Born out of controversy, SushiSwap DEX with its native SUSHI token is an eerie sibling to Uniswap Exchange. Launched in August 2020, Sushiswap entered the world of decentralized exchange with an aim to rule the DEX (Decentralized Exchange) space which was dominated by Uniswap.
The journey wasn’t smooth and filled with a lot of hiccups that could have strangled the whole project. Fortunately, the project was able to stabilize itself and became one of the highest rewarding platforms in the crypto space.
Should SUSHI be on your investment menu? Will it taste good with time? Stick around and get all your questions answered. Let’s explore Sushiswap Crypto –
What is SushiSwap?
SushiSwap is a decentralized exchange built on the Ethereum blockchain that was primarily created to facilitate swapping ERC20 tokens on its platform. Decentralized exchanges allow users to directly trade with each other without third-party interference. Binance and Coinbase are centralized exchanges that require users to create and verify accounts before they can trade on the platform. Users do not have to go through these cumbersome processes when it comes to trading on a DEX. If you have a compatible wallet, you’re good to trade on DEXes without revealing your identity
History of SushiSwap:
SushiSwap was created by two unknown developers, known by their Twitter handles 0xMaki and Chef Nomi. SushiSwap was forked from Uniswap which means it was created from the code used in Uniswap. In layman terms, it was a copy-paste job with few changes. To attract users to the platform, SushiSwap came up with the idea of Vampire Mining.
Vampire Mining:
The initial aim of Sushiswap was to dethrone Uniswap by attracting users to its platform and drain Uniswap’s liquidity. This is done by offering 1000 SUSHI tokens, minted per block (for the first 100000 blocks) that was later scaled down to 100 SUSHI tokens minted as a reward to the early liquidity providers who migrated their liquidity pool tokens (LP) from Uniswap to SushiSwap. This is called vampire mining that was accomplished by draining the liquidity pools of Uniswap.
Within 2 weeks of launch, it locked in $1.2 billion just by Vampire Mining
The Breakdown:
Unfortunately, the good things came to a shocking end when one of the founders i.e Chef Nomi suddenly liquidated a little over $14 million worth of SUSHI tokens which was supposed to be used as part of the protocol development fund.
No one (including 0xMaki) was aware that he has backdoor access to the development funds. This event outraged the whole community and drew criticism on a global scale. The event resulted in the downfall of SUSHI overall price level to below $1.00
The Repair:
Soon after the shocking incident, Chef Nomi stepped away from SushiSwap and the control was handed over to the CEO of FTX exchange Sam Bankman-Fried who did the work to stabilize the SushiSwap ecosystem and helped to pull the project out of turmoil.
The good news started coming back again when Chef Nomi returned all of the stolen funds back to the Sushi war chest. This news made major headlines with many crypto gurus found speculating this whole event to be staged. However, 0xMaki cleared that the efforts have been made on his part to get the funds back into the project.
From there on the project started to bloom and has diversified into various products, offering key features that will be discussed next in the post.
What is SUSHI Coin?
SUSHI coin is the native ERC20 token of the SushiSwap exchange. It played a major role in vampire mining by serving as a reward token to the liquidity providers who migrated their LP tokens from Uniswap to Sushiswap during the initial days.
SUSHI came a long way since then. The token is used for community governance, staking rewards and incentivizing liquidity providers.
Uniswap airdropped UNI tokens as an answer to SushiSwap Vampire mining
Reward Distribution:
Unlike Uniswap where 0.30% of the trading fee in any pool are equally distributed to the pool’s liquidity providers, SushiSwap allocates 0.25% to the active liquidity providers and the remaining 0.05% is converted back to SUSHI and distributed to SUSHI token holders.
Moreover, 10% of every SUSHI token distribution is kept aside for project development and security audits.
SushiSwap CEO Jared Grey has proposed a new tokenomics model to boost liquidity & decentralization in the platform.
How does SushiSwap Crypto Work?
SushiSwap works on Automated Market Maker (AMM) model and follows the similar algorithm on which Uniswap operates. Just like Uniswap, SushiSwap has liquidity pools where liquidity providers lock their tokens and facilitate the swapping of tokens.
