Is SushiSwap a good investment?
When we take all factors into consideration, SushiSwap looks like a safe investment. The SUSHI token has been performing very well so far, and the SushiSwap partnerships give it a solid backing in the crypto ecosystem.
SushiSwap was one of the most successful crypto projects of the past year, and the SUSHI token is still performing superbly during the current bull run.
Part of the Decentralized Exchange (DEX) revolution, SushiSwap may be a good investment for crypto enthusiasts in 2021. Here’s a full guide on how to leverage it.
What is SushiSwap?
SushiSwap is one of the most popular DEXs (decentralized exchanges) on the market. The platform launched in 2020 as a fork of Uniswap.
Just like Uniswap, SushiSwap allows you to trade an unlimited number of cryptocurrency tokens. Unlike centralized exchanges such as Binance or Coinbase, DEXs like SushiSwap enable blockchain developers to directly list their projects on the market.
But SushiSwap is much more than just a Uniswap clone.
Even though the two DEXs are very similar, SushiSwap has some features which enable it to successfully compete with its predecessor (listed below). Currently, SushiSwap already has 40% of the volume of Uniswap, and its market share keeps growing.
SUSHI Token: The Main Advantage of SushiSwap
Just like Uniswap with its UNI token, SushiSwap is also powered by a unique digital asset called SUSHI. Usually, people earn money with DEXs by providing liquidity to the exchange. Adding liquidity to DEXs means locking some cryptocurrency in specialized smart contracts called liquidity pools.
As long as you keep funds locked in a liquidity pool, you are eligible to earn interest which comes from the fees paid whenever someone buys or sells crypto on the exchange.
On most DEXs, you only earn interest if you keep your funds in the liquidity pool.
The second you withdraw your tokens from the pool, you stop earning.
SushiSwap gained popularity so quickly because it allows you to earn some money at all times, even if you don’t keep your funds locked in a liquidity pool.
SushiSwap users pay a 0.3% fee on every transaction. From that number, 0.25% gets distributed among liquidity providers. However, the remaining 0.05% is shared among all SUSHI holders, even if they don’t add liquidity to the exchange.
You don’t have to do anything…
You earn the guaranteed 0.05% interest just by owning SUSHI tokens. 0.05% seems like a very small number, but it’s worth noting that every day assets worth $300 million are being traded on SushiSwap, which means that each day the SUSHI token holders earn $150,000 in total, even if they don’t add liquidity to the exchange.
When we analyze whether SushiSwap is a good investment, it’s important to take a look at SushiSwap’s partnerships. SushiSwap is considered a part of the Yearn Finance Ecosystem. Aside from SushiSwap, this DeFi collective includes projects such as Pickle, Arko, Cream, Cover and, most importantly, Yearn Finance.
The importance of the Yearn Finance partnership shouldn’t be underestimated.
Yearn Finance was one of the projects which started the DeFi gold rush in 2020, and Yearn’s founder Andre Cronje is one of the most influential people in crypto.
The Yearn Finance partnership means that SushiSwap has a strong backing in the crypto ecosystem. Alone, it would be hard for SUSHI to compete with Uniswap.
As a part of a larger community, SushiSwap has the potential to become one of the market leaders in the future.
SUSHI Price Performance So Far
The SUSHI token has been one of the best performing digital assets during the current crypto bull run. The price analysis leaves no doubt that SUSHI is still a good investment.
For the most part of 2020, the SushiSwap price was stable, and SUSHI traded for less than $1 for a token. Then, in November 2020, the SUSHI price started to grow.
For the past few months, SushiSwap has been performing superbly, and the SUSHI price surged massively. On March 13th, SUSHI reached a new all-time high of $23.38, and it looks like it still has a lot of room for growth. Since SushiSwap is similar to Uniswap, comparing the two can give you some idea on how high the SUSHI price can get.
The UNI token’s all-time high is $35.86, and generally SushiSwap trades for about $10 less than Uniswap. If SushiSwap continues to increase its market share, the SUSHI price can rise by that amount in the foreseeable future.
Is SushiSwap a Safe Investment?
When we take all factors into consideration, SushiSwap looks like a safe investment.
The SUSHI token has been performing very well so far, and the SushiSwap partnerships give it a solid backing in the crypto ecosystem.
However, all investments involve some risks.
It’s especially true with digital assets like SUSHI, since the crypto market is highly volatile and the price of a token can plummet instantly with seemingly no reason at all.
If you don’t mind the risk involved in investing in crypto, another thing that might interest you are Bitcoin casinos like Wolf.bet, where token love meets casual entertainment.
Wolf.bet offers both SUSHI and UNI for gambling.
The risk of playing at a crypto casino is similar to the risk of trading crypto, but it’s more fun to play a game of dice than just sit and wait until the price of your tokens goes up.
Originally published Apr 1 2021
Frequently asked questions
SushiSwap is a DEX (decentralized exchange) similar to Uniswap, which allows people to buy and sell a large number of cryptocurrency tokens, including many innovative DeFi projects.
SushiSwap is considered a relatively safe exchange, but no blockchain project is 100% safe unless used with caution. Learn all the details of investing on SushiSwap in this article.
Thousands of different cryptocurrency coins and tokens exist, and it’s impossible to pick one that would objectively be the best investment. It’s essential to thoroughly research the project you’re about to invest in.