SushiSwap

SushiSwap is a multi-chain DEX whose V2-style pools hold paired assets. The pool’s rebalancing sells the appreciating asset for the depreciating one as prices move, an impermanent loss the client was never told to expect. We reject the entire AMM category on this mechanism regardless of protocol quality. The DefiLlama API read on 2026-08-15 reported about $33.1M across a broad multichain record, with most capital on Ethereum, Polygon, Arbitrum and Base.

Review triggers: events that reopen the verdict
• Ships a product line without impermanent-loss exposure that merits its own review

Watched nightly: a warning on its venues or files, or a cited document that changes, reopens the memo. The first confirmation is due 2026-11-15.

The research file

Mechanism applicability

Sushi describes V2 pools as standard 50/50 liquidity positions. A provider contributes the paired assets, receives SLP tokens representing the pool share and earns a proportional share of trading fees. Trades change the pool reserves and therefore the provider’s asset mix. Sushi’s own impermanent-loss explanation says the pool automatically rebalances by selling some of the appreciating token for the depreciating token when relative prices move. That is the exact inventory mechanism governed by the v1 AMM-LP dossier.

Current observation and scope

The DefiLlama protocol API read on 2026-08-15 reported approximately $33.1M of SushiSwap TVL across a broad multichain record, with the largest balances on Ethereum, Polygon, Arbitrum and Base and numerous smaller deployments. Current Sushi pool materials continue to offer LP deposits and SLP positions. This class application establishes the V2-style LP mechanism and survey perimeter only; it does not underwrite any pair, token, deployment, router, contract authority, audit or incident history.

Control and exit applicability

The position owner can remove liquidity, but exit returns the pool’s then-current inventory rather than the originally deposited token quantities or a guaranteed dollar value. Sushi’s Zap feature can swap a single deposit into the V2 pool’s 50/50 ratio and issues SLP, which simplifies entry without changing the exposure. Pool selection, withdrawal control and protocol implementation can be inspected in an individual review, but none prevents arbitrage-driven inventory rebalancing or the realization of divergence loss on exit.

Why the shared dossier decides

The v1 AMM-LP dossier rejects compensation for bearing path-dependent inventory conversion and impermanent loss in advised accounts. Sushi’s scale, multichain reach, fees and user-controlled withdrawal do not remove that mechanism. Reopen only for a separately identified product with no LP inventory or impermanent-loss exposure and an independently underwritable return source; a new pool, chain, incentive or higher TVL would not satisfy the criterion.

Class rule

The amm lp class is outside the approved structures, so every protocol in it is not approved until the rule changes. The rule is about the structure, not an adverse finding about this protocol, and it is not a client instruction. The events that would reopen it are listed with the memo.

Sources

The claims above trace to these. Where a number could not be independently verified, the thesis says so.

• Sushi FAQ — providing liquidity · primary · accessed 2026-08-15
  Supports: liquidity provider, pool deposit, trading fees, V2 and V3 pools
• Sushi FAQ — impermanent-loss mechanism · primary · accessed 2026-08-15
  Supports: paired assets, automatic rebalancing, inventory conversion, withdrawal loss
• Sushi FAQ — V2 Zap and SLP positions · primary · accessed 2026-08-15
  Supports: SLP token, V2 50/50 ratio, single-asset zap, automatic swap
• DefiLlama — SushiSwap survey record, read 2026-08-15 · secondary · accessed 2026-08-15
  Supports: current TVL, chain distribution, DEX category, survey perimeter

Inherited controls

The research above describes the protocol layer. Every position also inherits the asset it holds and the chain it settles on. The layer with the most administrative power sets the position’s effective control; that describes control, not quality or suitability.