SushiSwap is a multichain decentralized exchange (DEX) protocol where traders can swap their crypto assets in a permissionless way.
It runs on Automated Market Maker (AMM) smart contracts, with liquidity provided by assets deposited from users.
SushiSwap is an advanced fork of Uniswap, which is another popular DEX running the same type of smart contract system.
What differentiates SushiSwap is that it introduced a native token (SUSHI) right from its launch, allowing holders to have voting rights in the network, as well as rights to a portion of trading fees generated by the protocol.
How does SushiSwap work?
SushiSwap is popular mainly due to its large selection of liquidity pools, making it one of the few decentralized exchanges that can rival centralized trading platforms in liquidity.
It’s also available across many blockchain platforms, including Ethereum, Avalanche, Harmony, and Binance Smart Chain.
SushiSwap stays ahead of the competition by continuously innovating with new financial products and features such as Onsen, BentoBox, Miso, Kashi, Trident AMM, and Mochi, evolving it into more than just a token swap platform.
What is the SUSHI token?
SushiSwap’s native token, SUSHI, enables holders to participate in network governance and earn yield from swapping fees generated by the platform.
To do this, a holder would stake their SUSHI to the platform and receive the equivalent value back in xSUSHI tokens. xSUSHI acts as a receipt that continually accrues value in SUSHI tokens (due to swap fee distribution), and gives users the ability to vote on protocol changes.
SUSHI and xSUSHI holders can also pair up their tokens with other crypto assets and deposit the pair into a liquidity pool (i.e. become liquidity providers or LPs).
In return, LPs get a percentage of the trading fees proportional to their contribution. The rewards are usually paid in SUSHI tokens but are also sometimes paid in the deposit tokens as well.
These tokens locked in liquidity pools can also be allocated to the platform’s borrow-lending protocols, which can be another source of extra revenue for SUSHI holders.
Team Background
SushiSwap was created by a developer under the pseudonym “Chef Nomi” before former FTX CEO Sam Bankman-Fried took over the project.
Later on, the developer reins were handed over to nine community members, led by “Sushi Chef” 0xMaki, when they introduced the fully decentralized SushiSwap exchange.
The project is also partnered with Yearn Finance creator Andre Cronje and is part of the Yearn Finance ecosystem. Cronje is the chairperson of the Technology Council of Fantom Foundation and has collaborated with crypto companies like Aave and Curve Finance.
Notable Investors: Defiance Capital, Delphi Digital
Token Metrics:
- Holders addresses: 102K on Ethereum, 945 on Solana, 2.2K on Fantom, 1K on Avalanche
- Circulating supply: 192 million, Liquid supply at 240 million
- Maximum supply: 250 million (expected to reach in November 2023)
- Token supply is currently inflationary (3.76%), but at a decreasing issuance rate until max supply reached