These days there is usually an old currency behind every new digital currency. A classic example is when the bitcoin cache was separated from the bitcoin. In the volatile and dynamic world of DeFi (Decentralized Finance), consider SushiSwap Fork Uniswap, one of the largest and most valuable decentralized digital currency exchanges. SushiSwap is one of the fastest and most exciting types of digital currencies.

What is SushiSwap?

SushiSwap is software that runs on the Ethereum network and seeks to encourage a network of users to use a platform where users can buy and sell encrypted assets. Similar to platforms such as Uniswap and Balancer, SushiSwap uses a set of liquidity pools to achieve this goal. Users first lock assets in smart contracts, and traders then buy and sell cryptocurrencies from these pools and exchange one token for another.

SushiSwap is one of a growing number of Decentralized Financial Platforms (DeFi) that allows users to trade digital currencies without the need for a central operator. This means that its original digital currency holder, SUSHI, decides on SushiSwap software. Anyone with an asset balance can make changes to the way it works and can vote on suggestions made by other users.

How does SushiSwap (SUSHI) work?

SushiSwap is a platform that allows users to buy and sell various digital currencies. The fee for each swap is 0.3%, of which 0.25% is paid to liquidity providers and 0.05% to SUSHI and given to SUSHI token holders.

This automated market making (AMM) platform as mentioned earlier, acts as a decentralized exchange. There is no central reference or grammar. SushiSwap digital currency trading is done using smart contracts in liquidity pools. SushiSwap customers become liquidity providers (LPs) by locking their encrypted assets into a liquidity pool. At SushiSwap, anyone can provide cash and incentives commensurate with their share of the pool. This is done by placing two tokens of equal value in the pool. Each pool acts as a marketplace where other users can buy and sell tokens. For a more complete explanation of how AMM works in DEX protocols, read our Uniswap page.

You can exchange ERC-20 tokens in SushiSwap like any other DEX protocol. For instance, stable coins such as USDT and BUSD can be converted to digital currencies such as Bitcoin (BTC) and Ethereum (ETH). You can also generate passive cash by participating in other sushi operations. For example, you can share SUSHI and get xSUSHI in SushiBar. Holders of xSUSHI staked can receive 0.05% bonus on all transactions from all cash pools. Sushi holders who invest their tokens in xSUSHI can earn 2.5% of every NFT transaction in the NFT market after the release of Shoyu.

Bentobox SushiSwap is another way to get motivated. This unique treasury enables customers to take advantage of all of SushiSwap’s lucrative options. This means that by storing your assets in BentoBox, you can earn money both by owning shares in SushiBar and by lending them to other users. At the same time, xSUSHI cardholders can benefit from the transaction fee collected by Bentbox.

Who are the founders of SushiSwap (SUSHI)?

Chef Nomi and 0xMaki (alias) founded SushiSwap in August 2020. Aside from their Twitter identities, there is little information about the two. The project attracted a large number of users immediately after launch and was listed on Binance on September 1, 2020.

Sam Bankman-Fried, CEO of FTX Derivatives Exchange and small trading company Alameda Research, seized real ownership of SushiSwap on September 6 and transferred the tokens from Uniswap to the SushiSwap platform on September 9.

Bankman-Fried joined Jane Street Capital, a small business, after graduating from MIT with a degree in physics, where she first encountered digital currencies. Sam Bankman-Fried is a well-known figure in the world of digital currencies and was first associated with SushiSwap when the SUSHI token was listed on the FTX Derivatives Exchange.

What makes SushiSwap (SUSHI) different?

SushiSwap distinguishes itself from traditional decentralized exchanges as an automated market making (AMM) by eliminating order books while avoiding liquidity problems. SushiSwap, like its parent company AMM Uniswap and others, has done several important tricks to increase the impact of network participants on the company’s future.

The fate of SushiSwap is completely under the control of SUSHI holders. SUSHI users can vote on protocol improvement proposals, determine cost structures, vote on new liquidity pools, and jointly fund sushi-related projects.

Some Uniswap consumers were unhappy with what they thought was a low liquidity provider fee. The platform’s interaction with venture capitalists and the decentralization of Uniswap governance were also criticized.

The introduction of the SUSHI token was one of the key innovations of SushiSwap. SUSHI tokens allow LPs to receive incentives, however, unlike Uniswap, they allow holders to receive a percentage of the fee long after the liquidity has stopped actively.

In addition, digital currency addresses the issue of Uniswap decentralization by granting sovereign rights to sushi holders. SushiSwap took a similar approach to distribution and opted for “fair startups”, which means not assigning passwords to venture capitalists.

Sushi tokens

Sushi tokens are given as a reward for extracting liquidity. This token allows its holders to participate in the management of the platform and gives them the right to receive part of the costs paid to the protocol by traders. To manage the platform, SUSHI holders can submit a SIP Improvement Swipe offer that token holders can vote on with their tokens.

