Is SushiSwap A Good Investment?

Last Updated November 24th 2021
14 Min Read

The cryptocurrency market is bubbling – many people have become millionaires by investing in cryptos, so it is not surprising that new people are entering the market on a daily basis. However, the sad reality is that there are several people who are losing money through cryptocurrency investment. This primarily happens because the individual is inexperienced and had little or no help before starting to trade.

Becoming successful in cryptocurrency investing should be rocket science. Sometimes, it can be as simple as identifying a good investment and making a significant financial commitment. But how can you identify a good investment when there are thousands of options to consider. Sometimes, it is best to take on the coins individually, and here, we are going to discuss whether SushiSwap is a good investment.

Let’s continue by stating that SushiSwap is one of the most popular new coins on the market. Launched in 2020, the coin has seen significant growth in 2021, and many people are buying it because it is believed that it will become a lot more valuable in the future.

But is SushiSwap really a good investment? We will not provide a Yes/No answer. Rather, we will help you understand the coin and its network better. In the end, you will decide whether it is an investment you will want to make.

Content:

What is SushiSwap?

SushiSwap is an automated market maker (AMM) that makes trading easier for DeFi users. It is an advanced form of decentralized exchange that allows users to trade digital currencies using liquidity pools. Unlike traditional centralized exchanges and decentralized exchanges, SushiSwap utilizes smart contracts to create a market for any given pair of tokens.

SushiSwap was forked from a popular decentralized exchange called Uniswap. It is another notable effort to diversify the AMM market and it offers several additional features that are not present in Uniswap. By automating the trading of tokens and increasing rewards for network participants, SushiSwap offers lots of value to users. This is one of the reasons it is becoming really popular in the DeFi space.

As a DeFi protocol, SushiSwap is optimized for traders in the subsector. It solves the problems of liquidity in the sector and provides several important tools to improve users’ experiences. In addition to providing liquidity, it provides yield farming and staking opportunities. It is also a great place to discover profitable digital assets, and smart contracts help users execute profitable trades. Fees are friendly and are also used to reward liquidity providers and other network participants.

It is also okay to describe SushiSwap as a crypto token that can be traded on different platforms. Of course, it has a native currency, just like other cryptocurrency projects. This native currency, which also serves as the governance token of the network, is the primary investment vehicle you will have to buy if you intend to invest. It can be used in different ways to generate income. This digital asset trades under the ticker symbol ‘SUSHI.’

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How Does SushiSwap Work?

SushiSwap works like most other automated market makers on the DeFi space. The primary function is to facilitate trading by providing liquidity pools. When an order is placed on its platform, it takes liquidity from the crowd-sourced pool of funds to execute the trade. This is technically similar to the way market makers work in the stock market.

Like other decentralized exchanges, SushiSwap charges fees for transactions on its network. It charges just a 0.3% fee, which is relatively cheap when compared to what is charged on centralized exchanges. Users of the network earn interest on the funds they provide to the liquidity pools. Other network participants are also rewarded according to what they do with their assets on the network.

It is important to discuss the SushiSwap token at this point because it powers almost all the activities on the network. SUSHI, as the native currency is called, is also the governance token of the network. This implies that it enables community governance of the SushiSwap ecosystem. Holders hold voting rights that allow them to deliberate on proposals and vote for changes. This way, every holder of the asset contributes to determining the future of the ecosystem.

How Do You Invest In SushiSwap?

Primarily, investing in SushiSwap means trading the token. Interested investors can buy SUSHI from available platforms and sell when they feel the time is ripe to sell. Day traders can buy SUSHI and sell it after some hours. Investors can also wait for days, weeks, months, and even years before selling. It all depends on their investment strategies.

As previously mentioned, there are different ways to make money from SushiSwap – you can swap currencies, buy and sell SUSHI, and also participate in yield farming and staking. SushiSwap also allows for lending and borrowing. Lending attracts rewards while borrowing requires collateral and attracts a fee.

Though there are different activities going on in the SushiSwap ecosystem, the major way to invest is to buy the token. You can put the token to various uses, but buying is the first step towards investing. The coin is available on many platforms, including eToro, the number social trading platform that works for traders/investors of all experience levels.

How Do You Make Money From SushiSwap?

Buying and selling SUSHI is the commonest way to make money from SushiSwap. Besides this, there are a few other ways to make money with your SushiSwap investment.

Generally, here are the different ways to make money from SushiSwap:

1. Trading

Trading refers to the simple act of buying and selling. In SushiSwap investment, it simply means buying SUSHI and selling when the market conditions are in your favour. To make a profit, you will need to buy when the coin is cheap and sell when the price goes up. Traders can hold SUSHI for days, weeks, months, or years before selling to make profits. The chances of losing money by trading are also high since the coin is volatile.

2. Staking

The SUSHI token can be staked across various platforms in the DeFi scene. Staking is one of the ways to earn passive income from SushiSwap investment. You will be able to earn rewards while waiting for the price to improve so that you can sell your coin for profit.

3. Farming

SushiSwap has a yield farming feature that also rewards participants. This means you don't have to be a liquidity provider to earn rewards from the network. It is also a less-risky way to participate in the network and earn without buying and selling often.

4. Lending

SushiSwap allows for borrowing and lending. Borrowers provide collateral and also pay associated fees. Lenders, on the other hand, are rewarded from the fees generated by lending to those in need. Lending is another safer way to earn from the network without selling your assets.

Read Also: Will SushiSwap Make Me Rich In 10 Years?

Is SushiSwap a Good Investment?

SushiSwap has been around for about a year and a few months. Already, it has become a popular coin and many are investing in it. Does that mean it is a good investment?

