yyveCRV being a possible candidate. The Keep3r/ETH pool will also be included in the SushiSwap “permanent menu” of SUSHI rewards. Finally, grants to SushiSwap developers will be compensated by means of yGift tokens, a non-fungible token that carries a certain amount of money and contains a personalised message.
The merger with SushiSwap is the first to include a mutual exchange of treasury allocations. Due to this, it is also the first Yearn merger to be put up for a vote. Nonetheless, only some of these specific items will be deliberated on by the community.
SushiSwap’s merger is the fifth seen so far, and the first with a decentralized exchange platform. Previous integrations included other yield optimization protocols like Pickle Finance and Akropolis, the Cream lending protocol and the Cover insurance platform.