What is SushiSwap?

Decentralized finance or DeFi has established a revolutionary ecosystem that is becoming increasingly important throughout the global financial world, and that has led to the creation of new blockchain financial, application and usability paradigms. From it, multiple innovative projects have emerged, as in the case of SushiSwap.

The SushiSwap project was created to take the next step towards new Uniswap protocol designs, thus seeking the constant evolution of the decentralized finance system. SushiSwap’s features have been designed to innovate and bring new benefits to the investors involved, in order to represent the best project experience.

If you were wondering what is SushiSwap, here we have the answer.

SushiSwap is a protocol that seeks to enliven the interests of users with incentives obtained with revenue-sharing and network effect. SushiSwap allows investment in different liquidity pools and receiving earnings in Sushi tokens in return, although unlike other Uniswap projects, users will continue to earn a percentage of the protocol fees in Sushi, even after they stop actively participating in the supply of liquidity. Having contributed during an early stage of the protocol, participants are considered important stakeholders for the project.

This aspect of the project is the main difference with Uniswap, where participants only receive benefits as long as they are providing liquidity. If they withdraw their capital from the pools, they will no longer receive these interest rates.

How does SushiSwap work?

To understand how this project works, it is necessary to define the distribution of the tokens. The majority of SushiSwap users were (or still are) liquidity providers in Uniswap pools, so a simple distribution system was designed in order to invent the migration of all these providers.

To earn SUSHI tokens and become an active liquidity provider, you can stake your Uniswap LP tokens in their corresponding list and then start earning tokens once the rewards reach block 10750000. Since the community is the one who decides, LP tokens Eligible can be added by chain governance.

100 SUSHIS will be created at the meeting each block, which will be distributed among the liquidity providers of the pools. The good news is that for the first 100,000 blocks processed, the SUSHI tokens allocated will be multiplied by 10, thus giving the providers 1000 SUSHIS per block.

How are rewards distributed?

Currently, the network is configured so that the 0.3% obtained from all transaction fees are distributed among liquidity providers. These active providers will receive 0.25% while the remaining 0.05% is reconverted to SUSHI and is sent to the token holders.

SushiSwap has a protocol very similar to that of UniSwap, only it tries to restore the decentralized character to the project and give the advantage to the liquidity providers, who keep the pools running.

In fact, SushiSwap could be defined as a fork of Uniswap. Being the most popular Chinese DeFi project, this new initiative to generate Sushis has grown rapidly.

However, it is necessary to warn about the potential risks of investing large amounts of money in the SushiSwap protocol, especially since the smart contracts that keep the protocol working are not audited by any financial or economic authority.

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What is SushiSwap?