BigONE Strategy: What You Need To Know Before Buying SushiSwap (SUSHI)

SushiSwap (SUSHI), which debuted in August of 2020, is a cryptocurrency token and a decentralized exchange. Because the decentralized exchange provides a platform for token buyers to exchange cryptocurrencies, the word ‘swap’ appears in the name. SushiSwap’s goal is to create a fun trading environment. According to information obtained by BigONE, the decentralized exchange has a liquidity pool worth more than $3 billion. Since November of last year, the cryptocurrency’s price has increased by more than 1,500%. So, if you want to be a ‘DeFi Chef with Sushi’ on SushiSwap, BigONE believes you should first understand the following:

SushiSwap is an automated market maker based on Uniswap code

SushiSwap is an automated market maker (AMM) decentralized exchange that allows users to trade cryptocurrency tokens without the need for a central authority to manage transactions. SushiSwap uses mathematical formulas to set prices automatically, and smart contracts to process transactions.

SushiSwap has liquidity pools in which its users lend their cryptocurrency in exchange for rewards. All of these cryptocurrency funds originate here. SushiSwap is not the first AMM; rather, it’s based on Uniswap (UNI). An anonymous developer who goes by the alias Chef Nomi forked Uniswap’s code, which was used to create SushiSwap.

The famous ‘Vampire Attack’

SushiSwap’s problem when it first launched was onboarding users who provide liquidity by lending cryptocurrencies. People can already do this with Uniswap, so some incentive was required for them to switch to a new decentralized exchange. Chef Nomi provided this incentive in SushiSwap tokens, which users can obtain by depositing in SushiSwap. Chef Nomi devised a strategy to help SushiSwap gain an advantage over its competitors: users had to deposit Uniswap tokens to receive rewards on SushiSwap. In addition, SushiSwap’s reward mechanism was designed to allow you to make more money than Uniswap.

Because it caused liquidity to be lost from Uniswap and added to SushiSwap, this reward mechanism was later dubbed a ‘vampire attack’. SushiSwap also obtained approximately $810 million in encrypted funds via the ‘vampire total’. The event’s ongoing impact drew the attention of token buyers, resulting in the two exchanges eventually attracting more users and achieving an unexpected win-win result.

Chef Nomi’s departure

In parallel Chef Nomi cashed out an estimated $14 million in SUSHI from the exchange’s developer funds on rival platform Uniswap. Not surprisingly, the price of SUSHI took a hit, which drew the ire of token holders who saw this as a ‘rug pull’ for the SUSHI community. While the criticism led to Nomi returning the funds and leaving the project, it still harmed its reputation. Sam Bankman-Fried, head of centralized derivatives trading platform FTX, took control. To ensure SushiSwap retained its decentralized independence, he handed over control to community members, resulting in a more stable business.

Users can exchange cryptocurrency, borrow and receive rewards

Investors can do several things on SushiSwap:

⦁ Swap: Exchange one cryptocurrency for another cryptocurrency, such as converting your US dollar coin (USDC) to Ethereum (ETH).

⦁ Farm: Deposit cryptocurrency into SushiSwap’s liquidity pool to get rewards. The liquidity pool contains two or more cryptocurrencies, and you must deposit the same amount of cryptocurrency.

⦁ Stake: Deposit your SushiSwap tokens to get rewards.

⦁ Lend: Lend cryptocurrency to others to earn interest.

⦁ Borrow: Borrow cryptocurrency after providing collateral.

No account is required to use SushiSwap

SushiSwap’s experience will be very different if you are used to centralized cryptocurrency trading. Investors are not required to set up an account or go through the authentication process. SushiSwap requires only an encrypted wallet. Connect your wallet to the SushiSwap app to begin exchanging, lending, or borrowing cryptocurrencies. This is more convenient than using a centralized exchange, but you must already have cryptocurrency funds to exchange, lend, or borrow cryptocurrencies.

Unlike centralized exchanges, SushiSwap does not allow investors to buy cryptocurrencies with bank accounts or debit cards. Most users must first purchase cryptocurrencies through a centralized exchange such as BigONE. The cryptocurrency should then be transferred to a cryptocurrency wallet and linked to your SushiSwap account.

SushiSwap cryptocurrency is a governance token

SushiSwap (SUSHI), as a governance token, grants holders the right to vote on the exchange’s plans. If you purchase SushiSwap, you will vote on the proposals and help determine what these proposals will change. However, this isn’t the only advantage of owning SushiSwap. You can also use your tokens to stake them on the SushiSwap app. This will assist you in receiving your share of swap fees on the exchange. This is a simple method for increasing your cryptocurrency holdings. As a result, BigONE recommends that all SushiSwap users do the same. Plus, as SushiSwap grows in popularity, the price of its tokens will rise, potentially benefiting token buyers.

While SushiSwap is a fantastic project, it’s important to remember that it’s far from the only decentralized exchange that’s made a name for itself. Last year saw the launch of several new decentralized exchanges. Another popular swap is PancakeSwap, which has $10 billion staked. It remains to be seen how many of these decentralized exchanges will be successful in the long run. BigONE, an established global cryptocurrency exchange, has always been dedicated to advancing the cryptocurrency industry. We’ve believed that the current decentralized exchanges in the cryptocurrency market are overly decentralized, making it difficult for token buyers to trade various cryptocurrencies. Users must constantly switch between various decentralized exchanges. It would be much more convenient if an aggregator platform allows token holders to use the functions of popular decentralized exchanges like Uniswap, SushiSwap, and PancakeSwap under one roof. BigONE certainly believes that such a vision is achievable in the future.

If you are interested in decentralized finance (DeFi) applications, make sure to pay attention to the materials and information related to them, as well as studying and learning more. SushiSwap, like all cryptocurrencies, is risky, and BigONE advises you not to invest more than you can afford to lose.

About BigONE

BigONE is a global cryptocurrency exchange that provides a platform for trading various cryptocurrencies. It was founded in 2017 and registered in the Netherlands. The group operates in Russia, Brazil, Vietnam, Seychelles, Singapore, Japan, and Indonesia, providing marketing, investment, and blockchain technology research & development.