DeFi is big business these days, but only a few projects are on their way to becoming household names. One such project is SushiSwap - the quirky, sushi-themed offshoot of Uniswap.
SushiSwap is a decentralised exchange, providing a platform for cryptocurrency holders to buy, sell and exchange their tokens, as well as earn rewards by providing liquidity. Of course, there are numerous other DEXs on the market, but SushiSwap has carved out a respectable user base and continues to be one of the most popular platforms in the sector.
Not only does SushiSwap offer one best rate of returns for liquidity providers, but with some $1.9 billion locked into its protocol, it is also amongst the top ten biggest DeFi projects currently on the market.
Built on Ethereum, SushiSwap is compatible with ERC-20 tokens and stands to benefit from the ongoing 2.0 upgrades to the blockchain. Ethereum is the most popular platform for DeFi, so SushiSwap can match most other top exchanges for performance. However, the main selling points of the platform are its innovative yield farming protocols.
In the following article, we’ll be considering 5 reasons why SushiSwap could double your money in 2022. This will include a closer look at the platforms liquidity rewards schemes, as well as how it stands when compared to rival platforms.
Why Consider SushiSwap?
There’s no denying it, DeFi has changed the face of cryptocurrency for good and the leading projects in the space all have the potential for serious growth. If you’re a cryptocurrency investor, then chances are you’re either already invested in some DeFi projects, or are planning to do so in the near future.
Investing in SushiSwap for the purposes of this article means acquiring a holding of the SUSHI token - the platform’s utility token. It can be bought and sold on the most popular exchanges and has seen some impressive price movement in its short existence.
But why invest in SushiSwap as opposed to some of the other leading platforms? Aside from its eye-catching branding and relatively easy-to-use interface, here are five reasons why you may wish to invest in SushiSwap:
1. The Sushi Bar
When users on the SushiSwap protocol provide liquidity, they are rewarded with SUSHI. In addition to this, the fee structure of the protocol also distributes a small percentage of trade fees to something called the Sushi Bar. So what is the Sushi Bar? Effectively, it is a way for holders of SUSHI to compound their rewards.
Having received a share of the rewards in SUSHI, user can then stake them via the SushiBar, in exchange for xSUSHI.
When trades are made on the SushiSwap exchange, there is a 0.3% fee. Of this fee, 0.05% is added to the SushiBar poo as LP tokens. When the rewards are ‘served’ at the SushiBar, all of these tokens are exchanged for SUSHI. This SUSHI is then metered out to the xSUSHI holders in the pool, meaning their xSUSHI is now worth more SUSHI. As per the SushiSwap website, xSUSHI token is always worth more than SUSHI, because xSUSHI collects value from platform fees.
Holders of xSUSHI can also stake the token in other SushiSwap liquidity pools to earn further rewards. Being able to earn rewards on top of rewards is one of the standout features of SushiSwap and continues to attract new users to the platform - which could have a positive effect on price as time goes on.
2. The SushiSwap Onsen
The SushiSwap Onsen offers yet another chance for users on the platform to put their tokens to work. It effectively offers “hot springs” (liquidity pools) to external DeFi protocols. It is intended to provide additional liquidity for up-and-coming cryptocurrency pairs, according to the SushiSwap website.
When selected, tokens are added to the Onsen “menu” and allocated a value of SUSHI tokens per transaction as a means to incentivize liquidity provision. This is hugely beneficial to new projects as it means SushiSwap is effectively providing liquidity for them, without these fledgling platforms having to provide their own incentive schemes.
Users providing liquidity to these Onsen pools are rewarded with SUSHI, based on the amount allocated to a particular pool or cryptocurrency pair and the proportion of the liquidity provided. Of course, we have already discussed how SUSHI can then effectively be re-invested into the SushiBar to provide further rewards. According to SushiSwap, the rewards from the SushiSwap Onsen are in addition to the standard 0.35% fee that liquidity providers are getting a share in as part of the regular staking protocol.
This is yet another way in which SushiSwap offers rewards to its users and once again has the potential to attract more potential liquidity miners to the platform.
Check Out: Will SushiSwap (SUSHI) Make Me Rich?
