Despite donning a seemingly silly name, Sushiswap is not to be trifled with – it knows business. In the span of just a single week, Sushiswap has amassed overwhelming tokens amounting to over $800M. As per the Sushiboard, the dedicated platform tracking its data, that is already 80% of the collective assets of Uniswap. With that in consideration, it now seems that a liquidity battle is amidst between the two rivaling decentralized exchanges.
Many would quickly observe the glaring similarities between Sushiswap and Uniswap. On top of their almost identical names, both are a liquidity aggregator that rewards users who commit liquidity into their smart contracts in addition to the trading costs. However, Sushiswap does things a bit differently as it has successfully incorporated yield farming within its operations.
Sushiswap gives out SUSHI tokens as a reward for contributing to its total liquidity collection. With that, people can see similarities to other DeFi lending projects, which hands out governance tokens as forms of utilization rewards. Some examples of these are Compound’s COMP and yearn.finance’s YFI tokens. Notably, SUSHI could also be freely sold on minor markets, just like the governance tokens mentioned above.
Sushiswap does not shy away from this brewing competition with Uniswap. In fact, it has now started offering bonus SUSHI tokens to those that switch away from its rival’s LP tokens. According to their official announcement, this move aims to incentivize its early adopters and farmers and aid with ‘The Liquidity Migration’. Although Sushiswap has provided the public with this official statement, many still believe that this move is to solidify its place as the best unicorn in DeFi, beating out Uniswap.
Lastly, it is worth mentioning as well that Sushiswap still needs to undergo the audit process. This means that investing in it is still considered very risky, especially if its laid out plans do not go its way. Chef Nomi, the pseudonymous creator of Sushiswap, states that the process is already on its way. They would be more than happy to ensure the public of its legitimacy.