If I Told You 🍣 Was a 🦄 Clone, What Would That Mean to You? If Nothing, Read our Uniswap Article First.
SushiSwap is a Uniswap competitor that seeks to beat the competition by, for example, attempting to provide better rewards for liquidity providers.
Like with Uniswap the core functionality is the ability to instantly swap ETH-based pairs, including tokens that aren’t trading on any centralized exchange.
Choose the tokens you want to swap (either by typing in the name or copy and pasting the contract address), click the connect wallet button to connect a web3 wallet like Metamask, input the amount you want to swap, and then hit swap.
The tokens will be swapped based on a liquidity matching algorithm, but the gist is it works like any other exchange for simple trades from an end-user perspective.
With that said, the biggest drawback compared to Uniswap in there here-and-now is Uniswap generally has better liquidity, and that means the average user will want to shop on Uniswap first. One should also consider that SushiSwap started as a direct clone of Uniswap that simply added a token and tried to steal Uniswap’s liquidity. Those days are gone and SushiSwap has worked hard to stand on its own two feet under new management(?), but the back story is still worth noting.
Of course, ultimately traders will go where their pair trades and where the farming is best. So SushiSwap is often to be the right answer for you in some cases. Just make sure to check out Uniswap first.
Providing Liquidity (and Yield Farming): Not only can you buy and sell on Uniswap, you can also get paid to provide liquidity. Providing liquidity means putting up both pairs of a trading pair at a 1:1 ratio and then having rights to an equivalent percentage of the pool that you can redeem later. When you do this strategically to take advantage of liquidity providing opportunities, by providing liquidity and then staking LP tokens for example, it is sometimes called ‘Yield Farming’. There are complexities and risks to providing liquidity, but that is the gist. For more on this, check out Binance Academy’s “Guide to SushiSwap” article (don’t forget to read about impermanent loss). 🍣
"SushiSwap" contains information about the following Cryptocurrencies: