DeFi History: Who Was the “Vampire” That Attacked Uniswap?
1) In Crypto, Is a “Fork” Just a Dining Tool?
When people hear fork, they think of cutlery.
In crypto, a fork means something else entirely: copying or splitting a project’s code and rules.
-
Soft fork: a backward-compatible tweak—small rule changes or incremental improvements.
-
Hard fork: a major rules change that creates a new, independent chain or protocol (think “road forks” into two paths).
Forks shaped DeFi’s evolution in dramatic ways. In late 2020, forks ignited a full-blown liquidity war among decentralized exchanges (DEXs).
2) What Was the “Vampire Attack” That Drained Uniswap’s Liquidity?
By Fall 2020, Uniswap dominated DeFi with the most users and liquidity.
Enter SushiSwap—a new project inspired by Compound’s successful token airdrop.
SushiSwap’s idea: “What if we lure Uniswap’s liquidity providers (LPs) with extra rewards?”
They offered Uniswap LPs SUSHI tokens + trading fees if those LPs migrated their Uniswap LP tokens into SushiSwap.
This bold strategy—attracting another protocol’s existing liquidity with incentives—became legendary as the Vampire Attack.
On Sept 8, 2020, SushiSwap executed the plan and, within weeks of launch, absorbed a huge chunk of Uniswap’s liquidity.
Seeing this success, projects across DeFi rushed to issue their own tokens and airdrops. Some farms flaunted eye-popping APR in the thousands during the frenzy.
3) Why Did Ethereum Gas Fees Explode During the DeFi Wars?
As DEXs fought for liquidity, transaction volume surged—and so did Ethereum gas fees.
High fees created friction for newcomers and everyday users.
A “zero-gas” narrative gained momentum. Into that opening stepped Binance Smart Chain (BSC, now BNB Chain) with lower fees and faster confirmations.
Between Jan–Feb 2021, BSC activity briefly overtook Ethereum in daily transactions.
Its flagship DEX, PancakeSwap, even surpassed Uniswap in 24-hour volume at times.
The takeaway: DeFi was no longer Ethereum-only. Networks like Polygon and Avalanche soon accelerated their own DeFi pushes.
4) Was Ethereum’s DeFi Ecosystem Really “Cloned” to Other Chains?
BSC’s rise supercharged the forking trend. Many Ethereum protocols were ported or re-implemented on BSC:
-
Ethereum-style lending → Venus on BSC
-
AMM ideas from Uniswap/SushiSwap → PancakeSwap
-
Leveraged yield concepts (e.g., Alpha Homora) → Alpaca Finance
At first, individual apps were forked. Later, entire stacks of the Ethereum DeFi playbook were mirrored across new chains.
The first half of 2021 flew by—then the summer brought exploits, rug pulls, and fork misconfigurations, exposing the risks of copy-pasting complex financial code.
5) Why Did “Cross-Chain Bridges” Become the Next Big Thing—And a Big Risk?
With Ethereum and BSC (and others) now competing, builders pitched a new idea: connect liquidity across chains.
If tokens could move seamlessly—ETH assets usable on BSC, and vice versa—DeFi’s reach would explode.
Enter bridges: infrastructure that locks a token on Chain A and mints a “wrapped” version on Chain B.
In theory, it’s like building a highway between two islands. In practice, it introduced complex security assumptions.
6) Why Did Bridges Become DeFi’s “Pandora’s Box”?
Bridges opened new attack surfaces before the tech and operational safeguards fully matured.
As cross-chain volumes skyrocketed, exploits and hacks mounted.
Chains like Avalanche, Tron, and Fantom saw bursts of liquidity—then user confidence wavered as high-profile bridge incidents piled up.
The result: enthusiasm cooled, bridge volumes declined, and the community began asking a hard question—
“Is cross-chain worth the risk?” The answer is more nuanced today, but the early period showed that rapid liquidity growth can outpace security.