Next, we will talk about SushiSwap, which we have already talked about a lot on this website. Still, until now, we had not done a complete tutorial or guide for this Exchange, and in this article, we will explain everything there is to know about SushiSwap Exchange.
Introduction to SushiSwap
SushiSwap is an evolved version of Uniswap with SUSHI token that works as a protocol token and benefits holders and liquidity providers in several ways.
Besides SushiSwap, there are several other Uniswap competitors like Balancer and 1inch. Each MMA has a different underlying mechanism.
For example, the 1inch liquidity protocol tries to bring more value to liquidity providers with its different exchange rate approaches.
Well, how is SushiSwap different from Uniswap? How do SushiSwap and SUSHI tokens work? How to bet SUSHI?
What is the difference between Uniswap and SushiSwap? Uniswap vs. SushiSwap
When you provide liquidity to SushiSwap pools, you receive SLP tokens and earn trading fees as a liquidity provider. You can also earn SUSHI token rewards by staking your SLP tokens.
This is somewhat similar to Uniswap’s liquidity mining and fee-sharing program. But, when you remove your liquidity from SushiSwap pools, you can still receive a portion of trading fees by staking your SUSHI tokens for xSUSHI.
Therefore, it is unnecessary to be a liquidity provider to benefit directly from the protocol. You can simply buy SUSHI tokens and stake them on the platform to earn trading fees.
While the entire 0.3% trading fee goes to liquidity providers on Uniswap, on Sushiswap, liquidity providers receive a 0.25% fee, and SUSHI holders who stake their SUSHI tokens and earn xSUSHI in return receive 0.05% remaining.
If you have SUSHI tokens, you can mint xSUSHI tokens by staking SUSHI tokens on SushiSwap and start earning trading fees.
SushiSwap Fees
When you trade tokens on SushiSwap, you will pay a 0.3% trading fee. On top of that, you also have to pay transaction fees while approving tokens, which has to be done only once per token.
Before placing a trade on SushiSwap, you should check the price impact. Sometimes it can be high, especially when you want to make a big trade or there is not enough liquidity.
In that case, especially if you want to make a big trade, you can try trading with DEX aggregators like 1inch and Matcha.
How to buy SushiSwap (SUSHI)?
The SUSHI token is traded on various cryptocurrency exchanges. You can buy SUSHI on decentralized exchanges like Uniswap, 1inch, Matcha, Balancer, and SushiSwap.
There are also several major centralized exchanges, such as Binance and Poloniex, that you can use to buy SUSHI tokens.
In terms of liquidity, Binance is the best Exchange to trade SUSHI if you don’t have a Binance account yet.
How to use SushiSwap?
If you have used Uniswap to trade tokens or provide liquidity to trading pairs before, then you will not have a hard time using SushiSwap because it is very similar to Uniswap.
You can do several things on SushiSwap: swap tokens, add liquidity to pools, stake your SLP tokens to earn SUSHI, and stake SUSHI for xSUSHI to earn fees.
To get started with SushiSwap, visit SushiSwap and connect your wallet to the platform by clicking the “Connect Wallet” button. You can use MetaMask or mobile wallets like TrustWallet through WalletConnect to access SushiSwap.
How to trade on SushiSwap?
After connecting your wallet to SushiSwap, you can exchange tokens in the “Swap” section. To make a trade, first, choose the token you want to trade and the token you want to receive in return.
After you enter the amount of the token you want to exchange, the amount of the token you are exchanging will be calculated automatically.
You can set a slippage tolerance and a transaction deadline in the settings. If you have not approved the token you want to trade before, you must first approve it before you can trade.
Click the “Approve X” button and confirm the transaction in your MetaMask wallet. After that, you can make the Exchange by clicking on the “Exchange” button and confirming the transaction in your wallet.
Adding liquidity to SushiSwap pools
You can provide liquidity to SushiSwap’s liquidity pools in the same way you do on Uniswap if you have not provided liquidity to Uniswap pools before.
To add liquidity to a pair on SushiSwap, you must deposit an equal value of each token. For example, let’s say you have $250 worth of SUSHI that you want to add to the SUSHI-ETH pair, then you’ll also need $250 worth of ETH.
You can add liquidity to pairs on SushiSwap by clicking on the “+ Liquidity” tab. Before you do that, you need to check the liquidity and volume of pairs on the “pairs” page and the daily SUSHI rewards for each pool on the “farms” page.
How to stake SushiSwap LP (SLP) tokens?
After adding liquidity to a SushiSwap pool, you will receive SushiSwap LP (SLP) tokens that you can stake on the “farms” page and earn SUSHI token rewards.
You can check the SushiSwap farms and daily $1000 SUSHI rewards on the “farms” page. To stake your SLP tokens, first, click on the “Approve Bet” button to allow SushiSwap to spend your SLP token, and then you can simply stake them.
Currently, 66.6% of SUSHI rewards are subject to 6-month vesting. So if you earn 100 SUSHI tokens, you can harvest 33.4 SUSHI immediately and the rest, 66.6 SUSHI tokens, 6 months later.
How to bet SUSHI? SUSHI Staking
You can stake your earned SUSHI tokens by providing liquidity to SushiSwap pools and staking LP tokens or buying them on exchanges to receive a portion of the trading fees.
Unlike Uniswap, SushiSwap does not distribute the entire 0.3% trading fee to liquidity providers; instead, 0.05% is left for SUSHI holders who stake their SUSHI tokens for xSUSHI while the rest goes to liquidity providers.
So if you have SUSHI in your wallet, you can stake them on SushiSwap and mint xSUSHI tokens which will accumulate swap fees. To receive the accumulated trading fees, you can convert your xSUSHI tokens back to SUSHI on the same page.
You cannot currently stake your SUSHI tokens on SushiSwap.fi, and you must use the SushiSwap lite website. You can stake your SUSHI for xSUSHI and convert your xSUSHI back to SUSHI on the “Stake” page.
To stake your SUSHI tokens, you must first approve the token to allow the contract to spend your tokens, and then you can stake SUSHI for xSUSHI.
SUSHI APY APY – xSUSHI APY
The APY rate for SUSHI staking is currently around 10%. You can check the exact APY rate on this page. The ROI for SUSHI staking will also be available on the SushiSwap website.