SushiSwap Vs Uniswap: Which DeFi Protocol Should Be Your Choice?
The cryptocurrency industry is beginning to heat up, with innovations like decentralized exchanges (DEX) that allow for completely independent markets. These new platforms have been created in response to centralized platforms and risky custody practices. It's time we rid ourselves of these shackles.
When it comes to decentralized exchanges, there are a few big players in the space. Two of the most popular protocols are SushiSwap and Uniswap. So, which one should you choose?
To help you make a decision, we've put together a comparison of SushiSwap and Uniswap. Read on to learn about the key differences between these two protocols so that you can decide which one is right for you.
SushiSwap Vs Uniswap: An Overview
The anonymous “chef” behind Sushi launched their first project, a cryptocurrency that would revolutionize how people trade cryptos. Not only did it offer an innovative way for users to bet with tokens but also allowed them the opportunity at winning more than they lose. Unfortunately, this wasn't long-lasting as soon as Uniswap's creator Hayden Adams found out about what happened.
He rightfully took legal action against those responsible who are now facing copyright infringement charges alongside other counts including fraud. The user interface for SushiSwap is based on a sushi menu, so it has more of a feel-good factor than Uniswaps’ platform. It also offers rewards and points which makes getting started easier.
It seems that the lure of higher profits was too much for many LPs to resist. After all, Uniswap had already completed some token distribution benefits while still providing stability and security through their time-tested platform. This is making it temporarily more lucrative than SUSHI pools.
The SushiSwap platform uses its native token, which is called “SUSHI” for short. The governance and incentives of this network are mainly fueled by these tokens as well. It offers them to liquidity providers in order to encourage more trading activity on their exchange.
For example, services with decreasing amounts in each block get distributed evenly among all pools until there's only one left who has been holding onto his/her entire supply since the beginning. At present time they’re minting about 250 million per batch, making up 192 million currently available circulations wise but expect those numbers to go beyond that point.
Imagine a world where you could trade bitcoin for Ethereum with only the tap of your fingers. That’s possible now thanks to Uniswap, which provides an easy way for anyone in any country around our globe can buy or sell coins from 2 different currencies. It’s based on what they want at whatever price is most convenient for them. The exchange has fees similar to those found during traditional trading but without all those pesky commissions imposed by banks along with their high transaction costs when wiring money across borders.
The liquidity providers (LP) are incentivized to provide the needed volume of trading in order for them to be able to earn the fee. The more swaps that happen on your exchange platform means an increased chance of earning some money.
In the new Uniswap V3, LPs can choose which crypto pair they want to provide liquidity for. They also earn much higher yields by concentrating their resources in a specific range of prices and exposing themselves only during periods where there is a high trading activity within that particular market segment. But it comes at some cost as markets may move away from what was previously considered "normal."
Uniswap's smart contracts offer a unique take on the traditional derivatives market. The code in these automated trading devices does all of your margin lending, which means you can skip those pesky human traders and jump right into making money.
|Number of trading pairs:||39000||1200|
|Amount going to Liquidity providers:||0.3%||0.25%|
|Amount going to Token Holders||-||0.05%|
|Amount locked in liquidity||$5.5B||$3.3B|
SushiSwap Vs Uniswap: Similarities
The Uniswap and SushiSwap are two different projects with the same goal, creating an exchange platform that offers liquidity pools for users to swap their tokens of choice. The two major similarities are:
- Liquidity Pools
Uniswap and SushiSwap have a unique feature that allows users to swap one token for another through their respective liquidity pools. By becoming an active trader in this exchange, you can earn incentives by depositing tokens into the pool or facilitating trades with your own money at any time.
- Automated Market Maker Model
The Uniswap and SushiSwap platforms rely on the AMM model to automate trading using a set algorithm. The two networks use different formulas, with "x" representing a number of tokens in the pool for one pair or event, while y stands for another. These values can be changed depending upon user settings via algorithms designed by cryptocurrency experts who understand how each coin works best when paired together.
