The finance world continues to transform through the digital revolution, and one of the most popular innovations being born is Decentralized Finance (DeFi). The birth of DeFi creates a financial system that operates on blockchain technology and allows participation without traditional intermediaries such as banks or financial institutions.

 

In the DeFi ecosystem, SushiSwap has emerged as a key player. SushiSwap, as a decentralized protocol running on the Ethereum network, has brought significant changes to the DeFi ecosystem. Functioning as an exchange protocol and liquidity provider, SushiSwap allows users to participate in crypto asset exchanges without the involvement of third parties, thereby providing greater control to asset holders.

 

Furthermore, it is important to understand innovation and change in the DeFi ecosystem. The reason is rapid changes in technology and policy can greatly impact DeFi users. In this case, a deep understanding of this innovation is the key to optimizing participation and benefits DeFi. In this article, we will discuss in detail what SushiSwap is in the DeFi ecosystem, how it works, and why it is a choice interesting. Here’s the full review!

 

What is SushiSwap?

 

 

Before discussing SushiSwap, you should first understand the concept of decentralized exchange (DEX). DEX is a crypto exchange platform that connects buyers and sellers directly without intermediaries. 

 

DEX uses smart contracts with Automated Market Maker technology (AMM) to execute transactions buying and selling crypto assets. AMM requires a liquidity pool as a source of liquidity for traded crypto assets. A liquidity pool is where investors store their funds to provide liquidity for certain crypto assets. Investors who offer liquidity are called liquidity providers (LP) and receive rewards according to the amount of crypto assets deposited.

 

Meanwhile, SushiSwap is a DEX that runs on the Ethereum network, focusing on the community. SushiSwap allows users to exchange crypto assets without intermediaries and is non-custodial. Every transaction is processed directly through smart contracts without storing user funds. SushiSwap’s main token is SUSHI, which follows the ERC-20 standard.

 

SushiSwap became the talk of the town as it grew from a Uniswap fork, developed an active user base, and held hundreds of millions of USD in a short time. This protocol has a working system similar to Uniswap because it copies the source code, which is open-source. However, SushiSwap adds innovations such as community governance and a reward scheme with SUSHI tokens.

 

The launch of SushiSwap occurred in August 2020 by two pseudonymous developers, namely Chef Maki and 0xMaki, when the “DeFi Summer” wave was hitting a peak of development. Even though it experienced controversy due to an alleged exit scam by one of its founders, Chef Maki, who exchanged SUSHI tokens for ETH worth 14 million US dollars on September 5, 2020, SushiSwap managed to regain the community’s trust after being handed over to the CEO of FTX Exchange, Sam Bankman-Fried. 

 

Under the leadership of Sam Bankman-Fried, SushiSwap successfully migrated funds from Uniswap to SushiSwap’s liquidity pool, restored community trust, and proven sustainability project. On September 11, 2020, Chef Maki finally returned 38,000 ETH to SushiSwap developers while apologizing via his X account. This marks a new chapter in SushiSwap’s journey towards development and broader acceptance in the DeFi ecosystem.

 

How SushiSwap Works

SushiSwap facilitates buying and selling crypto assets between users and provides access to anyone who wants to add liquidity to SushiSwap’s liquidity pool by connecting an Ethereum wallet to this service account. The process involves users locking their assets in smart contracts at an equal ratio 1:1. 

 

For example, a user who wants to add 2 ETH to the liquidity pool ETH-SUSHI must transfer 1 ETH into SUSHI via the Swap function. In addition to adding liquidity to existing trading pairs, users also have the option to provide crypto assets on a new liquidity pool for transactions that do not yet exist. 

 

As the initial liquidity provider (LP), they can set an initial redemption ratio or price, which will likely be adjusted automatically if applicable to other parties adding tokens to the liquidity pool through arbitrage. Users who provide crypto assets in the liquidity pool are entitled to tokens SLP (SushiSwap Liquidity Provider), representing a proportional share of the assets collected. This gives users the ability to reclaim their funds and earn crypto fees in proportion at any time, according to their wishes. This system provides flexibility and incentives to liquidity providers in the SushiSwap ecosystem.

 

SUSHI Coin: More Than Just a Digital Currency

On November 11, 2022, the SUSHI token traded for $1.21, with trading volume reaching $137,100,396 in the last 24 hours. Based on the graph, it can be seen that the price of the SUSHI token decreased at the end of 2021 and experienced a reversal in mid-December 2021. In line with current bearish crypto market conditions, SUSHI prices have been falling since January 2022 and moving sideways since May until now. 

 

When SUSHI was introduced, the token supply was initially unlimited. However, based on suggestions from the community, the supply limitation was set at 250 million SUSHI. On November 1, 2022, the total SUSHI circulating on the market will reach 244,542,059 SUSHI. For those interested in investing in SushiSwap, considering the SushiSwap roadmap could be a wise step. 

 

SushiSwap’s plans focus on developing Shoyu 2.0 Beta (SushiSwap’s NFT Marketplace), improving Kashi, increasing budget transparency through community oversight, and other feature development. By understanding the direction of this development, investors can make more measured decisions regarding their investment in SushiSwap.

 

The Uniqueness of SushiSwap: Why It’s Different from Others

As an Automated Market Maker (AMM), SushiSwap differentiates itself from traditional decentralized exchanges by eliminating order books and addressing liquidity issues. Despite similarities to AMM, such as Uniswap, SushiSwap is making several important changes to increase the impact of network participation in the future.

