What is SushiSwap and How to Use This DeFi Platform

SushiSwap - The Complete DeFi Dapp Guide
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Here’s all you need to know about the multichain DeFi dapp

Dive headfirst into the world of DeFi with SushiSwap, a leading financial platform in Web3. With its fair share of past scandals, Sushi emerged in 2020 as a must-have tool for anyone exploring the crypto landscape – rising higher than Uniswap at some points. But how relevant is Sushi after its former chief was none other than the infamous SBF from FTX? Let us walk you through SushiSwap’s world today and its reputation and latest features. 


What is SushiSwap?

SushiSwap, birthed in 2020 as a derivative of Uniswap, is far more than a typical decentralized exchange (DEX). Unlike platforms with singular solutions, SushiSwap harmonizes a broad spectrum of decentralized markets and financial instruments, setting the stage for a comprehensive DeFi experience.

How to use SushiSwap
Sushi interface via Sushi.com

It’s a community-driven DeFi hub designed to boost the liquidity of digital assets. 

This multichain platform, supporting several chains including Ethereum, Polygon, Harmony, BNB Chain, Avalanche, TelosEVM, Moonriver, Celo, Fantom, and Arbitrum, boasts an impressive product suite. From a traditional Automated Market Maker (AMM) to yield farming opportunities, token streaming, and staking derivatives, SushiSwap is a DeFi devotee’s playground.

At the time of writing, SushiSwap’s Total Value Locked (TVL) clocks in at a substantial $432.8M, with the SUSHI token having a market cap of $179.29M. This financial vigor cements its position as a DeFi heavyweight.

Who is behind the SushiSwap team?

The tale of SushiSwap’s team is marked with controversy and tumult. The notorious Chef Nomi, then the original developer of SushiSwap, orchestrated a rug pull early in the platform’s existence. A mere week after the launch in September 2020, he swindled more than 2.5 million SushiSwap tokens and 20,000 Ethereum, a sum equivalent to $14 million at the time. The community was left reeling, but the story didn’t end there.

Sam Bankman-Fried, an early investor and then FTX CEO, stepped up and offered to take control of the project, injecting 5 million SushiSwap tokens. SBF became a savior for SushiSwap, but his role in Web3 would take a turn for the worst less than 2 years later when his FTX exchange and Alameda Research went bankrupt, taking down many businesses, investors and consumers with him.

SBF connection to SushiSwap
Report on Sam Bankman-Fried and SushiSwap in 2020 via Decrypt.

Fast forward to the present, Jared Grey, the new Head Chef of SushiSwap, is at the helm and calls himself the “wartime CEO”. Grey took over a team mired in disputes and controversy, joining the ranks of previous leaders who, for various reasons, left the project in turmoil.

His key challenges include healing divisions within the SushiSwap team and community, turning the platform’s fortunes around, and navigating the intensifying scrutiny from regulators in the decentralized finance space. With a focus on efficiency and judicious resource use, Grey is poised to breathe new life into SushiSwap.

The difference between SushiSwap and other DEXs

Comparing SushiSwap with Uniswap and PancakeSwap reveals distinct platform identities. 

Uniswap, a trusted and long-established DEX on Ethereum, focuses on basic swapping and liquidity pool farming.

PancakeSwap, the leading DEX on Binance Smart Chain, excels in speed and cost-effectiveness.

SushiSwap distinguishes itself as a versatile, multi-chain DEX, serving both Ethereum-based and other networks like BNB Chain, Polygon and Fantom. Despite past controversies, SushiSwap’s innovation and cross-chain capabilities make it a compelling choice for diverse users. However, choosing between these platforms ultimately depends on user preferences, specific needs, and the network they use.

SushiSwap’s SUSHI token

The SUSHI token is the lifeblood of the SushiSwap ecosystem. Created in August 2020, SUSHI operates as an essential component in every aspect of the platform’s operations, providing not only the foundation for the platform’s liquidity pools but also acting as a governance token, empowering token holders to participate in the decision-making process.

The SUSHI token is essential for many services across the platform such as staking, earning rewards, and participating in the platform’s governance. When users stake their SUSHI tokens in the Sushi Bar, they receive xSUSHI tokens in return, which represent their share in the Sushi Bar pool and allow them to earn a portion of the fees collected by the platform.

SUSHI token stats via DappRadar Token Explorer
You can track crypto tokens using the DappRadar Token Explorer

According to DappRadar, as of the time of writing, the SUSHI token is valued at $0.68, with a total supply standing at 249.28 million tokens. The token reached its all-time high of $23.05 in March 2021, while it recorded its all-time low at $0.489 in November 2020, demonstrating the volatility inherent in the crypto market.

How to use SushiSwap?

Navigating SushiSwap’s diverse functionalities can seem daunting at first, but understanding the platform’s main tools simplifies the process. This guide will delve into the core components of SushiSwap, providing a clear and concise step-by-step walkthrough on how to use them.

How to swap crypto on SushiSwap? 