SushiSwap Vs Uniswap: Differences
After years of innovation, both Uniswap and SushiSwap have introduced new features to stay ahead in the industry. The differences between these platforms include:
- Liquidity Mining
SushiSwap offers both incentives for liquidity providers and users to mine new tokens by providing information about trading activities on their platform. In contrast, Uniswap stopped offering rewards after launch as planned and there are currently no plans in place regarding when or if they'll resume this program. The one exception is Hayden Adams who announced that he would be bringing back the original plan of distributing UNI through mining again but hasn't provided any official date yet.
- Swap Fees
Uniswap is trying to create a fairer marketplace for traders by providing different fee structures. For example, stable coin pairs may charge 0.05%, and popular coins such as Ethereum or USDT will settle at 0.3% per trade while newer tokens have higher risks associated with them so they require higher fees of 1%. In contrast, SushiSwap charge just under 0.3% but it's been proven successful because both liquidity providers get 0.25% and user-side profit margins remain high even during times when markets are volatile.
- Lending and Margin Trading
In order to solve the problem of DEXs being more expensive than their centralized counterparts, Uniswap has created features specifically for them. Although SushiSwap is expanding into other areas (such as decentralized app development), it currently holds only one DApp called Kashi that allows users to deposit tokens and utilize them like you would with any other wallet. In short, they are stored securely until needed.
- Concentrated Liquidity
SushiSwap, one of the more popular decentralized exchanges in use today does not have any plans to implement concentrated liquidity. This means that there are higher chances for large orders being filled at specific prices on the Uniswap platform compared with other platforms. It also means increased risk if someone wants certain coins or tokens without having them available anywhere else because those trades won’t go through.
- Reward System for Newer Tokens
The “Onsen Program” is a clever idea that rewards SushiSwap users for staking new tokens. This extra incentive helps smaller and newer projects grow faster by encouraging people with their own cryptocurrency. Because they put it towards acquiring this form of leverage in order to gain more control over project growth as well.
SushiSwap Vs Uniswap: Total Value Locked (TVL)
Total value locked (TVL) means that many people have staked their cryptocurrency in DeFi. It's one of the most popular metrics used to identify how much value is being offered or put on the smart contract across a platform. Also, it can be thought about as an indicator of whether there would likely ever need more funding into this system via gas fees if needed at some point down the line.
The fight for leadership in the blockchain world is definitely an interesting one. SushiSwap managed to take a lead near-end of August 2020 because it offered rewards that Uniswap did not have at the time. Uniswap's UNI token launched in mid-September 2020, giving the company a boost of confidence. The increased value also caused SushiSwap’s total volume to surpass them by billions ahead at $3 billion compared with only $2B for this trading platform.
SushiSwap Vs Uniswap: Trade Volume
Trade volume is a good indication of how successful and popular your platform might be. If more people are trading on it, that must mean they like what you have to offer. While SushiSwap has been growing steadily over the past year, it seems that Uniswap is already on top.
With a weekly trade volume of $7 billion and more than 700% higher than their competitor’s figure. When comparing the two peer plays, it is clear that Uniswap has a much higher daily trade volume than SushiSwap.
SushiSwap Vs Uniswap: Revenue
Revenue is a great way to measure the success of your business. The more money you make, the better off things will be for everyone involved. The battle between Uniswap and SushiSwap is heating up as each platform continues to gain more users. It seems that no matter what happens, one will always be superior to another in some way or form. The growth of SushiSwap has been incredible. In September 2020, their revenue accounted for only 14%of the total generated by both platforms but in June 2021 this number reached 36%.
SushiSwap Vs Uniswap: Future Predictions
With the help of several market analysts, we're about to hear what they think is going to happen with cryptocurrency prices in the next few months. Uniswap and SushiSwap price predictions are just suggestions - there's no guarantee you'll make money if invest at this time.
The price predictions for SushiSwap look remarkably similar to those of Uniswap. However, both tokens are expected to see significant volatility across 2022. It appears as though the gains will be higher on average when all indications point towards increased risk appetite among traders once again.
DigitalCoinPrice predicted that SUSHI would go up by 50% this summer and it's already starting to happen. It seems like the price will continue increasing until 2023 when they expect another bull run.
While WalletInvestor sees SushiSwap's value increasing at a slow but steady rate over the next year, they predict that by December of this upcoming season it could hit an all-time high. Prices will then continue to rise in the early months leading up to 2023 when we might expect one final push towards lofty levels not seen since May 2020.
