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Investing In SushiSwap (SUSHI) – Everything You Need to Know

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What is SushiSwap (SUSHI)?

SushiSwap (SUSHI) is an AMM (automated market maker) and DeFi token that continues to see growing adoption. The DEX was designed to improve on one of the most popular Ethereum Dapps in the world, Uniswap. Specifically, SushiSwap introduces more community control mechanisms and DeFi features into the platform.

AMM vs DEXs

As of late, AMMs have seen an uptick in users. These protocols are more popular than ever because they improve many of the shortcomings of traditional decentralized exchanges. Unlike a centralized exchange, which relies on an orderbook to link up traders and dictate pricing, AMMs utilize smart contracts to create markets for any two tokens. In this way, automated trading liquidity can be achieved between any two cryptocurrency assets.

AMMs solve issues such as a lack of liquidity in the market. These unique platforms allow any project to obtain liquidity via smart contracts known as liquidity pools. As such, AMMs are one of the best places to acquire hard-to-find and low liquidity tokens.

SushiSwap - Twitter

SushiSwap – Twitter

What Problems Does SushiSwap (SUSHI) Solve?

Like Uniswap, SushiSwap’s design helps to alleviate centralization in the market. Users trade directly with liquidity pools and via non-custodial wallets. Consequently, SushiSwap is less likely to get hacked and provides users with more flexibility in terms of coin selection. Keenly, SushiSwap was designed to give the users more control over the AMM and its future developments when compared to the competition.

Benefits of SushiSwap (SUSHI)

SushiSwap is geared to DeFi users. The platform allows anyone to swap tokens and add liquidity to pools. SushiSwap provides users with multiple ways to earn a passive income with less risk. You can also stake SLP tokens to earn SUSHI and stake SUSHI for xSUSHI and earn rewards.

Passive Income

One of the biggest benefits of SushiSwap is that the majority of fees get paid back to users. Liquidity providers receive large rewards for their added contributions. Impressively, the SUSHI/ETH pool pays out double rewards. SushiSwap is the first AMM to send all profits back to the community that maintains and services it.

Fees

SushiSwap fees are more affordable than centralized exchanges like Coinbase. Specifically, SushiSwap users pay a 0.3% fee when they join a liquidity pool. There is also a small transaction fee that is only paid once when you approve a new token’s pool.

Governance

The community governance mechanism employed by SushiSwap provides users with a chance to vote on all vital upgrades and protocol changes. Notably, a percentage of all freshly-issued SUSHI is set aside for the future development of the project. The community gets to vote directly on what projects deserve this financial boost.

Support

The crypto market has shown major support for this project since its launch. The platform received glowing endorsements from multiple DeFi platforms. Also, some of the largest centralized exchanges in the world added the platform’s token, SUSHI, days after the project launch publicly. This combination of market and user support helped SushiSwap to gain popularity quickly.

Staking and Farming

SushiSwap offers DeFi users access to the most popular features such as staking and farming. Many new users prefer staking over trading because it’s less labor-intensive and provides more consistent ROIs. Additionally, the farming protocol means you don’t need to be a liquidity provider to earn rewards.

How Does SushiSwap (SUSHI) Work

SushiSwap is a hard fork of Uniswap. As such, it’s built atop the Ethereum blockchain and is compatible with all ERC-20 compliant wallets. The core design is nearly exact to Uniswap with the main differences arising in community-oriented features and benefits.

SUSHISWAP DEX

SushiSwap DEX

DEX

At the core of SushiSwap is its DEX. Users can scroll through a huge selection of tokens and trade their digital assets in seconds using this platform. Best of all, since the DEX is non-custodial, SushiSwap never holds your tokens.

Sushibar

The SushiBar is another cool feature that makes SushiSwap unique. SushiBar allows you to stake your Sushi and receive xSushi in return. You can then earn more rewards by farming in the xSushi pool. All xSushi stakers gain a percentage of fees from the exchange.

Liquidity Farming

One of the core protocols of SushiSwap is liquidity pools. These are smart contracts that users can lock their crypto in exchange for rewards. The process is easier than trading and far less risky for a new user.

SUSHI

SUSHI is an ERC-20 token. The token serves various purposes within the ecosystem. SUSHI is used to reward users a portion of the exchange fees. SUSHI also entitles users to governance rights. The more SUSHI you hold, the more voting power you have. Notably, SUSHI’s issuance is set at 100 tokens per block.