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
3. The BentoBox
The Bento Box has been one of the most exciting developments on SushiSwap and its announcement in early 2021 saw the price of SUSHI surge by more than 200%. In a nutshell, the BentoBox is a token vault that supports Dapps.
The inner workings of the BentoBox are highly complex and well beyond the scope of this article, but it’s enough to know that it is effectively a kind of DeFi ‘App Store’ that allows users to deposit tokens and generate yield in a more efficient way. By interacting with one or more Dapps in the BentoBox - including dual token usage - users can effectively earn rewards in more than one yield generating protocol at one time. The advantages of this should be fairly obvious.
Let’s take a look at an example. For example, a holder of SUSHI might want to lend their token out on a dApp such as Kashi. However, if their SUSHI is currently staked in the SushiBar, then they may not wish to lose those benefits. The BentoBox allows them to sidestep this conundrum and do both at the same time.
Whilst there are other yield farming ‘vaults’ on the market, BentoBox stands out for its ability to support track tokens in multiple yield generating strategies. Once again, it is an opportunity for users on the platform to compound their rewards and, whilst the learning curve of SushiSwap is getting steeper, the benefits offered are likely to continue to have widespread appeal.
4. DeFi Is More Popular Than Ever Before
One only has to look at the numbers to realise that DeFi is big business. SushiSwap alone has an estimated $1.9 billion on its books, which is impressive enough as it is, but at the time of writing the DeFi industry is said to have over $85.95 billion locked in.
Few would argue that these are some pretty serious numbers, but what’s even more remarkable is how quickly the DeFi sector has accumulated such value - back in 2019, we were still talking in millions when assessing the total asset worth locked into the various DeFi projects.
It seems that cryptocurrency investors have been quick to embrace DeFi and have jumped at the chance of additional ways to speculate on the market. Whilst many of the leading DeFi protocols are highly complex and come with a steep learning curve, as DeFi grows in notoriety we could find that more and more ‘man on the street’ investors are preparing to put the time in and learn about the finer points of yield farming, token staking and reward compounding.
It’s also worth noting that DeFi still hasn’t come close to replicating the different options, derivatives and trading systems that are found in the world of traditional finance. It won’t be all that surprising to see new DeFi protocols emerging in the coming months and SushiSwap has already demonstrated its willingness to innovate in this area.
So it seems there is still a lot more to come from the world of DeFi - and the leading platforms that fall under its auspices, such as SushiSwap. In fact, an article in Coin Telegraph has suggested that the DeFi industry could increase in value ten fold over the next five years.
5. SushiSwap Has Room To Grow
Investing is all about growth. So, whilst choosing the top DeFi project on the market - Maker at the time of writing - might be the safer option, its worth bearing in mind that such projects have further to fall and less room to grow.
SushiSwap is one of only 3 tokens in the top ten with less than $8 billion locked into its platform. Of course, there are no guarantees that it will continue to grow, but the majority of the other tokens at the top of the leaderboard have seen their trading volumes steadily increasing. When you consider that SushiSwap was only launched in 2020, compared to Maker (2017), Aave (2017), Compound (2017) and Uniswap (2018), it would appear that SushiSwap is on a similar path.
Then there’s the price of the SUSHI token itself. At the time of writing, it is trading at $4.78, following a period of decline. This is a long way from its 2021 high of $23.38 and could mean that SUSHI is poised for growth. In fact, at this point, SUSHI will only need to climb to just over half of its previous high to have doubled investor returns in 2022.
This is all speculation of course, but when it comes to cryptocurrency we can only really go on past results and these suggest that SushiSwap has room to grow and its current price suggests that it is on a low ebb. Potentially, this could portent growth in 2022 and, if that turns out to be the case, then now could be a good time to invest.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
How Does SushiSwap Measure Up Against The Competition?
Let’s face it, SushiSwap is not the only project in the DeFi space, nor is it the only decentralised exchange. First and foremost, it has its predecessor, Uniswap, to contend with. But there are also numerous other platforms, such as Aave, Compound and Maker, that are effectively operating in the same space.
The aforementioned platforms are all bigger than SushiSwap in terms of total locked-in value. However, as it stands, SushiSwap is still seen as something of an alternative to the major players - it’s nowhere near the top five projects and even Uniswap has considerably more value locked in. However, this doesn’t mean that it doesn’t have its place.