The price of the token is adjusted based on the supply and demand that follow the equation –
X * Y = K
X and Y are the token quantities of the paired tokens
K is a constant
I have explained this step in the recent article on Uniswap Exchange (UNI). Head over to read that section if you aren’t familiar with AMM.
How to use SushiSwap Crypto Exchange?
If you’re familiar with Uniswap or Pancakeswap, trading on SushiSwap will just be another cakewalk and if you’re totally new to decentralized exchange, Hold on! it’s easier than you thought.
To start trading on SushiSwap, you need to visit app.sushi.com. The platform will greet you with a window where you can see two fields as shown below.
In the top field, you have to enter the coin you want to swap from and in the bottom field, you have to enter the token or coin that you wish to swap to. In the example, we want to sell Ethereum ETH and buy Decentraland MANA Coin.
Before moving ahead, it is mandatory to connect the supported crypto wallet with the platform. Commonly used wallets are MetaMask, Binance and Coinbase. Others can be seen from the image shared below –
Once you’re done with the steps, the platform will provide you with an estimated number of respective tokens that you will be receiving as part of the trade and related transaction fee. If you’re ok with it then click the rainbow-coloured swap button and Voila! the transaction is complete.
It is mandatory to hold ETH in the wallet to pay for the gas fee
SushiSwap Products:
SushiSwap Exchange:
SushiSwap exchange or SushiSwap DEX let you trade over 100+ ERC20 tokens without asking about your identity. There’s no need to upload KYC documents, camera scans or even create an account to log in.
All you need is an Ethereum compatible crypto wallet like MetaMask etc, (list shared above) and some quantity of Ethereum ETH token to pay for the gas fees. The trading fee on the exchange is 0.30% similar to Uniswap.
SushiSwap Liquidity Pools:
SushiSwap has liquidity mining pools where liquidity providers can deposit two cryptocurrencies of equal amounts (x*y=k) and earn a 0.25% cut in the trading fees. The liquidity providers are given Sushi Liquidity Pool tokens (SLP) which are used in yield farming, earning rewards on deposit.
SushiSwap Farms (Menu):
The farm allows users to earn rewards by staking the SLP tokens earned from the exchange by depositing tokens. Earlier the farm supported UNI-V2 LP tokens from Uniswap but now it has switched entirely to SLP tokens.
Users can choose from the wide array of options to yield rewards as shown below –
SushiSwap SushiBar Staking (xSushi):
SushiBar is the place where you can stake Sushi tokens to earn more Sushi tokens. As explained earlier, the 0.05% of the trading fee is converted back into SUSHI which is then distributed to the users staking their tokens on SushiBar.
The tokens are distributed as xSUSHI which can be converted back into SUSHI tokens by the users at the time of withdrawal along with the rewards earned in the form of additional SUSHI tokens.
Minimal Initial SushiSwap Offering:
MISO is a launchpad for SushiSwap. It’s a place where new tokens can be created and communities can launch new projects altogether. It’s actually an open-source smart contract created for non-technical founders to help them launch their token on SushiSwap starting with the auction of NFT assets.
Going forward, MISO can turn out to be a promising product of SushiSwap.
SushiSwap vs UniSwap:
Though both DEXes are built on Ethereum, they do have noteworthy differences which can help investors pick the right coin to invest in between the two –
| Parameters | SushiSwap (SUSHI) | Uniswap (UNI) |
|---|---|---|
| CodeBase | Fork of Uniswap | Original |
| Chain | Ethereum | Ethereum |
| Locked Value (USD) | $5.27B | $8.24B |
| DEX Rank | 3 | 2 |
| Staking Reward | Yes | No |
SushiSwap Benefits:
User Privacy:
All DEXes are known for their privacy features and SushiSwap is no different. You will never be asked to reveal your identity on the platform, not even your country of origin. It is that smooth. All you need is a crypto wallet, plug it on the platform and you’re good to go.
Community Governed:
After the initial hiccups, the platform is now completely community governed. Proposed changes in the project protocols are first opened up for voting and based on the community votes decision is taken to steer the DEX in the proposed direction.
Staking Rewards:
SushiSwap offers staking rewards to the holder of SUSHI tokens. All you need to do is stake your SUSHI tokens on SUSHIBar. Once done, you’re eligible to earn 0.05% of the trading fee paid in xSUSHI. This is different from Yield farming where the SLP token holders are rewarded with 0.25% of the trading fee.
