Happy fall, my friends.

With summer officially departing the northern hemisphere for the year, I'm excited to leap into autumn, aka the best season for reading 😊

One of the most fun parts of writing The Generalist is that I get to think about the future. Sometimes, I'll write about a topic I've thought a lot about while other times I'm stretching to understand something new.

Today's piece falls into the latter camp. Learning about Sushiswap has been a fascinating, rewarding endeavor but I'm cognizant of the fact that I still have a ton to learn.

Though I always love hearing from readers, I'd be especially for feedback from any Sushi connoisseurs this week.

Let's dig in.

Actionable insights

If you only have 2 minutes to spare, here’s what investors, operators, and founders can learn from Sushi’s story.

• Strong communities compensate for other weaknesses. While Sushi may not have the world’s most powerful exchange, it does have crypto’s most vibrant community. That’s driven its success in spite of its vulnerabilities.
• Crypto follows different paths for disruption. To unseat an incumbent in the crypto world, find ways to liberate power or wealth. Holding too tightly to either presents an avenue of attack for insurgents.
• Modern brand building must consider mimetic power. Though little thought seems to have gone into it, Sushi succeeded in landing on a meme and emoji-friendly brand. More consumer-facing companies should consider how their offering channels current forms of expression.
• Crypto is a multipolar market. Though global in scale, crypto nevertheless has power centers. In particular, North America and Asia represent the sector’s two poles; those with universal ambitions must be sure they’re taking into account both userbases.

***

Chef Nomi was in the wind. And he’d taken the money with him.

Just ten days after founding Sushiswap (aka Sushi), the decentralized exchange’s pseudonymous founder pulled out $14 million worth of Ethereum and disappeared.

What followed was the crescendo of 2020’s crypto bull-run and in particular, the torrid months known as “DeFi Summer.” Part manhunt, part trial by media, and part murder, the demise of Chef Nomi proved the beginning for something much more consequential: a truly decentralized organization, with a stronger community than any of its peers. That Sushi has succeeded not in spite of, but because of its chaotic origins illuminates what matters when it comes to empire-building in the crypto economy.

In today’s briefing, we’ll unfurl the full saga, before alighting on Sushi’s current scale, and future plans. We’ll touch on:

• The mark. Uniswap’s remarkable innovation, and critical vulnerabilities.
• The plan. How and why Sushi was founded.
• The heist. Chef Nomi’s ingenious maneuver to bring liquidity to the new exchange.
• The murder. A founder on the lam, and how DAOs mete out justice.
• The aftermath. The establishment of a headless organization.
• The future. Where does Sushi go from here?

Let’s...roll.

The Mark

It started with disappointment:

In early July of 2017, a young mechanical engineer named Hayden Adams was fired from his role at Siemens. It was his first job since graduating from Stony Brook and must have seemed like a safe place to kick off a budding technical career.

Suddenly unemployed, Adams sent the text above to Karl Floersch, a friend embedded in the Ethereum ecosystem. Floersch responded:

Adams’ reaction illustrated the young man’s inexperience:

Floersch assured him it didn’t matter; Adams could learn whatever he needed to make a dent. Even he must have been surprised by the success of Adams’ first project.

Fifteen months after sending that dejected text to Floersch, Adams launched Uniswap, a decentralized, automated token exchange built on Ethereum. Simply reaching that point represented a feat of endurance and ingenuity; Adams had learned to program in multiple languages and forfeited a salary to turn what started as a hobbyist project into a full-featured decentralized exchange (DEX).

The significance of Adams’ innovation should not be underestimated. In creating Uniswap, he and the team succeeded in solving a bête noire of the crypto world: running an exchange without an order book. While the details are eye-glazing for all but the most fastidious of students, the upshot was that Uniswap was able to attract liquidity without centralization. No one had managed this before, at least not with the same elegance.

So, how did Uniswap do it?​
​

THE PIECE IN A MEME

For the visual learners...

PUZZLER

All guesses welcome and clues given to anyone that would like one. Just respond to this email for a hint.

A medley of midday maestros moseyed to the win — Jim W first among them. He was followed by John G, Jake S, Venu B, Trevor N, Kunal G, Jay W, Shaun L, Hari A, and Dave C. All cracked the quotidian code embedded in this conundrum:

The answer? NOON. Ah, yes. Surprisingly tricky — well done to all that played.

Wishing you a lovely Sunday, and maybe even a little Sushi.

🍣,

Mario

PS - If you haven't had a chance, I'd love to hear from you in this quick survey.