It’s also important to remember that SushiSwap is comparatively new, yet has consistently held its place amongst the top DeFi projects since it was launched. So we can infer that the project must be doing something right.
Only time will tell if SushiSwap can move its way up the leaderboard, but with regards to 2022, it is likely to remain amongst the most popular projects, even if it remains at the bottom end of the top ten.
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Conclusion - Is SushiSwap A Good Investment In 2022?
SushiSwap isn’t the only decentralised exchange out there and plenty of the other leading projects present good investment opportunities in 2022. However, we think that SushiSwap should certainly be on the radar of every foreward-thinking DeFi investor. But will it double your money in 2022?
Realistically, this is an ambitious target. The cryptocurrency market is a volatile place and aiming for a 100% return would require investors to pick the perfect entry and exit points. However, over the long term it appears as though SushiSwap is only going to get better - something which will hopefully mean that SUSHI appreciates over time.
It should be remembered that cryptocurrency - and particularly DeFi tokens - carry inherent risks. There is a great deal of competition in the sector and SushiSwap is continually competing with Uniswap for what is effectively the same customer base - something which could have a huge impact on prices as the months go on.
That being said, it's the substantial volatility that makes the cryptocurrency market such an alluring investment target. If you’ve done your research and are aware of the risks involved, then SushiSwap could prove to be a good performer in 2022 and acquiring SUSHI not only means you can benefit from any appreciation, you can also use it to gather rewards via the SushiSwap platform.
What Are Analysts Predicting For SushiSwap In The Coming Months?
Looking at SushiSwap price predictions for the near future, it seems there is some volatility expected for the token. DigitalCoinPrice, for example, has SUSHI up by as much as 50% by the summer, but then expects a period of slight decline in the latter half of the year, with the altcoin finishing the year at around $6.98.
The Economy Forecast Agency also expects the price of SUSHI to travel in both directions across 2022, dipping by as much as 20% at the end of the year. However, its fortunes are then expected to change in 2023 and SUSHI may well have all but doubled in value by December, according to the platform’s forecast.
Meanwhile, WalletInvestor has SUSHI reaching a potential $12 in by August, but then expects the token to continue making gains into the winter months, reaching a potential high of over $13.90 by the end of 2022 and continuing its upward trajectory well into 2023.
How To Invest In SushiSwap
If you want to invest in SushiSwap, then you have a few options. You can learn the ins and outs of the platform and put your existing tokens to work in its various liquidity rewards programmes, or you can simply acquire a holding of the SUSHI token, with the hope it will appreciate over time. Of course, you also have the option of putting your SUSHI tokens to work via that platform, should you so wish.
If you decide to buy SUSHI, then you’ll need to find an exchange or broker that lists the token.
What is DeFi?
DeFi is shorthand for decentralised finance, which is an umbrella term for a range of cryptocurrency based alternatives to traditional financial functions, such as currency exchange, lending and borrowing and savings. DeFi has been the biggest thing to hit the blockchain world in recent years and many of the top projects in space have seen substantial price growth. As such, tokens like AAVE, SUSHI and UNI have become popular investment targets.
Will SushiSwap double my money in 2022?
Its never a good idea to expect returns - especially on cryptocurrency investments. Realistically, SUSHI is unlikely to attain 100% growth in 2022, but it still stands to make significant gains. Its also perfectly plausible that the token will grow by as much as 96% in 2022, according to the Economy Forecast Agency.
Should I buy SushiSwap in 2022?
If you are looking to invest in DeFi, then you aren’t short of options. Any of the top ten projects, including SushiSwap, have the potential to make good returns. However, the sector is notoriously volatile, even by cryptocurrency standards, so be sure you understand the risks before committing funds.
How do I invest in SushiSwap?
The simplest way to invest in SushiSwap is to simply buy acquire some of its native currency - SUSHI. You can buy the token on most major exchanges but we recommend eToro for most users, due to its award-winning trading platform and wealth of information on all things crypto.
What is SUSHI for?
The SUSHI token is used in the staking and rewards system on the SushiSwap platform. All transactions on the exchange incur a fee, a proportion of which is doled out amongst the liquidity providers in the form of SUSHI. The token itself can then be staked in the SushiBar. For more information, see our guide on How to Make (or Lose) Money with SushiSwap.