A decentralized exchange comes with a lot of benefits for users when it comes to online transactions. It allows cryptocurrency traders to invest without the interference of a third party or any other intermediary. DEX or Decentralized Exchange has its own governance token. It has become the most popular Decentralized Applications (DApps). As the name suggests, its infrastructure is way more flexible than centralized exchanges.
The DEX platform we are going to talk about in this article is SushiSwap. Although, without fundamentals it can be difficult to understand it. Therefore, we have outlined what is SushiSwap along with its other details.
What is SushiSwap?
SushiSwap is a software application that runs on Ethereum similar to other platforms such as Uniswap and Balancer. Also, it seeks to incentivize users when they buy and sell their crypto assets in its platform This decentralized exchange helps traders to swap their SushiSwap token with another token. Also, note that the value of SushiSwap token may be volatile in nature. The token is known as SUSHI, which represents a governance token. Further, the platform uses liquidity pools to achieve a liquid market. In the SushiSwap, users lock up their assets into holding.
Moreover, it is a growing Decentralized Finance (DeFi) platform that runs without any central operator administrator. In fact, SushiSwap emerged in the year 2020 as a storm in the cryptocurrency community. It gained popularity and has impacted the market of cryptocurrency on a large scale. The SushiSwap token has a market share of about $ 2 billion.
Here in this platform, users holding a balance of the asset can take part in the decision-making process to choose operational methods or policy changes across the entire network. They can even vote on proposals submitted by other users.
This project was made by a person who went by the name Chef Nomi and a core contributor named 0xMaki. SushiSwap uses the AMM protocol and the code of Uniswap as its foundation. Additionally, it incentivized suppliers on Uniswap by using SushiSwap tokens as their rewards. It is based on the Ethereum blockchain to bootstrap automated market makers. The initial liquidity of the SushiSwap is sourced from another platform.
How to Use SushiSwap?
Here is a comprehensive guide on how to use SushiSwap.
Firstly, get the detailed knowledge of Ethereum and a centralized exchange. Turn the fiat currency which a centralized exchange accepts to ETH. Then, pick a liquidity pool in the SushiSwap after doing your own research. This will help in preventing rug pulls when investing. Then, attach a ERC-20-compliant wallet and link it to the exchange platform.
In the SushiSwap application, from the left hand side of the interface click on the swap option. The SushiSwap token appears on your screen after the Ethereum blockchain processes further transactions. Select the token from the drop down menu on the SushiSwap. Enter the amount you want to swap in the box. You are depositing your crypto investments on this platform. It should be according to the liquidity pool.
Also, note that the platform charges certain transaction fees when it performs swaps. Next, it goes to the liquidity providers and 0.05% to the Sushi token holders. Liquidity providers are the owner of about 0.3% – 0.25% transaction fees. Moreover, if a user wants to earn passive income they can purchase a SushiSwap token and stake them. For staking, an individual has to provide liquidity to some pools which are present on the Sushi’s farms page. This is how one wins more rewards. In this page, you may notice the options to check ROI, liquidity, staked amount and exchange.
Understanding the working of SushiSwap
SushiSwap works in a centralized exchange model such as Uniswap. Further, it ensures that there should be counter parties involved to keep liquidity of the market. This competitive platform facilitates cryptocurrency trading by relying on automated market makers. These makers are the smart contacts which are needed to create liquidity pools and mathematical formulas. Here is a step-by-step guide on how SushiSwap works.
- SushiSwap is very simple to use. Firstly, to swap a crypto for other assets, execute a few trades. Specifically, investors need to plan their trades. You may be required to pay transaction fees to exchange trades. Also, you have to use an intermediary token like USDT. This often creates difficulty and confusion. To solve this problem, SushiSwap has come up with an idea. With this decentralized exchange, SushiSwap you can instantly swap SushiSwap token. Additionally, it permits exchanging one crypto asset for another in a convenient way. By entering the amount and the desired trading pair, you can convert the token to your coin. But this type of transaction requires one to pay a transaction fee.
- Though SushiSwap one can exchange any amount as there is enough liquidity provided to the users. Hence, it is not only a secure and convenient gateway for users, but also an abundant platform in terms of liquidity.
How to buy SushiSwap
Here is a guide on how to buy SushiSwap:
- Start by creating an account on an app such as Coinbase and continue with the sign up process.
- Verify your ID on the app.
- Next, you have to add a payment method from the method box. Then, use a bank account or debit card to initiate the process.
- Then, start a trade by selecting the “Buy” option.
- Now, select SushiSwap from the list of assets. Further, open the browser of SushiSwap and tap to open the purchase screen.
- Type the amount of crypto you want to purchase in your local currency. It will automatically convert into a SushiSwap amount.
- Finalize your purchase by tapping the “Preview buy” button. It will show the details of the purchase you made. Keep in mind to confirm your purchase later.
