What is SushiSwap?
SushiSwap is a popular Ethereum-based decentralized exchange (DEX) that allows users to swap tokens, earn rewards via yield farming, and more. It was forked from leading DEX Uniswap, which it initially drained liquidity from via a process called “vampire mining.”
SushiSwap has emerged as a popular rival to the leading DEX, Uniswap, which 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 sports a polished design, plus a growing array of decentralized finance (DeFi) products and services such as yield farming, SUSHI token staking, lending, and new token offerings. Here’s how to become a “DeFi chef” with SushiSwap, plus a look at its volatile history and the SUSHI token.
The history of SushiSwap
SushiSwap launched in August 2020 and quickly ran into controversy. The pseudonymous creator Chef Nomi and his collaborators copied (or forked) the open-source code from Uniswap, but made a key change: the addition of a governance token, SUSHI, which users could buy and earn to have a say in the future of the DEX.
Along with that notable change, SushiSwap wanted to crush Uniswap and take its throne as the most popular Ethereum DEX. The creators devised a “vampire mining” scheme to drain liquidity out of Uniswap via incentives: by providing SUSHI in exchange for users’ Uniswap liquidity pool (LP) tokens. Those LP tokens would then be exchanged for the original assets put into the Uniswap liquidity pools, thus creating liquidity for SushiSwap instead.
Nearly a quarter of the sentiments of all tweets expresses a positive public opinion about the SushiSwap . Among the 8 basic emotions, top, great, enjoy and good were the two prominent positive emotions observed in the tweets.
Advantages of SushiSwap
The main advantages to SushiSwap are the ability to yield farm and earn a high yearly interest rate, lend and borrow assets against collateral with either interest received or a small amount of interest owed, and make swaps of hundreds of available digital assets that have pools on SushiSwap.
The yield farming is what draws in most users to AMM/DEX platforms like SushiSwap, Uniswap, and PancakeSwap, as it provides users with extremely high returns on their investment. However, the SUSHI staking option on SushiSwap provides users with a stable return with no risk of impermanent loss, and this is currently not available on Uniswap.
The twitter was less negative about SushiSwap. Among the 8 basic emotions, suffer, hard, and behind were the top negative emotions.
Disadvantages of SushiSwap
The only real disadvantages to SushiSwap at this point are impermanent loss and if you are less bullish on SUSHI than ETH, because it you use SushiSwap, 0.05% of the 0.3% fees you receive will be in SUSHI, whereas on Uniswap the entirety of the 0.3% fee portion you receive is in ETH. Otherwise, the platforms are essentially the same in terms of security and asset availability. Impermanent loss happens with all liquidity pools and is the trade off for receiving the fees, as long as the fees you receive outweigh the lost profit on your supplied assets, the trade off is worthwhile.
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.