Sushi (SUSHI)

Sushi (SUSHI) is an Ethereum cryptocurrency token tied to the SushiSwap exchange, which is a decentralized exchange. Sushi owners can participate in community governance and stake their tokens to earn some of SushiSwap’s transaction fees, also known as gas. Versions of the token can also be found on the Solana, Avalanche, Binance Smart Chain, Polygon, Terra, Celo, Harmony, Fantom, and xDai networks.

Key Takeaways

  • Sushi is a cryptocurrency tied to the SushiSwap crypto exchange.
  • The SushiSwap token has seen high volatility since its inception.
  • Proposed integrations may improve the outlook for the SUSHI token.

What Is Sushi?

Sushi is a well-supported token that works across multiple blockchain networks. It’s used as the primary currency of the SushiSwap decentralized exchange (DEX), a peer-to-peer exchange in which transactions occur directly between crypto traders.

At the time of this writing, SushiSwap is the 142nd-largest cryptocurrency by market capitalization, according to the aggregator of cryptocurrency market data CoinMarketCap. Of the maximum 250 million token supply, 242 million have been created. Like other cryptocurrencies, it has seen a wild fluctuation in prices, with a peak of more than $20 per coin and recent values dropping to under $2 each.

SushiSwap is a decentralized exchange (DEX) in which users can exchange between different virtual currencies using a connected cryptocurrency wallet, such as MetaMask. The exchange allows swapping between 11,700 currency pairs.

What Is Staking?

To facilitate trade, Sushi users worldwide deposit currency with the exchange, known as staking. At the time of writing, the total value locked (TVL) in the exchange is $2.28 billion. TVL is the sum of all assets deposited in decentralized finance (DeFi) protocols.

Staking occurs when an investor wants to swap assets, and the sale uses the pool of staked assets to facilitate the trade, thereby generating a fee. A portion of the fee goes to the depositors, offering an incentive to keep funds on the exchange.

SushiSwap works differently from centralized exchanges like Coinbase and Gemini, where trades are made between users. These centralized exchanges are the custodian of customer deposits, which are much like an online stock brokerage. Employing a DEX-like SushiSwap, users are responsible for their individual cryptocurrency wallets. The exchange is not a custodian of deposited funds; it merely acts as a facilitator.

History of Sushi

SushiSwap is a copy of Uniswap, the top decentralized exchange that operates on the Ethereum blockchain. Both exchanges are similar in terms of their basic functionality.

In late 2021, Sushi tokens fell on news that developers were leaving the project, but that turned around in December 2021 when developer Daniele Sestagalli proposed that Avalanche take over the network. Sushi rose 10% with that development. In a lengthy post on the Sushi forums, Sestagalli explained a path forward to evolve SushiSwap’s governance structure and expand integrations, among other details.

Future of SushiSwap

If there’s consolidation in the decentralized exchange industry, SushiSwap could be gobbled up by a larger project or pushed even further down the rankings as more successful projects emerge.

However, if the SushiSwap community can maintain its goals of acting as an expanding exchange, whereby users can easily swap between nearly any cryptocurrency at a low, competitive cost, SushiSwap could grow.

What Is Decentralized Crypto Exchange?

A decentralized crypto exchange (or DEX) is a peer-to-peer marketplace where users can trade cryptocurrencies without the need for an intermediary or custodian to facilitate the transfer of funds. Smart contracts enable these operations via the use of self-executing agreements written in code. Uniswap and SushiSwap are the two most popular decentralized exchanges.

How Is SushiSwap Different From Uniswap?

Although SushiSwap is a copy of Uniswap, it is different in terms of fee structure and other aspects. For instance, Uniswap has three fee levels of 0.05%, 0.3%, and 1%. Stablecoin pairs may charge a 0.05% fee, common pairs such as ETH/USDT may accept a 0.3% fee, and pairs with newer tokens may charge a 1% fee. In contrast, SushiSwap charges all business teams a flat fee of 0.3%, dish token holders receive 0.05%, and liquidity providers receive 0.25%. As of the new token launch, Uniswap does not offer additional rewards, while SushiSwap provides additional Sushi tokens for staking newer tokens. CoinMarketCap ranks SushiSwap as the 19th-largest exchange by trading volume. It’s much smaller than top DEX Uniswap, which handles more than 10 times the daily trading volume.

What Is Ethereum?

Ethereum is a global virtual machine powered by blockchain technology. It is most commonly known for its native cryptocurrency, ether, or ETH. Ethereum network participants use ETH to pay for work done on the blockchain. Ethereum is designed to be scalable, programmable, secure, and decentralized. It is the blockchain of choice for developers and enterprises who are creating technology based upon it to change the way many industries operate and the way we go about our daily lives.

The Bottom Line

Ultimately, it is up to SushiSwap leaders, community members, and cryptocurrency market forces to decide the future of Sushi. Whether that’s going “to the moon,” as cryptocurrency fans like to say, or heading down in the dumps, is something only time will reveal.

Investing in cryptocurrencies and other initial coin offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Because each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author does not own Sushi.

Article Sources
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  8. Sushi forums. "Frog Nation <3 Sushi."
  9. Cryptoticker. ''What is Leonicorn Swap? Can it Overtake SushiSwap?''
  10. Uniswap docs. ''Fees''
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