What is Sushiswap?
Sushiswap is a decentralized exchange that enables users to trade Ethereum-based cryptocurrencies. It is called decentralized since the protocol is regulated by no one person and it is run by smart contracts.
It is important to understand what Uniswap is before delving into Sushiswap.
In short, Uniswap is a decentralized trading protocol. It utilizes a model called automatic market-making (AMM) instead of an order book, where liquidity suppliers apply funds to liquidity pools. Sushiswap is a fork of Uniswap, meaning many aspects of Sushiswap were taken from Uniswap.
How does Sushiswap work?
With several differences, SushiSwap is a fork of Uniswap, most noticeably the SUSHI token. At launch, the token has two functions: entitling holders to the privileges of government and a part of the fees charged to the protocol.
SUSHI holders “own” the protocol in a simplistic fashion. Buyers of SUSHI are often entitled to a percentage of the commissions charged by dealers under the protocol.
Sushiswap aims to enable a network of developers to manage a marketplace where crypto assets can be bought and exchanged by users.
SushiSwap utilizes a series of liquidity pools to accomplish this purpose, close to platforms such as Uniswap and Balancer. Users first lock funds into smart contracts, and from such pools, traders later purchase and sell coins, trading one cryptocurrency with another.
SushiSwap enables users to exchange cryptocurrencies without the requirement for a central operator, a feature of an increasing array of decentralized finance (DeFi) sites.
What is SushiSwap’s history?
The founder of SushiSwap was Chef Nomi, an anonymous figure. He decided to create something close to Uniswap, but with a goal that was more group oriented.
Another influential and anonymous figure, identified as 0xMaki, joined forces shortly afterward to create SushiSwap. He is known by the rest of the organization as the co-founder of the protocol.
Since the technology of Uniswap was entirely open source, Chef Nomi took the code and changed it by introducing a token of governance, SUSHI. Over the summer of 2020, the yield farming trend was further popularized.
Because of its similar functions, SushiSwap is commonly accepted as a fork of Uniswap for that purpose.
It took them less than a month to build a DEX as strong as Uniswap, which took around 2 years to develop, the SushiSwap team boasted.
SushiSwap “creatively” drained around $800M from Uniswap to make it more difficult and the term “vampire attack” was given to the operation.
In a controversial move, Chef Nomi sold ETH $14M of SUSHI, totally breaking the confidence of the group in his purpose and the project itself. He did, though, refund the funds because he felt remorseful about it and excluded himself from SushiSwap altogether.
As SushiSwap’s admin key was passed to Sam Bankman-Fried, the creator of FTX, the condition began to stabilize.