• A user proposed that merging SushiSwap with the Bancor Network will help to solve the issue of impermanent loss in SushiSwap.
• However, the Bancor head of research has asked for further proof and a more substantive plan before proceeding ahead.

The latest talk in the crypto town is regarding a proposed merger taking place between Bancor Network and SushiSwap. This recent speculation has sparked after Mark, the head of Research at Bancor made a lengthy post on the SushiSwap forum. This was in response to a proposal put forward by an anonymous user going by the name suSHIBAnchor.

The proposal seeks to combine the two projects into a single entity dubbed SuSHIBAnchor which would benefit from better leadership, more liquidity, as well as protection against the “impermanent loss” phenomenon that threatens the core foundation of DeFi.

Related: Days after stepping down, former SushiSwap CTO cites poor communications and infighting as key challenges at the DEX

In the forum post, the anonymous users said that SushiSwap has been struggling with weak leadership as well as with the lack of profitability for its liquidity providers. Although the leadership issue is a relatively easier one to overcome, the issue relating to the lack of liquidity providers persists.

Alike other automated market makers, SushiSwap has been dealing with the problem of impermanent loss wherein users staking their tokens in a pool actually end up losing money. This “impermanent loss” accounts for billions of dollars in losses every year.

The merge – suSHIBAnchor – will help to address this problem

The proposal from suSHIBAnchor notes that the merger with Bancor Network will help to address these issues on SushiSwap. The Bancor Network has recently come up with version 3 – a revolutionary redesign of the Bancor protocol that provides further protection against impermanent loss.

The changes will provide additional protection to the act of depositing tokens in an AMM pool. It will also allow users to “stake and forget” their tokens along with complete exposure to a single asset and with no risk of impermanent loss.

Read More: DeFi exchange Bancor Protocol announces features of its long-awaited version 3

Along with SushiSwap, the merger will also be a win-win for the Bancor Network. As of now, SushiSwap has around $3 billion worth of liquidity in assets. This can be easily transferred to Banco as the upcoming V3 version supports limitless pools.

The idea of merging into a single entity of suSHIBAnchor has also attracted major support from the community members. A recent poll conducted on the SushiSwap forums proposal page noted that 59 percent of the commentators were in favor. Also, the merger to a single entity of the suSHIBAnchor isn’t going to be a cakewalk.

In the comments further, Bancor’s Head of Research and key contributor, Mark Richardson said that the proposal still lacks clear details of how the merger would look like. One of the biggest challenges has been that both projects have unique tokens and codebase. He further added that unless the proposer has something more to add that’s substantial enough, there’s very little to discuss.