Uniswap is a new, but exciting cryptocurrency exchange with an already large user base that has been growing rapidly in recent months. The company’s native token UNI seems likely to increase at least some of those gains over the next twelve months as well- though not all analysts see this rise coming soon enough.
The DigitalCoinPrice team has predicted that Uniswap (UNI) will see a fairly volatile year in 2022, with prices climbing as high as $17.27 but struggling to maintain value month after month. They also predict a pattern of stability over the next two years. Meanwhile, there are expected significant gains going into summer before winter brings about a decline once again.
By 2022, the Uniswap project is predicted to have reached an average trading price of around $29 according to wallet investors. It will continue climbing into 2023 with potential highs near $35 by July or September.
SushiSwap Vs Uniswap: Pros & Cons
PROS of SushiSwap
- Low fees: SushiSwap charges a 0.3% fee per trade, which is significantly lower than other centralized exchanges. This makes it an attractive option for traders who are looking to save on fees.
- Fast transactions: SushiSwap's decentralized nature means that trades are processed much faster than on centralized exchanges. This is due to the fact that there is no need to wait for orders to be filled by a centralized party.
- User-friendly interface: SushiSwap's interface is designed to be user-friendly and easy to use. This makes it a great option for those who are new to the world of decentralized exchanges.
CONS of SushiSwap
- Lack of liquidity: Due to its relatively young age, SushiSwap does not yet have the same level of liquidity as other more established exchanges. This can make it difficult to find buyers or sellers for certain tokens.
- Volatile prices: The prices of tokens on SushiSwap can be quite volatile due to the lack of liquidity. This means that traders need to be careful when entering or exiting trades.
- No fiat support: SushiSwap does not currently support the ability to trade with fiat currencies. This means that all trades must be made using cryptocurrency.
PROS of Uniswap
- Easy to use: Uniswap is designed to be as user-friendly as possible. Even if you've never used a decentralized exchange before, you should be able to figure out how to use Uniswap with just a few minutes of experimentation.
- No sign-up required: Unlike most other decentralized exchanges, Uniswap does not require you to create an account or provide any personal information. All you need is an Ethereum wallet with some ETH in it (to pay gas fees) and you're good to go.
- Built-in liquidity: One of the biggest advantages of using Uniswap is that it has built-in liquidity. This means that there is always someone else on the platform willing to trade with you, no matter what time of day it is.
- Decentralized: Since Uniswap is built on the Ethereum blockchain, it benefits from all of the security and immutability that comes with blockchain technology.
CONS of Uniswap
- No fiat support: Unlike most centralized exchanges, Uniswap does not support fiat currencies like USD or EUR. This means that you can only trade with other cryptocurrencies, which may not be ideal for everyone.
- Not as customizable: Some traders may prefer the more customizable interface of a decentralized exchange like IDEX or EtherDelta. Uniswap's interface is relatively basic and doesn't offer much in the way of customization or advanced features.
SushiSwap Vs Uniswap: FAQs
How can I trade on SushiSwap?
In order to trade on SushiSwap, you will need to connect your Ethereum wallet to the platform. Once your wallet is connected, you will be able to view all of the available markets and select which one you would like to trade-in. After selecting a market, you will be able to view the order book and place orders to buy or sell tokens.
How can I add liquidity to a pool on Uniswap?
In order to add liquidity to a pool on Uniswap, you must first deposit the requisite amount of ETH and tokens into the smart contract. Once the deposit is confirmed, you will be able to add liquidity to the pool.
What are the risks of adding liquidity to a pool on Uniswap?
The risks of adding liquidity to a pool on Uniswap include losing money if the price of the tokens in the pool fluctuates negatively and being exposed to potential scams.
Conclusion: Which One Is Better?
When it comes to choosing between SushiSwap and Uniswap, there is no clear winner. SushiSwap offers a more traditional exchange experience, with a focus on providing liquidity for those who want to trade large amounts of digital assets. Uniswap, on the other hand, is a newer protocol that allows users to trade directly with each other, without the need for an intermediary. This can be helpful for those who want to avoid fees or are looking for a more decentralized solution. Ultimately, the decision of which one to use will come down to personal preferences and the specific needs of each user.