About Sushiswap
Sushiswap was created by a fork of Uniswap, so it’s basically a copy of the latter but it has some differences. In fact, Sushiswap, since the foundation, had a governance token (SUSHI) and also the possibility of making liquidity mining, features that Uniswap at the same time didn’t already have. The goal of Sushiswap was clear: defeating Uniswap. Therefore the Sushiswap founders did everything possible to persuade users to migrate from Uniswap, they even created a migration page to move funds from Uniswap(a page that still exists). They gave many incentives to the users that left Uniswap and some of them decided to migrate, this event although had a limited impact on Uniswap. Sushiwap didn’t manage to defeat the famous exchange, nevertheless, today is one of the most used DEX. It has nearly 4 billion dollars in total liquidity, a total volume of over 100 billion dollars, and almost 2k token pairs to trade.
QUICK FACT
Sushiswap was born to destroy Uniswap, and he was created from a fork of the latter
How does Sushiswap work?
Sushiswap works like every other decentralized exchange. It isn’t controlled by a central authority and you don’t need to share your personal information to use it. Another difference with centralized exchange is that it doesn’t use an order book to determine the price of a cryptocurrency but an automated market maker system (AMM).
SUSHI Token
SUSHI is the governance token of Sushiswap. It was launched with the entire platform. It’s in the top 100 cryptocurrencies in the world by market capitalization. Initially, it had an infinite supply but today a supply of 250 million SUSHI has been fixed. There are over 230 million circulating and it will probably reach the maximum supply in November 2023. When it was created, for every block there was a reward of 1000 SUSHI, now the reward has been reduced to just 100 SUSHI.
How to use Sushiswap?
Sushiswap is very easy to use if you have some experience with other DEX. If you have never used a decentralized exchange, it could be a little tricky, but with my tutorial, it will also be easy for you. Go to https://app.sushi.com/swap and click on “Connect to a wallet”. There are 9 available wallets such as Metamask, Coinbase, and Binance. Select one of them and log in to it. Now you are able to swap your tokens with the hundreds of crypto supported by Sushiswap.
Sushiswap Features
Now that you are able to use the swap section of Sushiswap, I am going to present many other features that this platform has.
Pool
On Sushiswap you can provide liquidity to a pool in order to receive an interest. To join a pool you have to send an amount divided equally into two different tokens. For example, you can send 1 ETH and an equivalent of 1 ETH in ADA.
Then you will earn a 0.25% fee on all trades proportional to your share of the pool. If you own 1% of the pool, you will receive a 1% of those fees.
Farm
On the farm section of the website, you can deposit a pair of coins in a farm to receive an interest in SUSHI. There are many farms available and you can choose the one that gives the best interest. The most popular farms distribute hundreds of SUSHI every day as a reward.
Lend
This section is a peculiar characteristic of Sushiswap, it’s one of the few DEX to have it. You can lend some of your cryptos in the lending page to other users, and by doing so you will receive an annual interest of between 10 and 20%. You can lend for example some Tether to receive an interest of 16% in Ethereum.
Borrow
Obviously, you can also borrow some coins from other users and use them, for example, to do margin trading. There is a very large number of cryptos available but in order to borrow them, you always have to deposit a collateral. You have then to pay an annual fee on the borrowed money until you give them back.
Differences with Uniswap
Sushiswap was born to destroy Uniswap, and he was created from a fork of the latter. So their code is essentially the same, Sushiswap is a copy of Uniswap, but, nevertheless, there are a few differences between them. Sushiswap has some features such as lending and borrowing that Uniswap doesn’t have. However Uniswap is a larger platform, it has more liquidity, and also UNI is far larger than SUSHI. So Uniswap is less risky.
Conclusion
Sushiswap is a great platform. It’s one of the 3 most famous DEX, it’s very easy to use and has a lot of tokens to trade. It has some features that other DEX don’t have. So if you want to use them Sushiswap is a great choice for you. Otherwise, if you aren’t interested in using features like lending and borrowing, it may be better to use Uniswap or Pancakeswap, two platforms more solid and safe.