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SushiSwap ReviewExchange
Withdrawal fee: 0.00 Taker fee: 0.30% Maker fee: 0.30% |
SushiSwap is a next-gen DEX and automated market maker (AMM) running on Ethereum. It has taken the world by storm, serving as an alternative fork to Uniswap and introducing a clever sushi-based theme that aims to make crypto trading more interactive and fun.
The founders of the protocol are anonymous, best known as 0xMaki and Chef Nomi. On August 26th 2020, Chef Nomi published a Medium article that highlighted and explained SushiSwap in great detail. This was when the project took off, locking in over $1 billion in assets within its first week of existence.
Now one of the highest DEXes by volume, it rivals Uniswap and other major exchanges and is continuing to grow faster by the day.
SushiSwap Fees
Trading Fees
Users incur a 0.3% fee when they trade on the exchange. This fee is charged directly by SushiSwap, and the Ethereum gas fees are charged separately from the Ethereum wallet used to interact with the platform.
Withdrawal fees
Currently, SushiSwap does not directly charge any withdrawal fees. As the tokens are held in the users Ethereum wallet, gas fees would be charged if the user wanted to send the funds to an external wallet.
Trading View
On the main SushiSwap analytics page, there is a comprehensive overview of key information regarding the exchange. Users can view statistics and price graphs of the total liquidity and volume within a specified range, as well as the reward pools below.
To the left of this page is an options menu, allowing users to view token pairs, top coin gainers/losers, pools, portfolio, and more.
Swap
The interface is designed to be as easy to use as possible. The easy to navigate sidebar on the left, coupled with the intricate and beautiful design of the page, make it appealing and fun to use. As seen in the below image, you can either swap tokens directly or add to liquidity pools.
There is another trading view that looks nearly identical to Uniswap. As seen below, you have the ability to swap tokens and select between adding liquidity to pools or staking on the upper right.
Yield Farming and Liquidity Pools
Yield Farming
The exchange has a large variety of farms/liquidity pools to choose from. Below is an example of some farms with information such as the yield per $1000, ROI, and total liquidity:
Users can earn rewards from farming based on each new block from staking the SLP tokens. 2/3 of the rewards are vested for 6 months right from when they’re earned, so you will have more SUSHI available to you every 6 months that passes.
You can also select from a variety of different types of farms, such as permanent, Onsen, and the SushiBar for more options. Many of these farms have lucrative ROIs and incentives, but always do your due diligence before farming. Onsen pools, for example, contain new/upcoming and established projects to choose from.
Liquidity Pools
For liquidity pools, if you become a liquidity provider, you receive SLP (Sushiswap Liquidity Provider tokens), which represent a proportional share of the assets in the pool. This ensures that a user has the flexibility to withdraw their funds whenever they need to.
As a liquidity provider, you will earn rewards of 0.25% derived from a fee on all trades proportional to your share of the liquidity pool.
SushiSwap has also designed a creative way to increase liquidity for new tokens on their platform – this initiative is called the “Menu of the Week.” Around 7 days are allotted for users to stake SLP tokens for up to 10 new pools, and in return they are given very high yields as a reward.
The submissions for the menu are discussed on forums by the community, where people offer suggestions and then cast a vote for the top tokens of choice to be added.
SushiBar Staking (xSushi APY)
The SushiBar is where you can stake your SUSHI tokens in return for interest on your funds – the SUSHI tokens are staked for xSUSHI. The interface is below, displaying all of your statistics, APY information, and more.
SushiSwap Lite also offers you the opportunity to stake your SUSHI tokens and earn recurring income, in a much simpler manner. The xSUSHI tokens automatically earn fees of 0.05% of all swaps proportional to your total share of the SushiBar.
Supported Countries and Cryptos
Given the anonymity of the founders, it remains unknown where exactly SushiSwap was created. There are rumors that Chef Nomi resides somewhere in Asia, and 0xMaki could be in a French-speaking territory or country given his French accent. So, it is possible that it could have been created in any of these regions.
