Unlike many other digital projects, SushiSwap isn’t a separate blockchain-based network. This is a software solution operated on the Ethereum network. It was launched in August 2020 together with its native crypto token under the SUSHI ticker.
SushiSwap is a kind of exchange platform that has a lot in common with the well-known Uniswap platform. Both solutions apply a set of liquidity pools, from which cryptocurrencies are later exchanged one for another by users of the network.
SushiSwap follows the key rules of the Decentralized Finance concept. With this software, a participant can trade digital money without being administrated by a central operator. To make the decision within the ecosystem, one should become a holder of the native crypto token – SUSHI crypto. Every participant who acquired a certain amount of coins can vote for changed and submit his or her offerings.
The principles of the SushiSwap concept explained
The SushiSwap exchange relies on the technology of smart contracts. With the help of this mechanism, participants of the platform can lock their assets there. After this, traders may access those assets and make deals on buying and selling.
Every liquidity provider makes a certain contribution to the general pool. In accordance with this contribution, the software provides fees, which are previously paid by traders on the exchange. In order to make a contribution, become a liquidity provider, and get the right to receive payments from fees, one should connect one’s Ethereum wallet to the farming software and lock two assets with the help of smart contracts.
In addition to protocol fees, liquidity providers can receive 100 newly mined SUSHI crypto tokens. They are distributed every day. After receiving this reward, providers may try to earn more digital money via the SushiBar application. It is designed to allow participants to stake their SUSHI coins in order to earn the xSUSHI token. This is basically the same token but it is traded on the open market and it also includes all the fees from the exchange.
Key Events Impacting Sushi Swap Price
If you want to be able to predict the SushiSwap price movement in the future, you must study how it reacted to different events in the past. This is one of the ways to understand what makes its price go up and down on different occasions. Here is our short outlook on the SUSHI coin price history.
- We all know that the crypto market is extremely volatile. Newly launched cryptocurrencies often tend to show very extreme price surges and drops. The SUSHI coin wasn’t an exception. Moreover, it is supposed to be one of the most volatile coins at the end of summer 2020.
It started from $3.4 and in a few hours increased up to $5, after which dropped again and decreased by $1.2. As a result, the first day after the official launch, the coin was closing at a price 75% lower than its initial offering. What’s more interesting, by September 1, it grew up to around $12 and reached its all-time maximum 3 days after the launch.
- On 5 September, the SUSHI coin was valued at around $5 until one important news. It was reported that Chef Naomi sold $14 million worth of SUSHI tokens. After this become known, the SushiSwap prices fell down by around 70%.
- The first several months of 2021 were indicated by the crypto boom. SUSHI successfully caught up with the tendency. From January to the end of April, the SUSHI coin price increased from $2 to $14. The curious fact is that within this period the token reached its new maximum of $23.28.
- The spring crash of the crypto market impacted the SUSHI token as well. It dropped to its 18-months minimum of $1.09. As of July 1, 14:00, it’s valued at $0.96.
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Pros of Investing in SushiSwap (SUSHI)
- This exchange offers an attractive selection of ERC20 trading pairs. The total number exceeds 100. This might appeal to traders and increase the demand for the SUSHI coin since this is a native token of the platform.
- SushiSwap offers its user a few different ways of participating. Trading isn’t the only way to make money on this network.
- The interface of the platform is very user-friendly. This is a good feature because it can attract more new users who are willing to explore this blockchain-based exchange.
- The transaction fees on SushiSwap are lower than on centralized crypto exchanges.
- Volatility means not only risks but huge and unexpected gains.
Cons of Investing in SushiSwap (SUSHI)
- Ethereum AMMs are often criticized for high gas fees. SushiSwap faces this issue as well.
- Experts say about the security concerns related to the exchange.
- SUSHI coins still remain a highly volatile investment. If you consider putting your money into this project, you must be ready to face increasing risks and instability.
SushiSwap is a good exchange if you want to make passive income. However, its native token is rather a bad long-term investment. SUSHI crypto coin is very unstable. Besides, analysts forecast that it will only devalue in the following years. By the end of 2022, the coin price is expected to decrease to $0.18. The five-year forecast isn’t optimistic for SUSHI crypto holders as well. Experts predict it to fall by around 100%.