- Congrats! you’ve bought SushiSwap crypto.
Steps to connect a crypto wallet to SushiSwap
To connect a crypto wallet to SushiSwap, read the steps given below:
- Firstly, install the SushiSwap app or visit the web interface of the SushiSwap.
- Now, click on the enter app to a page that allows you to connect your wallet.
- Now you need to connect your wallet before processing any transaction. Click on the button “connect to a wallet” to further continue the process.
- Next, choose a wallet from the list. The most popular one is MetaMask (You can use any other compatible wallet). For this, you need to have a MetaMask account. Now click on the option to connect with MetaMask. Further, it will automatically connect it to SushiSwap DEX.
How to Swap crypto on SushiSwap
To swap crypto on SushiSwap, read the following guide carefully. But before you start make sure you’ve already connected your SushiSwap crypto exchange with your selected wallet (It works as your SushiSwap Wallet). Further, users should have at least a token to exchange in the SushiSwap. Also, make sure funds should be present in your wallet to cover the blockchain transaction fees. Follow to given steps to process a swap:
- Select the blockchain network on SushiSwap to perform your token exchange process. For this you need to click on the icon to reach blockchain network options. The application supports various blockchain networks such as Ethereum, Polygon, Celo, etc.
- Choose the blockchain network depending on which token you want to swap. For example, if you select Polygon to swap tokens, you will need an adequate amount of MATIC first in your wallet.
- On a swap page, select the token you want to swap and the token you want to receive. Enter the amount for the first token.
- Now, click on the swap button to come to a new window on the screen. Lastly, click on the Confirm Swap option to confirm the transaction.
- After confirming the transaction from MetaMask wallet, an option to import pops up on the app.
- The screen will show a message stating the performed swap with a link. Further, you can use this link to see the transaction on the explorer.
- Now, import tokens in your crypto wallet. Now, you have finally swapped your cryptocurrency.
Steps to add liquidity to SushiSwap
- In the app or website, go to the pool tab on the page and click on Add option. Decide what token you want to deposit. It can be a SushiSwap token as well. The liquidity feature of this platform allows a user to pay an equal amount of both the tokens that they want to add to the liquidity pool.
- Now, select the value against one token. Value against the other token will automatically appear on the SushiSwap.
- The percentage of your share appears in the pool. Later, confirm the Supply.
- After the successful transaction, you become a liquidity provider in the pool. Also, you will earn a liquidity fee for all the transactions over the pool by other users.
Features of SushiSwap
From a sizable liquidity to swapping SushiSwap crypto, SushiSwap has become more convenient and advantageous for users. Let’s discuss more features of SushiSwap.
SushiSwap mainly supports five major features:
Farm (Ethereum Network)
It is one of the best features of SushiSwap as it facilitates earning rewards. When a user deposits crypto into liquidity pools, the app gives rewards for it. However, rewards value depend on the level of contribution of users.
Stake SUSHI (Ethereum)
You can earn incentives when you stake SushiSwap tokens for a long time.
This feature allows a user to swap one cryptocurrency for another, including USD Coin (USDC), Ethereum (ETH) etc.
People can borrow cryptocurrency available from others and the lenders can earn interest on it.
This feature allows individuals to borrow crypto in need from the liquidity pool.
Is SushiSwap trustworthy?
Now that you know about SushiSwap in detail and how it works, you might be wondering whether it is a legit platform or not. To help you with this we are going to discuss some information here.
With new features, the app is constantly evolving. In fact, it is now one of the dominant decentralized exchanges that expanded its connection to many other blockchain platforms. But, even after this kind of approach and success, it is safe to say that SushiSwap is still trying to expand and is in its early phase of development. Moreover, the app added many new features and is providing a great service like lending and yield farming. Therefore, it is receiving enough popularity even when there are no audits.
Note that the platform runs on a security mechanism that makes it secure without audits in place. Having everything in mind, its reputation and history say that the exchange was never hacked and underwent any cyberattack. Also, It is important to note that a professional team of various experts are running this platform. And, it has been allowing a wide number of users to stake SUSHI crypto, the native SushiSwap token effectively.
Therefore, we can conclude that SushiSwap is a legit platform and completely secure.
This guide would help beginners who were trying to find the answer of how to buy SushiSwap. We included complete details on the topic like how to use SushiSwap, features of the app etc. With the step-by-step guide, you will be able to understand how the platform works. SushiSwap is helping many users to share and collect payment efficiently. It is an innovative DeFi product made by most reputable developers in the DeFi sphere allowing users to add crypto assets to a liquidity pool.
It is rapidly pacing in terms of overall value locked across the network. With the rising market value, SushiSwap crypto will also be in demand among the investors. Now, it is fair to say that this decentralized exchange increases the income of the people.