Sushi’s token swap function is its most fundamental feature. In order to trade one of the 400 tokens available on SushiSwap, go to the official dapp and follow these steps:

  1. Choose between Swap and Limit Order: You can either convert tokens instantly or set a specific price to buy.
  2. Connect Wallet: Begin by connecting your wallet to SushiSwap. The platform supports multiple wallet providers including MetaMask, WalletConnect, and Coinbase Wallet.
  3. Select Tokens and enter amount: On the SushiSwap interface, select the token you want to swap from and the token you want to receive. Input the amount of the token you wish to swap.
  4. Approve Transaction: If it’s your first time swapping a particular token, you’ll need to approve the transaction. Click on “Approve” and confirm the transaction in your wallet.
  5. Confirm Swap: After approval, click on “Swap”. A confirmation window will appear displaying details of the transaction. If everything looks right, confirm the swap.

Remember to consider the gas fees which will be added to the transaction. The swapped tokens will appear in your wallet once the transaction is confirmed on the blockchain.

Why and how to add liquidity on SushiSwap

Participating as a liquidity provider in SushiSwap’s pools is another popular feature of the platform. It earns you a 0.25% fee on all trades proportional to your share of the pool.

The process is as simple as swapping. In the ‘Pool’ section, you just have to input the amount of each token you want to deposit. The interface will automatically adjust the amounts to maintain the 50:50 ratio.

Once the transaction is successful, your liquidity pool tokens will appear in your wallet. These tokens represent your share in the pool.

Be aware of potential impermanent loss, which can occur when the price ratio between the two tokens changes significantly.

Sushi farming and crypto staking with Onsen 

Another popular feature of Sushi is Onsen. It allows you to earn fees and rewards by depositing and staking your tokens on the platform. You’ll also be providing liquidity to pools, but your rewards will be SUSHI tokens instead of LP tokens.

SushiSwap Onsen is located in the ‘Farm’ section of the dapp, and you select your Onsen pairs, often involving newer or fewer mainstream tokens, to be part of the Onsen program. Moreover, you get to harvest your SUSHI earnings whenever you want.

Lending and borrowing on SushiSwap with Kashi

Sushi’s DeFi hub also comprises a decentralized lending platform, Kashi. It’s designed to allow users to lend out and borrow different types of tokens.

By lending your tokens, you’ll earn interest based on the borrowing demand for that token. Decentralized borrowing is also possible, but you’ll need to provide collateral in order to borrow.

Remember that borrowing involves more risk than lending, as changes in the value of your collateral could result in liquidation if the value falls too much relative to your loan. Always manage your risk appropriately when using DeFi platforms like Kashi.

What is MISO, Sushi’s permissionless launchpad?

SushiSwap’s MISO, which stands for Minimal Initial SushiSwap Offering, is a unique platform that enables anyone to easily launch a new token. This launchpad removes the complexity of the token auction process, allowing newcomers to the digital universe to partake without the need for intricate technical expertise.

MISO Sushi
Minimal Initial SushiSwap Offering interface via Sushi.com

MISO has effectively improved upon traditional launchpads by doing away with the need for team permissions, which tended to cause friction and slow down the auction process. Now, whether you’re an individual or a team ready to launch, MISO simplifies the journey of creating a new product and growing your digital community.

How to stake SUSHI for xSUSHI on the SushiBar

Another popular tool in this universe is the SushiBar. There, you can stake SUSHI tokens in return for xSushi token rewards. 

xSUSHI is another token, similar to LP tokens, that represents your share in the Sushi Bar pool. Your tokens accrue value over time as fees are collected by the platform.

“Fees for xSushi have been temporarily disabled for a year starting Dec 22nd 2022 following the Kanpai vote to redirect fees to the Treasury. xSushi will still be used in governance proposals.”

Official statement on the SushiSwap dapp

Is SushiSwap still worth it?

SushiSwap continues to show promising potential in the expanding decentralized finance (DeFi) landscape. It offers a rich suite of features, from swapping tokens and providing liquidity to lending and borrowing, and even launching new tokens through MISO. Its community-centric approach, continuous innovation, and ongoing diversification into various chains position it as a versatile player in the crypto space.

It has indeed been involved in tumultuous events, but the current team, wide DeFi offer, and strong community seem to back it up.

However, like all crypto investments, SushiSwap involves risk, so it’s crucial to thoroughly understand its workings and the volatile nature of the market before jumping in. Always remember, it’s not just about whether an investment is “worth it”, but whether it aligns with your personal financial goals and risk tolerance. DYOR.

Keep tracking SushiSwap and explore DeFi with DappRadar

DappRadar is your comprehensive portal to the world of decentralized exchanges (DEXs) and DeFi dapps. Beyond SushiSwap, the platform offers detailed insights into a myriad of DeFi applications, their total value locked (TVL), volume, user count, and more.

Be sure to leverage DappRadar’s DeFi ranking feature, which lists the top DeFi projects based on key metrics and user engagement, providing a vital tool for identifying the most promising and popular platforms in the DeFi ecosystem.

Explore DappRadar Rankings

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