 

Some Uniswap users are dissatisfied with the fee level, which is considered low for liquidity providers. Apart from that, criticism has also emerged regarding the involvement of venture capitalists in the platform and the lack of decentralization in Uniswap governance. However, the main innovation of this protocol is the SUSHI token, for which liquidity providers earn rewards. Unlike Uniswap, this token gives its owner the right to continue receiving a portion of fees, even if they have stopped actively providing liquidity.

 

SUSHI has also succeeded in overcoming the problem of decentralization in Uniswap by giving governance rights to its owners. With similar passion and motivation, SushiSwap adopts a “fair launch” approach to token distribution so that there is no special allocation for venture capitalists. Through these steps, SushiSwap shows its commitment to creating a fairer and more decentralized ecosystem for its stakeholders or stakeholders.

 

Comparison with Uniswap

 

 

SushiSwap is a token of Ethereum that allows holders to participate in community governance and profit from transaction fees. The project aims to simplify crypto asset trading and increase transparency by enabling access via desktop and mobile applications.

 

On the other hand, Uniswap, as a crypto trading protocol on the blockchain Ethereum, offers an innovative way to exchange ERC-20 tokens without the need for a trusted intermediary. The system keeps funds safe by providing censorship resistance and core security aspects, making the trading process easier by reducing the steps required.

 

In an era of growth, DeFi, both Uniswap and SushiSwap, can potentially increase adoption throughout 2022. Despite this, Uniswap has higher upside prospects, mainly due to its market dominance. As a leader in decentralized trading, Uniswap is the top choice for investors interested in this ecosystem. Uniswap’s market dominance provides additional benefits, especially with increasing awareness of the risks associated with centralized exchanges, such as hacking risks, lack of privacy, and potential censorship.

 

On the other hand, SushiSwap faces challenges due to several internal conflicts, putting it at a disadvantage compared to Uniswap. Fluctuating market conditions make investors tend to avoid crypto assets that are considered too risky.

 

Liquidity and Flexibility Migration in DeFi

Some time ago, Uniswap completed a liquidity incentive program, resulting in a mass exodus from the DeFi platform. 

 

Uniswap has an automatic market maker system or auto market maker that collects funds from users with various trading pairs, such as ETH/USDT or UNI/ ETH. The platform automatically matches trades and rewards contributors of pools with a fraction of the trading fees, incentivizing them to continue donating funds and staking liquidity tokens on other DeFi applications.

 

As for impact, liquidity pools are heavily influenced by the pools that provide the highest returns to users. This causes most users to focus more on profits than loyalty to a particular DEX. However, this scenario creates a volatile situation where users switch to other protocols offering higher yields, leading to mass withdrawals when yields or profits decline.

 

Although Uniswap previously held the top spot in Total Value Locked (TVL) in the DeFi market, the protocol experienced a shakeout when nearly 50% of users abandoned it. Currently, Uniswap has dropped to 5th place from 3rd place in just 24 hours. Several other protocols successfully attracted users, but SushiSwap seems to be the most successful in attracting the largest number of users from Uniswap. Controversy arose when SushiSwap, known for its migration from Uniswap, involved an anonymous creator who “sold” the platform to another party.

 

How to Buy SushiSwap (SUSHI) on INDODAX

The method is very easy for those who want to buy SushiSwap (SUSHI) crypto assets on INDODAX. Following are the steps to buy Sushiwap (SUSHI) on INDODAX, namely:

 

• Open the INDODAX website or download the INDODAX application on your mobile device.
• Login to an existing INDODAX account or register an INDODAX account for new users if you don’t have one yet.
• After login, select the menu “Market” to view the list of available crypto assets.
• Search for SushiSwap (SUSHI) in the asset list and click the SushiSwap option to see the price chart and other information.
• Pay attention to the “Trading” or “Buy/Sell”
• In this section, enter the amount of SushiSwap (SUSHI) you want to buy and adjust other options, such as order type (market order or limit order)
• After customization, check the order summary carefully before completing the transaction to ensure all details match your wishes.
• If you are sure, click the button “Buy” or “Place Order” to complete the purchase of SushiSwap (SUSHI).
• If you use the INDODAX application, verify the transaction using a previously set security method, such as a PIN or two-factor verification (2FA).
• Congratulations, the SushiSwap (SUSHI) purchase transaction on INDODAX has been successful! Don’t forget to save transaction information and maintain the security of your crypto account properly.

 

Conclusion

In conclusion, SushiSwap (SUSHI) makes transactions of crypto assets easier by allowing users to add liquidity to liquidity its pool. Users can lock their assets in smart contracts with a ratio of 1:1, for example, adding 2 ETH to the ETH-SUSHI pool by transferring 1 ETH into SUSHI via the Swap function. 

 

In addition to adding liquidity to existing trading pairs, users can provide crypto assets in new liquidity pools. As an initial liquidity provider (LP), they can set an initial redemption ratio, which can be adjusted automatically through arbitrage. In return, users are entitled to tokens SLP (SushiSwap Liquidity Provider) representing a proportional share of the assets collected. This provides flexibility to liquidity providers to claim funds and earn crypto fees according to their proportions, creating a system that provides incentives and flexibility within the SushiSwap ecosystem.

 

In terms of its uniqueness, SushiSwap, as an Automated Market Maker (AMM), differentiates itself from traditional decentralized exchanges by eliminating order books and still addressing liquidity issues. Unlike Uniswap, SushiSwap features a SUSHI token entitling liquidity providers to continue receiving some fees, even after they stop actively providing liquidity.

 

Furthermore, it is important to remember that the choice between SushiSwap and Uniswap is not simple. They have different approaches and features and meet various user preferences and needs. In this case, some users may prefer SushiSwap because of its unique incentive model, while others may prefer Uniswap for certain reasons, such as governance or decentralization.