Uniswap is still the largest decentralized exchange on the market, but SushiSwap is a very strong competitor trying to take its position.
For now, the volume of assets traded on Uniswap is much higher than on SushiSwap, but can SUSHI surpass UNI in the long term?
Uniswap and SushiSwap are the two largest DEXs (decentralized exchanges) in the world. Uniswap is the undisputed champion, SushiSwap the worthy contender trying to become the industry leader.
Both exchanges are similar, but there are some differences between them. Although Uniswap is more popular, SushiSwap is a very serious competitor.
Here’s how the two platforms differ.
What is Uniswap?
Uniswap is not only the most popular decentralized exchange on the market, it’s also the most valuable DeFi (decentralized finance) project in the world. It’s largely thanks to Uniswap why DeFi solutions became so highly demanded by crypto investors.
The core idea of DeFi is taking established financial institutions and making them more efficient by replacing centralized third parties with smart contracts.
In case of decentralized exchanges like Uniswap or SushiSwap, smart contracts replace traditional centralized crypto exchanges such as Binance or Coinbase.
How Uniswap Came To Be
The idea of using smart contracts to create a decentralized crypto exchange is Vitalik Buterin’s, the founder of Ethereum, who posted his concept of a DEX on Reddit in 2016.
Shortly after, a blockchain developer named Hayden Adams decided to turn the idea of a decentralized exchange into reality. After receiving $100,000 of funding from the Ethereum Foundation, Uniswap was finally ready to launch in 2018.
Originally, Uniswap was not very popular.
Things changed in 2020 when DeFi solutions started gaining wide recognition, and Uniswap became the go-to place for buying and selling DeFi tokens.
The most recent breakthrough in the history of Uniswap was launching the Uniswap token (UNI) in November 2020. The token launch massively increased the value of Uniswap, turning it into one of the crypto projects with the highest market capitalization.
The Uniswap Token
The Uniswap token (UNI) is the native digital asset of the Uniswap platform. UNI is an Ethereum-based (ERC-20) token which serves many purposes on the Uniswap exchange.
The most important use case of UNI is being the governance token of Uniswap.
All decisions regarding the development of Uniswap are made by the UNI token holders, assuring that the platform remains a decentralized and community-driven project.
Replacing centralized infrastructure with decentralized smart contracts greatly improves efficiency. Because of that, fees on DEXs such as Uniswap or SushiSwap can be much lower than the fees of centralized exchanges.
The transaction fee on Uniswap is only 0.3%. Since Uniswap is a decentralized exchange which requires the community to provide liquidity to the platform, all of the revenue generated by transaction fees is distributed to the liquidity providers.
Liquidity providers enable Uniswap to function by adding liquidity to the exchange, which means locking funds in a smart contract called a liquidity pool for a period of time (adding liquidity to Uniswap is a popular way of making money with DeFi!).
What is SushiSwap?
SushiSwap is the most popular alternative to Uniswap, and the second largest Ethereum-based decentralized exchange. Even though it still hasn’t managed to surpass Uniswap in popularity, SushiSwap became one of the most famous DeFi projects in a very short time.
How SushiSwap Came To Be
SushiSwap is much younger than Uniswap.
It was created in August 2020 by a pseudonymous founder calling himself Chef Nomi.
The new decentralized exchange was launched as a fork of Uniswap.
In other words, SushiSwap used the source code of Uniswap and added enough original features to create a new project.
It’s impossible to talk about the history of SushiSwap without mentioning the incident that happened on September 6, 2020. On that day, Chef Nomi sold his SUSHI tokens worth $6 million, which caused the SushiSwap token price to plummet.
Although many people were convinced that this would be the end of SushiSwap, the situation turned out different.
Ultimately, the SUSHI price recovered, and Chef Nomi relegated the control over the platform to Sam Bankman-Fried, CEO of the FTX Crypto Derivatives Exchange.