SLP Tokens

Users receive SLP tokens whenever they provide liquidity to SushiSwap pools. You earn trading fees as a liquidity provider and can double up on these rewards by farming your SLP tokens.

xSUSHI

xSUSHi is another unique token in the network. You receive xSUSHI in exchange for staking SUSHI tokens in the Sushibar. To mint xSUSHI tokens, you need to first stake SUSHI. Keenly, xSUSHI tokens hold more value than regular SUSHI.

History of SushiSwap (SUSHI)

Despite its early claim to fame, SushiSwap has had a very checkered history. The platform entered service in early 2020. Impressively, the developers choose to not conduct a premine when they launched the DEX on Ethereum block number 10,750,000. Like many other DEX projects, SushiSwap was created by a group of anonymous developers. Chef Nomi is credited as the platform’s primary creator. Additionally, two other pseudonymous co-founders by the names of SushiSwap and 0xMaki were involved in these early stages of the project.

SushiSwap (SUSHI) Rug Pull….Almost

Sadly, in September 2020, SushiSwap’s developers pulled a rug pull. A Rug pull is when a project’s developer suddenly, and without warning, withdraw a huge amount of funds from the project. In this instance, Chef Nomi decided to withdraw 38,000 ETH from the platform’s liquidity pool. The decision caused a huge ruckus amongst the community with most condemning the maneuver as fraudulent.

SushiSwap (SUSHI) Homepage

SushiSwap (SUSHI) Homepage

Interestingly, Chef Nomi wised up and returned the ETH back to the pool. However, by that time trust was lost and ownership of SushiSwap was passed to Sam Bankman-Fried. Bankman-Fried helped to restore faith in the project due to his stellar record in the market. He had previously served as the CEO of FTX and the quantitative trading startup, Alameda Research.

How to Use SushiSwap (SUSHI)

To use SushiSwap, you will first need to acquire some ETH. There are many ways to go about this, but the most popular is via a fiat on-ramp. First, you will need to head over to a centralized exchange that supports fiat currency such as Binance. Fiat on-ramps will require that you provide ID and other details. Once you’re registered, you can fund your account with fiat currency and convert it over to ETH. Now you’re ready for some SushiSwap.

When you arrive at SushiSwap, the first step is to choose a liquidity pool. This step can require some research of crypto assets. Remember, AMMs such as SushiSwap don’t require projects to go through any verification process. You always need to DYOR (do your own research) to avoid rug pulls and other projects that are fraudulent.

DYOR

Once you make your decision, you are ready to link your ERC-20 compliant wallet. This step is very easy. There is a “Link to your Wallet” button on the main screen. Hit the button and you will be redirected to your wallet. Input your password and your wallet is linked.

Now you are finally ready to add your crypto assets to the liquidity pool that best meets your investment strategy. Once you stake your tokens, you will receive SLP tokens. These tokens appreciate in value as the project’s liquidity pool increases. Additionally, you can then farm these tokens to earn more rewards.

How to Buy SUSHI

BinanceBest for Australia, Canada, Singapore, UK and most of the world. USA residents are prohibited from buying SUSHI. Use Discount Code: EE59L0QP for 10% cashback off all trading fees. 

Gate.io Best exchange for USA residents.

How to Store SUSHI

Storing SUSHI doesn’t require you to do anything out of the ordinary. You can store this digital asset in any ERC-20 compliant non-custodial wallet. The market is full of free options to choose from. MetaMask and WalletConnect are both popular options that require very little setup and are free to download and use. Once you install the wallet, you will want to add a SUSHI option via the “add tokens” button. From there, you can send and receive SUSHI with ease.

If you seek to make a major investment in SUSHI or if you are planning on HODLing this crypto for long periods of time, a hardware wallet is the best option. Hardware wallets keep your crypto stored offline in “cold storage.” This strategy makes it impossible for online threats to access your holdings. The Ledger Nano S or the more advanced Ledger Nano X both support SushiSwap (SUSHI).

SushiSwap (SUSHI) – A Project that Rose from the Ashes Thanks to a Vibrant Community

It’s not often in the DeFi sector you hear about projects that have gone through such controversy and still remain top contenders in the market. SushiSwap is unique in this aspect. The combination of helpful features and community governance makes this platform a great choice for anyone seeking an alternative to Uniswap.

David Hamilton is a full-time journalist and a long-time bitcoinist. He specializes in writing articles on the blockchain. His articles have been published in multiple bitcoin publications including Bitcoinlightning.com

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