SushiSwap is a popular Ethereum-based decentralized exchange that allows users to trade tokens, earn rewards through yield farming, and more.
Decentralized exchanges (DEXs) allow users to trade directly with each other without a centralized intermediary such as Coinbase and Binance. This means they can offer access to a wider range of cryptocurrency tokens and financial services than you’ll find on popular centralized exchanges, as well as allow trading without an intermediary or the need to provide identifying information.
SushiSwap has emerged as a popular competitor to the leading DEX, Uniswap, and that makes sense: it’s actually based on Uniswap’s code!
Although SushiSwap had a controversial and drama-filled launch, it has since stabilized and now boasts a polished design as well as a growing array of decentralized finance (DeFi) products and services such as yield farming, SUSHI token staking, lending, and new token offerings. owner. Take a look at its variable history and SUSHI coin as well as how to become a “DeFi chief” with SushiSwap.
What is SushiSwap (SUSHI)?
SushiSwap is an Ethereum-based decentralized exchange that allows you to trade a wide variety of tokens and participate in other financial services. It has no central authority or intermediaries. Instead, it relies on smart contracts (or code that automates processes) and liquidity provided by other users to complete transactions. SushiSwap is similar to Uniswap, which runs on Ethereum alongside PancakeSwap based on Binance Smart Chain.
History of SushiSwap
SushiSwap was launched in August 2020 and quickly sparked controversy. Nicknamed creator Chef Nomi and his collaborators copied (or forked) the open source code from Uniswap, but made one important change: the addition of SUSHI, a management token that users can buy and earn to have a say in the future.
With this notable change, SushiSwap wanted to crush Uniswap and take the throne as the most popular Ethereum DEX. The creators devised a “vampire mining” scheme to drain liquidity from Uniswap through incentives: by providing SUSHI in exchange for users’ Uniswap liquidity pool (LP) tokens. These LP tokens will then be exchanged for the original assets put into Uniswap liquidity pools, thus creating liquidity for SushiSwap instead.
Chief Nomi has raised nearly $14 million worth of SUSHI cash in Uniswap, one of the DEX’s Ethereum developer funds. The price of SUSHI dropped and Nomi was attacked by users who thought they were scamming the newly formed SushiSwap community.
Nomi reversed course and returned the funds and eventually decided to withdraw from SushiSwap. Control of the project was given to Sam Bankman-Fried, president of Alameda Research and central derivatives trading platform FTX, who oversaw the successful completion of the vampire mining campaign. He then handed control over to a large number of trusted community members, ensuring the decentralized future of SushiSwap. For the convenience of users, SushiSwap has experienced much less turbulent operation since then.
SushiSwapHow Does SushiSwap Work?
Like Uniswap, SushiSwap is built on an automated market maker (AMM) system that uses the aforementioned smart contracts to complete transactions. Tokens are provided by other users through liquidity pools. Other SushiSwap users lock their funds in pairs of coins into these pools, which provide the funds needed to complete the swaps. These users are then rewarded with a small percentage of fees generated by the artisans, a process called yield farming.
Beyond token swaps, SushiSwap offers other DeFi features such as sharing SUSHI tokens on the network and earning rewards, as well as participating in lending services and purchasing newly introduced token DeFi startups through the MISO service.
Do you know?
The SushiSwap community provides a tremendous amount of liquidity: over $3 billion in 1,300+ coin pairs as of this writing.
What Makes It Special?
Even though SushiSwap started with Uniswap’s codebase, it has made significant changes to differentiate itself from its inspiration (and competitor). The SUSHI token was a DeFi innovation that led Uniswap to take a similar approach and not only provides users with an additional means of generating rewards, but also has a say in the future of DEX.
Also, while Uniswap has increased its venture capital funding and has a core, centralized development team, SushiSwap’s decentralized, community-centric values extend beyond the DEX.
How to Make Your First Trade on SushiSwap
As with other DEXs, you will need a crypto wallet such as MetaMask, WalletConnect or Lattice to use SushiSwap. It also works with the Coinbase Wallet, which does not require an account on the central Coinbase exchange. Unlike centralized exchanges, SushiSwap does not allow you to open an account or provide credentials; you only need one wallet. However, you cannot use a debit card or bank account to purchase crypto with fiat currency on SushiSwap.
After logging in with a wallet, go to the “Swap” feature in SushiSwap and choose which cryptocurrency (like Ethereum) you want to exchange in your wallet and which coin you want to exchange. SushiSwap allows anyone to create a trading pair and create a liquidity pool, so it supports a wide variety of Ethereum-based tokens and other coins packaged for use on Ethereum.
After choosing which coins to trade, enter the amount of coins you want to trade and SushiSwap will tell you how much tokens you will receive in return. If you are satisfied with the exchange rate, click the rainbow-colored Swap button to execute the transaction. The transaction may take a few minutes to complete, but if successful, the new tokens will appear in your wallet.
Where and How to Buy SUSHI?
Of course you can trade for SUSHI at SushiSwap or even Uniswap. But if you prefer to buy SUSHI tokens elsewhere and then bring them to SushiSwap, you can do that too. SUSHI tokens can be purchased from a wide variety of exchanges, including Coinbase, Binance, FTX, and Huobi Global.
How Staking Works What is xSUSH?
SushiSwap allows you to deposit (or lock) your SUSHI tokens into the net to earn incremental rewards over time. According to DEX, 0.05% of total exchange fees are redistributed to users in proportion to the amount of SUSHI they stake. When you stake your SUSHI, you will receive xSUSHI for holding. xSUSHI gives you votes and consolidates your rewards over time. When you get your funds back, you get back your original SUSHI amount plus how much more you earned as a reward, minus fees.
The Future of SushiSwap
Although SushiSwap has suddenly emerged to challenge the dominant Uniswap, the DEX market is not static. Uniswap, for example, continues to iterate on its concept and released the v3 DEX in May 2021. Also, DEXs are starting to gain traction on other blockchains besides Ethereum, particularly PancakeSwap and BurgerSwap on the Binance Smart Chain.
SushiSwap has expanded significantly since its contentious launch and powertrain, introducing new features such as BentoBox, a platform on which additional DeFi services can be built. The app has also seen a major visual and interface overhaul that is much more polished and easier to understand, and has been moved to the simpler sushi.com URL.
Like other Ethereum-based apps and platforms, SushiSwap has seen increased gas and transaction fees due to high network congestion. Accordingly, SushiSwap is now expanding to other blockchains and adopting tier 2 scaling solutions to minimize fees and speed up transaction confirmations.
SushiSwap has released a version of the DEX on the Polygon (formerly Matic) blockchain, creating a bridge that allows users to move Ethereum assets back and forth between the two DEXs.
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