The SUSHI token, just like the Uniswap token, is an ERC-20 digital asset built on the Ethereum network. Even though SushiSwap and Uniswap are similar platforms, SUSHI token provides some special bonuses to its holders compared to UNI.
While the Uniswap token can be used for generating passive income only by using it to add liquidity to the exchange, SUSHI token is different. With SUSHI, you are eligible to earn revenue simply by holding the tokens in your wallet, without having to do anything.
Fees on SushiSwap are exactly the same as on Uniswap – 0.3%. However, the fees are distributed in a different manner, giving SushiSwap some unique earning perspectives.
On Uniswap, the entire 0.3% fee is distributed to liquidity providers.
If you’re not adding liquidity to the exchange, you won’t earn anything.
On SushiSwap, only 0.25% of the transaction amount is distributed to liquidity providers.
The remaining 0.05% is distributed to all SUSHI token holders.
Even if you don’t send any tokens to a liquidity pool, you will still earn some money, which is the main reason why people consider SUSHI an attractive investment.
Uniswap vs SushiSwap Comparison
|Amount Going to Liquidity Providers||0.3%||0.25%|
|Amount Going to Token Holders||–||0.05%|
|Volume||~$1 billion||~0.2 billion|
|Number of Pairs||8,278||100|
Uniswap vs SushiSwap: Fees
Whether you use Uniswap or SushiSwap, you will pay the same transaction fee. Both decentralized exchanges are equally cheap to use, and the transaction fee is only 0.3%.
Uniswap vs SushiSwap: Amount Going to Liquidity Providers
On Uniswap, all of the fees paid by the users are distributed to the liquidity providers.
On SushiSwap, some of that amount is instead distributed to the token holders, which means that adding liquidity to SushiSwap is slightly less profitable.
Uniswap vs SushiSwap: Amount Going to Token Holders
The fact that SUSHI holders can earn passive income just by holding the tokens is one of the main benefits of SushiSwap. Holding UNI won’t give you any special advantages, but holding SUSHI will allow you to gain some income every day with no effort.
Uniswap vs SushiSwap: Volume
The volume of Uniswap is much higher than that of SushiSwap. On an average day, the amount of funds traded on Uniswap is about 5x higher than on SushiSwap.
Uniswap vs SushiSwap: Number of Pairs
The number of available trading pairs is the one aspect in which Uniswap completely dominates SushiSwap. The former allows you to buy and sell thousands of ERC-20 tokens, compared to which the 100 available pairs on SushiSwap look very underwhelming.
Uniswap vs SushiSwap: User’s Interface
Uniswap looks like a completely standard, generic app. SushiSwap is very unique: its design is made to resemble a menu at a sushi bar. Some people might find it interesting and creative, for some it might be a bit distractive – it’s up for you to decide.
And the Winner Is…
If you compare the numbers, the answer is clear: Uniswap is still the undisputed champion, whereas SushiSwap is still just a contender.
Although for a moment it looked like SushiSwap would manage to take over Uniswap as the most popular Ethereum DEX, it doesn’t look like it will happen in the near future.
It’s worth remembering that Uniswap and SushiSwap are not mutually exclusive. Try both and pick the one that suits you best, or use both at the same time!
Wolf.bet supports both UNI and SUSHI to contribute to the evolution of decentralized exchanges and their ecosystem. Try them out at our casino today!
Frequently asked questions
Uniswap is the most valuable DeFi project, and one of the most valuable cryptocurrencies in general. Because of that, many people consider Uniswap a good investment.
The market cap of SUSHI is much lower than that of UNI, which is why some investors consider it an undervalued gem.
Uniswap is a decentralized project launched by a developer named Hayden Adams. SushiSwap was created by a pseudonymous author calling himself Chef Nomi, and the platform is now mainly controlled by Sam Bankman-Fried, CEO of the FTX Crypto Derivatives Exchange.
One of the most common sayings in the crypto community is “don’t trust – verify”. Although DEXs are usually considered safe, you should always do your due diligence and diversify your investments to mitigate the risks.