SushiSwap was born as the field of Decentralized Finance (DeFi) developed, more and more new financial platforms have been and continue to appear. In it, Uniswap has affirmed its position as one of the core DeFi protocols. However, despite being decentralized and highly dependent on Smart contracts, users do not seem to have much of a say when it comes to its development direction.
SushiSwap, a new protocol entering the field, promises to change that. In this article, we will discuss SushiSwap, an offshoot of Uniswap that is rapidly dominating the cryptocurrency market.
What is SushiSwap?
SushiSwap is a decentralized cryptocurrency exchange built on the Ethereum blockchain. It was born with the aim of improving the Uniswap platform (the most popular Ethereum-based DEX in the crypto market today).
In terms of form and function, SushiSwap is basically identical to Uniswap and is also considered a fork version of Uniswap, it is a decentralized exchange protocol built on the Ethereum blockchain platform, without using an order book (Order book). Instead, the platform uses an “Automated Market Maker” (AMM) model, where liquidity providers pour money into Liquidity Pools for traders to trade. From there, the liquidity provider receives the fees for their services.
How does it works?
Like Uniswap, SushiSwap is a decentralized exchange protocol that does not rely on the Order book model. Instead, it uses a so-called Automated Market Making model, where liquidity providers (LPs) pour money into Liquidity Pools. SushiSwap is a fork of Uniswap and the biggest difference is the SUSHI token. If Uniswap has no native token, no revenue, no reward mechanism for contributors, SushiSwap owns all of the above.
SushiSwap has its own token, its own purpose to operate the system and share profits from SushiSwap.
What problem does SushiSwap solve?
The problem encountered here is the unequal benefits between the Liquidity Providers.
Like Uniswap, Liquidity Providers only profit from the transaction fees of the pool they are providing liquidity to. Once they have withdrawn all the money in the Pool, they will no longer receive any income from it. In addition, when the Pool is larger, even though the Liquidity Provider joins early, their profits will decrease when there are more Liquidity Providers such as venture funds, exchanges, etc.
What is the solution of SushiSwap (SUSHI)?
Instead of using ETH Token like Uniswap, SushiSwap uses its own token, SUSHI. You can completely earn SUSHI through providing liquidity for a certain number of Pools, a part of the motivation from the liquidity pools will be divided among SUSHI Holders. Unlike Uniswap, SUSHI allows users to continue earning from a portion of SushiSwap’s fees, even if you decide not to participate in the liquidity provider anymore. If you are an early participant in providing liquidity on SushiSwap, you may have more opportunities to earn money on SushiSwap.
What is Token SUSHI?
SUSHI is the native token in SushiSwap that is used for the following purposes:
- Governance: SUSHI token holders have the right to vote on changes or upgrades in the protocol.
- Revenue share: with SushiSwap, 0.25% of all transaction fees in the pool will go directly to Liquidity Providers, 0.05% will be converted to Sushi token holders. (In Uniswap, the figure is 0.3% of the fee from the pool will be deducted for LPs)
- Token SUSHI is also rewarded for Liquidity Mining in some Pools.
Information about SUSHI Token
- Name: SUSHI Token
- Symbol: SUSHI
- Blockchain: Ethereum
- Token Standard: ERC20 (Ethereum Request for Comment)
- The Contract Address: 0x6b3595068778dd592e39a122f4f5a5cf09c90fe2
- The Total Token Supply: 250.000.000 UNI
- The Current Circulating Supply: 127.244.443 SUSHI
- Market Capitallization: $516,438,984
Allocate SUSHI Tokens
SUSHI tokens are distributed to all liquidity providers for the protocol in the following stages:
Liquidity mining phase: For the first 100,000 blocks (about 2 weeks), 1000 SUSHI will be mined per block. Then distributed to those who stake Uniswap LP tokens in certain Pools.
Post-launch: after the launch and after the liquidity mining phase, 100 SUSHI will be minted per block. They will be distributed to those providing liquidity for the protocol. Then 10% of SUSHI mining is transferred to Dev team.
How to earn and own SUSHI Token
How to earn and own SUSHI Token?
Currently you can own SUSHI tokens by buying on listed exchanges like Binance, Huobi, OKex, FTX, etc. Also, you can join Liquidity Mining to earn SUSHI tokens. Token groups being supported Farming on SushiSwap:
- Stablecoin: USDC, USDT.
- DeFidollar: sUSD, DAI.
- Lending: LEND, COMP.
- Synthetic Assets: SNX, UMA.
- Oracles: BAND, LINK.
- Ponzinomics: AMPL, YFI.
- Delicacy (2x rewards): SUSHI.
In the first stage, 1,000 SUSHI will be minted (Minted) for each Block. Each Pool will receive 66.66 SUSHI, except Pool SUSHI which gets double that SUSHI. Then the minted SUSHI (Minted) will be distributed in proportion to the amount deposited in the Pool.
Farming on SushiSwap is also relatively simple, you just need to visit https://SushiSwap.org/ to select the Pool you want to farm, Add liquidity to the Pools and you’re done.
SUSHI Token Exchange: Binance, OKEx, Huobi Global, Coinbase, Uniswap, …
SUSHI Token Storage Wallet: Metamask, Myetherwallet, Trust Wallet, Atomic Wallet, …
Hope this article has given you the necessary knowledge.
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DISCLAIMER: The article is not calling for investment. Every decision is yours to decide.