SushiSwap (SUSHI)

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What is SushiSwap? Basic information

SushiSwap is a decentralized exchange - DEX embedded in Ethereum. It allows you to buy and sell virtual assets and, as befits decentralized software, it is operated by the users themselves. SushiSwap operates on principles similar to UniSwap, so for the stock exchange to function efficiently, it needs liquidity, which is collected in so-called liquidity pools.

DEX users place their assets on smart contracts, while traders buy and sell the currencies that are in the pools, swapping one asset for another. As a DeFi platform, SushiSwap allows users to trade assets in a relatively safe way, without central supervision, and all decisions related to the stock exchange are made by their currency holders - SUSHI, which means that every participant in the network has an impact on the operation of SushiSwap.

How does SushiSwap work?

The primary function of SushiSwap is to make it easier for users to exchange assets, so it works like a cryptocurrency exchange. However, the premise of DeFi is an escape from centralized entities that are necessary in the functioning of traditional exchanges. Therefore, the funds of SushiSwap users are protected by smart contracts, and traders have direct access to them. Asset traders obviously pay the appropriate fee, which goes directly to the liquidity providers.

SushiSwap farms

The liquidity providers' Ethereum wallets are directly linked to SushiSwap's farming software, where they place two different assets in a smart contract. This allows other users to exchange tokens from the pools based on the rules written in the protocol. SushiSwap charges a certain amount of tokens, while sending back the same amount, thanks to which it can maintain a constant cryptocurrency price. For providing the above-mentioned liquidity, users are rewarded in the form of native exchange tokens - SUSHI. Providers can withdraw funds deposited in a smart contract, as well as their payment at any time.

Sushi bar

Users can of course earn tokens through farming, but for those who would later like to locate their "crops" somewhere, another application called SushiBar was also created, which allows you to stack tokens.

Sushi - Token SushiSwap

As mentioned above, SushiSwap has its own currency - Sushi, which is a reward for providing liquidity to the stock exchange. Additionally, all its holders can participate in protocol management. The tokens entitle them to submit suggestions for improving the network and to vote.

SushiSwap and UniSwap

Like UniSwap, SushiSwap is a decentralized DeFi exchange. These protocols are very similar to each other, but we can find some differences between them.

In the case of UniSwap, liquidity providers earn a part of the fee that is charged to users, and its amount depends on the amount of funds deposited on the smart contract. On the other hand, in the case of SushiSwap, the amount of the payment depends on the moment of joining the liquidity provision. Users who deposited there earlier earn 10 times more than those who did so later.

Advantages of SushiSwap

SushiSwap allows users to earn their native tokens, which can later be exchanged for ETH, so providing liquidity on this platform can be quite profitable.

Moreover, this network does not follow the KYC policy. Therefore, anyone can provide liquidity without any unnecessary formalities.

Who created SushiSwap?

SushiSwap was created relatively recently, in 2020. The creators decided to remain anonymous, and publicly introduce themselves as Chef Nomi and 0xMaki.

On August 26, Chef Nomi shared a post on Medium in which he described the SushiSwap project while inviting users to join the community. This way 0xMaki joined SushiSwap on Discord, becoming one of the first users. Probably after many discussions and negotiations with the original creator, he was eventually appointed co-founder of the protocol.

Although Chef Nomi and 0xMaki do not officially disclose their personal information, there are many theories on the internet about their origin. In one interview, 0xMaki admitted that Chef Nomi is currently in Asia, and given his nickname (which came from Hearthstone - a card game mainly popular in China), it was considered probably Chinese. As for the co-creator of SushiSwap, he was betrayed by a French accent, as well as hints about his time zone. It has been established that it probably comes from France or another Central European country.

Although the online community has only officially known two pseudonymous SushiSwap developers, it is assumed that a total of around 5 developers worked on the project.

The history of SushiSwap

As mentioned above, SushiSwap was launched in 2020 by two anonymous developers. Their history is relatively short, but it does not lack exciting plot twists and controversies.

SushiSwap turned out to be a great success, and on September 6, 2020, $ 1.27 billion was already invested in sushi contracts.

The problem arose when it turned out that one of the creators of the network - Chef Nomi sold all his Sushi tokens worth $ 14 million, which led to a sharp drop, by over 50%, in their prices. Investors panicked, and many users announced SushiSwap as a scam intended only to generate profit. Chef Nomi, trying to alleviate this situation, handed over the leadership of the project to Sam Bankman-Fried - the director of FTX, which somewhat calmed the situation on the stock exchanges, but the internet continued to boil with negative comments directed at the SushiSwap creator.

Chef Nomi apologized to users, and on September 11, he returned all the funds he had taken back to SushiSwap. The original creator is no longer officially associated with the project.