What is SushiSwap?
- Essentially a forked version (clone) of Uniswap.
Some history of SushiSwap
- Sushiswap is undergoing a soft rebranding in naming to simply ‘Sushi.’
- SushiSwap was created in 2020 by a pseudonymous individual or group called Chef Nomi, along with co-founders sushiswap and 0xMaki.
- The founding team copied the open-source code used by Uniswap to create the foundation for SushiSwap.
- SushiSwap then attracted users by promising SUSHI token rewards if they locked up funds in a special pool on Uniswap. Once the code for Sushiswap was ready, the funds in that pool were transferred to SushiSwap.
- Before the funds were moved to SushiSwap, however, Chef Nomi shocked users by removing some $13 million in funds from the pool.
- Amid fears that Chef Nomi had absconded with these funds, the pseudonymous founder gave control of SushiSwap to Sam Bankman-Fried, the head of a cryptocurrencies derivative trading firm called Almeda Research.
- Several days later, Chef Nomi returned the liquidated funds to the pool and apologized to users. The locked funds were then moved as planned, with Bankman-Fried overseeing the process.
Difference between Uniswap and SushiSwap
- The critical difference between the two comes down to tokenomics. When SushiSwap's creator Chef Nomi forked Uniswap, his reason for doing so was to introduce the SUSHI token as an additional reward for liquidity providers and farmers.
- So, while everything works exactly the same on SushiSwap as it does on Uniswap, the key differences are:
- SushiSwap rewards liquidity providers with 0.25% of pool fees + 0.05% paid to SUSHI token holders.
- While Uniswap closed its UNI token farming period, SUSHI yield farming remains alive and well, with rewards in some pools reaching as high as 80% APY.
- A very different UI experience. SushiSwap poses as a menu at a Japanese restaurant, with options like Onsen Menu and Omakase standing in place of Uniswap's very streamlined app page.
Besides these differences relating to how rewards are generated and slight usability differences, SushiSwap and Uniswap are quite similar.
Which exchange is better? SushiSwap or Uniswap?
- Ultimately, whether you'll side with SushiSwap or Uniswap has everything to do with how you want to earn rewards from your exchange.
- Uniswap pays higher fees to liquidity providers (0.3% vs. 0.25% SushiSwap), but SushiSwap throws in an additional 0.05% paid to SUSHI holders. The latter thus incentivizes holding SUSHI, while the former pays LPs
- However, the exchange experience is smoother, cleaner, and far more straightforward using the Uniswap app. SushiSwap's Japanese izakaya experience is novel but ultimately clutters the exchange's interface.
- In the battle between Sushi and Uni, Uniswap comes out on top for traders, liquidity providers, and the crypto-curious. On the other hand, yield farmers will migrate to SushiSwap's juicy APY opportunities.
Why use Sushi?
- Traders may find SushiSwap appealing based on its ability to provide access to newer and less liquid cryptocurrencies not available on more traditional exchanges.
- Investors may wish to add SUSHI to their portfolio should they believe decentralized exchanges will continue to attract users who want to benefit from a trading environment without needing to entrust funds to a third-party.
- Lastly, SUSHI may also be of interest to investors who seek to access a wide range of projects built on the Ethereum blockchain.