What is Sushi?
Want to learn more about SUSHI? Grab your chopsticks and enjoy the read!
What is SushiSwap?
If you're interested in becoming a "DeFi chef", SushiSwap claims to be the go-to place.
This decentralised platform that is driven by its community launched in September 2020 as a fork of Uniswap. On it, users can trade, earn, stack yields, lend, borrow, and leverage, making SushiSwap a true DeFi hub and one of the biggest DEXs in the Ethereum ecosystem.
Like its predecessor Uniswap, SushiSwap is an AMM, meaning that no intermediary is necessary for SushiSwap users to trade crypto assets.
As AMMs are not anything new or unique, SushiSwap does its best to bring new features to the AMM market, including increased rewards for network participants through its SUSHI token.
This effort to make itself stand out has paid off for SushiSwap, as it currently boasts a large community as well a transaction volume and total value locked (TVL) close to or even higher than Uniswap's.
The origins of SushiSwap
As one could imagine, the launch of SushiSwap was quite a controversial event in the crypto world. Still, the platform garnered an impressive TVL within the first two weeks.
The fact that SushiSwap was essentially a carbon copy of Uniswap with the same source code raised some eyebrows. But the concern did not stop there.
Chef Nomi, the creator of SushiSwap, kept a large number of SUSHI tokens in his possession from the start of the platform, leading many to question his intentions and think of SushiSwap as a potential scam. To make things worse, he later transferred the project to FTX and withdrew 14 million dollars, only to return it all to the SushiSwap treasury.
He then asked the community to decide how much he deserved as the creator of SushiSwap and eventually stepped away from the project.
Sushiswap and 0xMaki are pseudonymous of two others considered to be the platform's co-founders in charge of code, product development and business operations.
At the moment, de facto ownership of SushiSwap is in the hands of Sam Bankman-Fried, the CEO of FTX and Alameda Research.
How SushiSwap works
By leveraging smart contracts, SushiSwap is able to provide liquidity pools through which users can trade crypto assets directly without getting an intermediary involved.
The beauty of AMMs such as SushiSwap and what makes them better than traditional decentralised exchanges is the fact that they get rid of order books entirely. That being said, SushiSwap is not your regular AMM, as it gives users more impact on the functioning and future of the platform.
Users can become liquidity providers and receive rewards by sending equal-value amounts of two cryptocurrencies to SushiSwap.
SushiSwap generates SUSHI and SUSHI Liquidity Pool tokens and then distributes them to liquidity providers along with the mentioned rewards.
To encourage users to participate in liquidity pools, SushiSwap also allows them to deposit SUSHI Liquidity Pool tokens into yield farms and thus earn even more rewards.
For any transaction in the liquidity pool, a 0.3% fee is taken, of which 0.25% goes to the liquidity providers in SUSHI.
All in all, SushiSwap seems to be putting great effort into providing its main audience, DeFi traders and associated entities, with what they seek to capitalise on the boom in project tokens and create liquidity.
The SUSHI token
Powering SushiSwap is SUSHI, an ERC-20 token. This token gives its holders a chance to participate in governing the community and staking.
The token had no premine, and its minting began at Ethereum block number 10,750,000.
SUSHI's supply depends on the block rate, with the maximum supply of SUSHI being 250,000,000.
At the time of writing, SUSHI ranks as #150, has a market cap of $150,833,046 and a circulating supply of 127,244,443 SUSHI.