The decentralized finance sector has experienced explosive growth in recent years. By unlocking the potential of the property economy, DeFi has become a vehicle for financial change and an investment opportunity for many.
One of the flagship projects in this movement is SushiSwap — the brainchild of the decentralized Uniswap exchange. The SUSHI token has quickly gained immense popularity as its capitalization crossed the $250 million mark just five days after launch.
Built on top of the Ethereum blockchain, SushiSwap is a breakthrough in DeFi. The innovative solutions involved that are aimed at the interest and benefit of users, as well as the desire for maximum decentralization, have made the young fork one of the most successful projects of the year.
Being a Fair Launch project, SushiSwap focuses entirely on community-driven traction, refraining from the concept of groveling before whales and major investors. It is the proportionate distribution of all SushiSwap tokens and the lack of any presale or seed rounds with immense discounts that inspire users of the platform and makes them believe in its underlying principles of fairness and transparency.
SushiSwap provides ideas that give a new round of development for the DeFi community, thus attracting players of all levels. The service strategy differs drastically from Uniswap and other well-known representatives of the sector.
Innovation And Rethinking
According to the principle of operation of similar platforms, users of SushiSwap can contribute liquidity to certain pools and receive rewards in the form of tokens. All users need to do is select a pool and invest in it. Once the liquidity starts circulating, the participants will receive proportionate rewards for their contributions.
However, on Uniswap, this only happens while the users’ liquidity is part of the pool. If they decide to withdraw it, they will no longer receive rewards. In addition, if they invested only once and did not intend to continue making contributions, users risk having their income diluted. This is due to the fact that large players and investment funds join the pool, pouring in huge amounts of liquidity, which affects the amount of rewards received when they are distributed among pool participants.
SushiSwap, on the other hand, makes it possible to receive a portion of the protocol’s income, even if users do not provide liquidity in the long run.
Another key feature of SushiSwap is its funding mechanism. The platform does not attract funds from large organizations but exists solely on the contributions, trust, and activity of the community. This allows SushiSwap to achieve unprecedented decentralization, making it independent of external influence. The creators of SushiSwap are not chasing venture capital infusions, but are seeking to strengthen the burgeoning market sector with the enthusiasm and faith of their users. It is, therefore, the community that improves and develops SushiSwap.
Effective Distribution of Rewards
The distribution of rewards on SushiSwap is very different from the usual approach applied by other exchanges. 0.25% of all trading fees are distributed among registered liquidity providers, while another 0.05% is distributed in the form of SUSHI tokens to pool participants. Users will thus be receiving rewards for any kind of participation in the system’s operation.
An additional 10% of each reward distribution round is allocated to the fund, which is later used to pay for update development, various audits, etc.
The basic set of pools available to the exchange’s user includes the following:
● CEFI Stablecoins
● DeFi Stablecoins
● Credit protocols
● Synthetic assets
● Oracles
● Pool SUSHI-ETH
The last pool is the most profitable, as rewards for it are doubled.
By being the first to implement such an approach to platform development, the creators of the exchange have demonstrated that the old DeFi model was flawed and have thus provided a new paradigm for launching and investing in assets.
The users also welcomed the idea of migrating tokens from Uniswap to SushiSwap. In fact, this means that all Uniswap LP tokens are integrated into the new platform and become available for exchange and use in trading pairs or pools without losing their value. This is a very important innovation, which helps expand the audience of the young exchange, attracting many users who had been working with Uniswap thus far.
Breakthrough In Token Usage And Upcoming Improvements
The project continues to develop rapidly and has recently achieved a new milestone with the launch of the BentoBox service. This service is to become the foundation for a new ecosystem, which the developers intend to create in the near future.
BentoBox is a vault for user-posted assets and a platform allowing the development of decentralized applications (DApps).
The new platform provides a twofold advantage. First, it simplifies the storage and use of any assets. For users, this means efficient operation of the transfer system and lower transaction fees. Secondly, it simplifies the token approval process, reducing it to one click.
Moreover, BentoBox has overcome the limitation of tokens being restricted to a single use case. Any user can add their tokens to the system, receiving profit margins thanks to Kashi Lending — the first DApp based on BentoBox. The application works on the principle of isolated credit pairs and if any tokens sent to the vault are not used by any add-on or DApp, they will still be distributing rewards.
The Miso launcher protocol has also been recently released, which allows the creation of new tokens on the SushiSwap platform, as well as provide crowd sale functions.
By implementing all these innovations and bold solutions, SushiSwap has provided a new vision for the sector, making it accessible to anyone. New opportunities for users and developers have thus become a necessity, spurring the industry’s explosive growth.
We are witnessing a project journey that seeks to reinvent the decentralized finance sector, giving the community many new opportunities. And the story of the SushiSwap project has only just begun…