Of course, some people are also speculating about the price of sushi, and the tokens can be traded in large exchanges such as Binance, FTX and OKEx.

By March 2021, approximately 140 million sushi will be in circulation, for a total supply of approximately 205 million sushi, which will grow at the rate of the Ethereum block. According to the strategy, according to this strategy, the daily supply of sushi will increase by 650,000 machines, bringing the total supply to 326.6 million one year after launch and close to 600 million sushi after two years. Shortly afterwards, the SUSHI community voted to gradually limit the number of sushi produced per block by 2023, when the maximum sushi supply will reach 250 million.

Advantages and disadvantages of sushi

Pros:

• Extensive support for large exchanges. Since the launch of SushiSwap, its token has been widely endorsed by some of DeFi’s original letters: Binance and Huobi listed the token a few days after its release.
• Privileges for loyal users. SUSHI sponsors will be paid a share of the SushiSwap transaction fee. The platform’s liquidity providers (LPs) receive free sushi to support themselves.
• Fair playground. A decentralized, community-based and anonymous platform provides potential fair play for farmers and agricultural traders.

Cons:

Suspicious ethics

SushiSwap’s move to emulate Uniswap and turn its project into a strong competitor to the mainstream platform has significantly disappointed its former teammates. The decision to copy Uniswap was by no means illegal, but it did affect SushiSwap’s reputation in several ways.

There is no audit yet

As of September 2020, SushiSwap remains unaudited. The team wrote open invitations to Trail of Bits, PeckShield, OpenZeppelin, Consensys, Certik and Quantstamp to review contracts, but received no response.

Anonymous Development Team

Given that anonymous developers while not being audited run SushiSwap, depositing funds into their smart contract can be a big risk.

Controversy – Stubborn argument

In early September 2020, Chef Nomi cashed in a quarter of the project’s development capital – more than $13 million – without notice. Understandably, the news shocked the crypto community, leading to allegations of fraud and a significant drop in the price of sushi. A few days later, Chef Nomi sent the keys to the project to SushiSwap shareholder Sam Bankman-Fried, who is still in charge of the project.

SushiSwap structure and economic model

DEX SushiSwap is powered by AMM mechanism. Anyone can become a liquidity provider (LP) on the SushiSwap platform by depositing assets into a liquidity pool. Instead, users will receive SushiSwap Liquidity Provider (SLP) tokens. SLP tokens represent the proportionate ownership of the liquidity pool for which the asset provider provides. They can be redeemed at any time for the initial deposited assets.

Anyone can use SushiSwap user web applications to exchange tokens in SushiSwap DEX with a simple user interface. When exchanging tokens, 0.3% commission is received, of which 0.25% goes back to the liquidity pool. This means that as more transactions take place, the total supply of tokens in each pool gradually increases, so does the value of SLP tokens, which indicate the proportional ownership of the liquidity pool itself. This process of generating returns is an incentive for liquidity providers to facilitate liquidity in the SushiSwap platform.

The remaining 0.05% of the SushiSwap exchange fee contributes to the platform’s stock mechanism, SushiBar, and provides another opportunity for platform users to produce a product. SushiBar allows users to share native SUSHI tokens in exchange for xSUSHI, a separate asset that increases with a 0.05% dividend on the exchange platform fee. This allows SushiSwap users to generate returns even when they are not actively providing liquidity to the pools. This is in contrast to the Uniswap structure, which pays LPs all 0.3% of transaction costs.

The SushiBar stacking is as follows: 0.05% exchange fee is collected in the form of SLP tokens for the relative pool and a bonus is deposited in a smart contract. The reward contract is called up at least once a day and all SLP tokens are sold to SUSHI. The newly purchased SUSHI is then distributed to xSUSHI holders in the SushiBar pool as a betting bonus, meaning that their xSUSHI is now worth more sushi than when they deposited it.

Users can also participate in another layer of crop farming. You can deposit the SLP tokens you received from being an LP into the various “farms” that generate SUSHI rewards with each new block. When users generate these agricultural bonuses, two-thirds of SUSHI is allocated for six months from the time SUSHI was acquired. In other words, users can receive LP rewards for betting on digital assets in exchange for LP tokens, and they can win more prizes by placing LP tokens. This “virtuous cycle” networking approach is a popular DeFi strategy.

In a nutshell

If nothing else, SushiSwap is an impressive and ambitious experiment based on a very successful DeFi-Uniswap protocol. Added social governance, high rewards and benefits for sponsors is what sets it apart from the project from which it originally originated. SushiSwap, on the other hand, is not yet an audited project. The developer of SUSHI got into a serious argument by selling all his SUSHI tokens to ETH before jumping off the ship. Users can never feel completely safe investing and supporting an uncontrolled and unstable project.