Well, there are several factors to consider when deciding whether a cryptocurrency is a good investment. Firstly, you need to consider the fundamentals of the project and its sustainability. You also need to consider the history of the network and how it is currently run. You also need to consider how well the native token of the network has performed in the past and its current position.

Like other automated market makers (AMMs), SushiSwap is a very useful tool in DeFi trading. It has the necessary features to make trading easier and more profitable. In some ways, it is more helpful than Uniswap, which is why it is becoming very popular. The only issue it has is that it is operating in a very competitive market, which means other protocols may outperform it and relegate its relevance in the market.

When it comes to performance, SushiSwap has performed like most other assets in the DeFi. After it was launched in August 2020, it quickly climbed from an initial price of $0.50 to $2.59 in August 2020. It reached $8.84 on 2nd September before dropping to about $0.874 on 5th October. It reached an all-time low of $0.4737 on 4th November 2020 before rising gradually to finish 2020 at $2.61.

In 2021, SUSHI has fluctuated significantly. It grew significantly in the first few months and reached its all-time high of $23.38 on 13th March 2021. It dropped to about $12.09 on 29th April before climbing again. It eventually reached $21.44 on 19th May. In the last few months, the price has fluctuated from $14 to $7.

Judging from the little we have covered on SUSHI’s price history, you can tell that it is a very volatile asset. This also implies that people must have made lots of profits as well as losses by investing in the coin. Depending on your risk tolerance, it can be categorized as a good investment. But you need experience to trade such a volatile token.

It is possible to make money by investing in SushiSwap, but you need to buy at the time the coin is cheap. It is difficult to predict how well it will perform in the future, so you may want to consider the good sides as well as the bad sides of SushiSwap investing, which we will discuss real soon.

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Does SushiSwap Have A Future?

Are you considering investing a huge sum of money in SUSHI? You need to consider the future of the coin and its potentials before making a commitment. You also need to consider where the coin is going if you are considering a long-term investment. So, does SushiSwap have a future?

At the moment, SushiSwap is a very useful tool for DeFi traders. As an automated market maker, it offers users several opportunities beyond its native currency. This is one of the reasons it has been widely adopted, and we believe that it will remain useful for the time being. However, the competitive nature of the fast-paced DeFi subsector means no one can tell whether it will remain relevant for several years.

Besides the fact that there are several other AMMs on the market, no one can truly say how the sector is going to develop in the future. There are concerns that DeFi will be regulated in the future, and that will be a huge threat to SushiSwap and similar protocols. But in the midst of all the uncertainties, SushiSwap can still perform well in the future. To do that, it will need to continue to improve its services and offerings.

Don't Miss: SushiSwap Price Predictions

What Are The Good Sides Of SushiSwap Investment?

Sometimes, it is easier to make an investment decision when you consider its good sides and its bad sides. Of course, there are several good things about investing in SushiSwap. Here are some of the reasons you may want to invest in the coin:

SushiSwap is a very helpful tool in DeFi trading and will present several opportunities to any active user.

SushiSwap has become very popular, which is one of the reasons the coin has performed so well in 2021.

SushiSwap presents several ways for holders to earn from the network – it is good for investors who like earning passive income in the cryptocurrency market.

SushiSwap is a community governance network, meaning that the holders of the token control how the network is run.

SUSHI has performed relatively well on the market, though it is a volatile asset.

What Are The Bad Sides Of SushiSwap Investment?

Just as there are good sides to investing in SushiSwap, there are also bad sides to it. Without wasting time, here are some reasons you may want to reconsider investing in the coin:

SUSHI has shown signs of extreme volatility, which means the chances of losing your money is high, just as the chances of making a profit.

❌ SushiSwap is operating in a highly competitive market, and there is no guarantee that it will maintain the current momentum in years to come.

❌ SushiSwap was founded by anonymous persons, and the principal founder, Chef Nomi, faced backlash when he/she withdrew 34,000 ETH from the network. Though the founder apologized and returned the funds, the incident has reduced public trust in the network.

Should You Invest In SushiSwap?

Deciding to invest in SushiSwap means accepting to bear the risks involved. Of course, you can make money by investing in SushiSwap, but you must understand that you can also lose your money easily. You need to have the stomach for it.

You also need to be sure that SushiSwap is ideal for your investment approach. If you like HODLing, SushiSwap may not be the best asset to invest in. No one can confidently predict how DeFi will evolve, so no one is certain that SUSHI will continue to grow in value. However, if you like to hold a token for a few weeks or months before selling, then investing in Sushi can be a good decision.

SushiSwap is also a good fit for you if you like investing in DeFi assets. The sector is booming now, and you will find lots of gems on SushiSwap. Considering the fact that it has opportunities for lending, staking, and farming, it is a good fit for those who like earning passive income in cryptocurrency investing.

The Best Way To Invest In SushiSwap

The first step towards investing in SushiSwap is buying SUSHI from the right source. Of course, there are several platforms where you can buy the coin, but you need to be sure that the platform you choose is friendly and suitable for an investor of your experience level.

eToro has proven to be one of the friendliest platforms for investing in cryptocurrencies, and SUSHI is available on it. After buying SUSHI from eToro, you can adopt any investment strategy of your choice to make it work for you. If you are not comfortable with SushiSwap, then you can choose alternative coins to invest in. The ball is on your court. The most important thing is to understand each cryptocurrency you want to invest in, determine whether it is a good fit for your portfolio, and then buy the token from the right platform.

eToro – Best Platform To Buy SushiSwap

eToro have proven themselves trustworthy within the crypto industry over many years – we recommend you try them out.

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