In regards to supported countries, users need not worry. SushiSwap is available to anyone with an internet connection and Ethereum wallet, as it is completely decentralized.
SushiSwap currently offers over 100 different ERC-20 token trading pairs on its platform, so there are plenty of options to select from when swapping or providing liquidity.
SUSHI Token
SUSHI is the main token that helps drive the exchange’s ecosystem. It is an ERC-20 token that you can stake in return for SLP, which can be used as governance to the platform.
SUSHI is available for purchase on SushiSwap, as well as many other major exchanges such as Binance and Coinbase.
Deposit and Withdrawal Methods
Depositing assets on the protocol can only be done through an Ethereum wallet – once you’ve connected your wallet, you can either trade, stake, or deposit your assets into a pool.
Withdrawing is done in a similar manner. If your tokens are staked or within a liquidity pool, you will need to withdraw them from the exchange back into your Ethereum wallet.
Migrating Uniswap v2 LP tokens
SushiSwap offers you the ability to easily transfer your liquidity from Uniswap to its platform within seconds. This is a nice feature if you’re looking to leverage the offerings on SushiSwap without having to go through the hassle of sending funds and utilizing addresses to do so. The SushiSwap Lite platform will allow you to migrate liquidity, as seen below.
Lending (BentoBox)
BentoBox is SushiSwap’s version of an advanced isolated pair lending solution. It aims to solve some of the issues associated with other popular lending platforms, such as Compound and Aave. BentoBox provides feature such as isolated lending pairs, flexible on and off-chain oracles, liquid interest rates, contracts created to work with low gas fees, and the ability for flash loans.
Limit Orders
SushiSwap sets itself apart from its competition even further by offering limit orders, a feature not often found on other AMMs. Limit orders are decentralized and contain both Orderbook and Settlement contracts in order to be implemented.
The OrderBook contract contains a record of the limit orders that users have requested.The Settlement contract actually swaps the tokens for the requested orders. Relayers then fill an order so they can meet the minimum price requirement based on the order. Once the order goes through, a 0.2% fee is provided to the relayer and xSUSHI holders as a reward.
How to use SushiSwap Exchange
There is no officially sign up process on SushiSwap, as it is completely decentralized and can be navigated and operated via an Ethereum Wallet, Some of the top wallets you can use to connect to the platform are MetaMask, Coinbase Wallet, and Portis.
Once you’ve reached the exchange homepage, go to the section of your choice and connect your Ethereum wallet. Make sure to approve SushiSwap to interact with your wallet before you proceed. From there, you can swap, farm, and more with your tokens. No further verification is required!
Security
Although SushiSwap operates well and is considered generally safe, there are a few security concerns to be aware of. In September 2020, Quantstamp conducted a security audit of the exchange and found a few issues.
Some of these concerns included errors allowing the same liquidity provider token being added multiple times, an issue allowing funds to be stolen from the platform if the owner’s private key was discovered, and a problem that could deplete the gas from its massUpdatePools.
Quantstamp noted that none of these issues or vulnerabilities were grave enough to redeploy the existing contacts, but advised users to stay cautious in general.
In September 2020, Chef Nomi sold all of his SUSHI tokens (worth around $6 million at the time) within 10 days of the project launched. There was tremendous backlash from the community, questioning the founders’ integrity and the security of the SushiSwap platform, considering the SUSHI token dumped rapidly after the sale.
Conclusion
SushiSwap has had a very interesting history, but has come a long way in regards to establishing itself as a true contender in the DeFi space. As of today, it’s an ERC-20 powerhouse that continues to innovate and provide great benefits to its users. Below we will explore the advantages and disadvantages of using the platform:
Pros
- Over 100 ERC-20 trading pairs
- Fun, sushi-based initiatives for swapping, farming, liquidity pools, etc.
- Easy-to-use platform, with a color and aesthetically pleasing design
Cons
- High gas fees (although this is an issue across all Ethereum-based AMMs)
- Can be somewhat complex for a new DeFi user
- Slight security concerns, although nothing too alarming
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