ERC20 Compatible:
Ethereum is the most famous and largely used blockchain with tons of DAPPS running their native tokens on the platform like Audius coin, Enjin coin etc. Therefore, it is going to be an in-demand DEX supporting over 100+ ERC20 tokens.
Checkout MAGIC Token (Treasure crypto) on Sushiswap
Store of Value:
SushiSwap native token SUSHI is proving to be a great store of value because of its price appreciation. Like Uniswap UNI token, SushiSwap SUSHI has caught the much-needed attention that can help boost the price level of the token in the near future.
SushiSwap Limitations:
Not Multichain:
Unlike the popular DEX i.e Curve Finance, SushiSwap is not multichain. It can support ERC20 tokens only. This does limit its range of offerings. However, given the popularity of Ethereum, it is not a big roadblock to overcome.
Impermanent Loss:
Just like any other DEX SushiSwap liquidity providers can face loss of funds whenever the ratio of tokens inside the liquidity pools become uneven. Though the problem is addressed by pairing the tokens with a stable currency i.e stablecoins the chances of exposure are still open.
SushiSwap Crypto Price:
Please check the latest SushiSwap Crypto Coin price, shared below –
Sushi Coin Price Prediction:
SushiSwap has its fair share of rise and fall. From a rough and rocky start, it has turned into a promising project of the future. It was one of the quickest coins to be listed on the top exchanges like Binance and Coinbase within weeks after going live with its protocol.
Early investors enjoyed the joy ride when the price hit the $12 mark days after SUSHI went live. However, the party didn’t last long and the price fell back to $6 followed by a mega crash that further pushed the price down to $1 amid the uncertain future after the infamous Chef Nomi $14 million heist.
Fortunately, the stolen funds have been returned back to the exchange and the project development is in good hands. Being community-driven makes it more aligned with the philosophy of the crypto community.
With attractive incentives like staking and yield farming, SushiSwap is turning out to be an attractive investment. At the moment, everything looks upside and the project have picked up the pace by locking in over $5 billion worth in value.
Sushi is ranked among the top 3 DEXes by volume and has a high potential to surpass its ATH of $23. It may possibly end up in the range between $30 – $50 in the coming bull run.
Sushiswap Subgraph is live on The Graph Protocol
Where to Buy Sushi Coin?
Of course, SushiSwap is the first place to purchase SUSHI coin without worrying about the registration process. The next best place to purchase SUSHI tokens is on 1INCH, which is a DEX aggregator with its native 1INCH Coin and lastly on centralised exchanges like Binance, Coinbase etc.
Uniswap also facilitates the trade of SUSHI tokens on its platform. Subsequently, Wazirx exchange from India can be an alternative option to purchasing Sushi coins within India.
Is Sushi a Good Investment?
Decentralized exchanges are trading platforms of the future. It’s just a matter of time when the old centralized system will get replaced with DEX that offers better privacy, security and anonymity. All in one place.
If you’re a believer of the decentralised revolution which was started by Bitcoin and now expanded to decentralized exchanges like Uniswap, Pancakeswap Crypto and THORChain (rune Crypto). It is the right time to get into this space and invest in DEXes but only after understanding the complete functionality of these platforms.
If you think DEXes are just a temporary thing and will be replaced by better technology then it’s better to park your money on other blockchain projects. Currently, I am positive about SushiSwap and believe it has the potential to grow multifold in value. That’s my analysis, you have to do your own due diligence and plan your investment decisions accordingly.
This completes my review of SushiSwap crypto with Sushi coin price prediction. In the next posts, I will talk at length about Filecoin and the Sandbox crypto gaming project. If you’re a fan of blockchain technology then please do share this post on your social handles and educate everyone around you. Do remember to subscribe to my YouTube channel for more informative content, released every week.
DISCLAIMER:
Cryptocurrency is a highly volatile market. All the information shared in the post is for knowledge purpose only. By no means, it’s financial or investment advice. Readers are responsible for their own investment decisions and should only invest in cryptocurrency after proper research.
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Paras is a blockchain writer & video creator at Katoch Tubes. In his free time, he loves watching space exploration documentaries & Hollywood movies.
