Is SushiSwap (SUSHI) Safe?

Last Updated February 7th 2022

6 Min Read

SushiSwap, like all other cryptocurrencies, is not immune to risks. In fact, it is a hugely volatile investment that is not new to controversies. Crypto market observers and investors have also noted with concern that as SushiSwap token price and popularity increase, so has its appeal to criminals. They have also noticed the increased incidence in cyber-criminal cases around the DeFi ecosystem, in which SushiSwap operates.

In the first seven months of 2021, for instance, CipherTrace reported that crypto crime involving DeFi projects and tokens had hit a record. By this time, crypto investors had lost more than $681 Million to cybercriminals, with DeFi-related hacks and frauds accounting for more than 54% of the major crypto crime volume.

Now, with the proliferation of DeFi crime and with virtually every financial regulatory agency raising the alarm over crypto crime, everyone wants to know - is SushiSwap a safe investment?

The simple answer to this is yes, the SushiSwap network can be considered to be rather because it has never been hacked, and neither have the SushiSwap liquidity pools been breached.

We must, however, mention that SushiSwap, like virtually all other cryptocurrencies, is exposed to a myriad of risks that you need to familiarize with before you can start buying SUSHI tokens.

We will be discussing a few and telling you how you can keep your SUSHI token safe in this guide. First, though, we look at a few things that you need to consider before you start buying SushiSwap.

What To Consider Before Buying SushiSwap (SUSHI)?

There are two primary facts that every SushiSwap investor needs to consider and make peace with before they start buying the DeFi token.

First, you need to make peace with SushiSwap’s volatile price performance. Looking at the token’s past price action, you will notice that it is not uncommon for it to lose value in double-digit percentages in a relatively short period of time. It may also take months to years before the altcoin can recover some of these losses.

At the moment, for instance, SUSHI is trading close to 80% below its March 2021 peak price, and it still is uncertain when it will recover. Some analysts expect it to get back to this peak price by December 2022, yet others believe it can only get back to these price levels after 2025. Before buying SushiSwap, ensure that you can stomach such volatility.

Secondly, you need to understand that your choices and investment determine the security of your digital assets. From your choice of crypto exchange to a crypto wallet and even your trading strategy, all these factors play a crucial role in determining the security of your crypto asset. For instance, you are more likely to lose your SUSHI tokens to hackers and malicious malware if you leave them in a hot wallet.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

What Are The Risks Of Buying SushiSwap (SUSHI)?

Today, there are two most primary threats to your SushiSwap tokens. These include:

Volatility

Price volatility is the most common risk to SushiSwap investing. A drastic price dip will often expose you to losses, and it often takes an extended period before the altcoin can recover. At the time of writing, for instance, SUSHI is trading close to 80% below its peak price of $23.38 set on March 2021. Unlike hacking, however, the loss to price volatility is impermanent. This implies that you will most likely recover the lost investment when the altcoin rises back to its original price.

Hacking

Hacking is also a common and a big risk to SushiSwap investing. Losses of crypto assets to hackers are almost always permanent, and you often have little to no recourse because most crypto investments aren’t insured. There are multiple ways through which you can lose your SUSHI tokens to hackers, and the most common are a breach of your personal digital wallet, breach of your exchange account, breach of the exchange vaults you store your coins, or breach of a DeFi platform where you have staked SUSHI.

Other Scams To Look Out For

Pump and dump schemes

In a modern crypto pump and dump scheme, individuals market themselves as analysts, trading signal providers, or even tech insiders. They start by providing you with useful information and actionable tips about SushiSwap, its price action, and its direction.

But as soon as they gain everyone’s trust and can now influence the token’s price with their opinions, they start spreading misinformation. For instance, they would enter into a large short position and then issue alarming information about the altcoin and liquidate their profitable positions as soon as the token price bottoms.

Ponzi and pyramid schemes

Most crypto Ponzi and pyramid schemes are domiciled in the DeFi space here ‘developers’ come up with hugely lucrative investment programs. They ask naïve SushiSwap investors to lock in their assets in these special programs with the promise of above-average returns in the shortest time possible.

But as soon as enough investors lock their tokens, they pull down the program, cease communications, and run away with the deposits. A perfect example is the ‘Crypto Queen’ scam where OneCoin founder, Ruja Ignatova, made away with close to $4 Billion of investor funds.

Phishing and fake websites

Phishing and fake website scams are largely perpetuated via social media and email. In the case of fake websites, criminals create mirrors of popular exchange and wallet websites and send alarming prompts about hacking to potential crypto investors, asking them to log in to their accounts and change their passwords.

But these websites are designed to capture client details and use them to access their trading accounts on the real trading accounts. Phishing messages and malicious are also aimed at capturing crypto investors’ personal information and using them to access their crypto wallet or exchange accounts and are spread via either social media or sent out as emails.

How To Keep SushiSwap Safe?

To keep your SushiSwap investments safe, you need to start by familiarizing yourself with the different crypto investing risks and types of frauds. To achieve, this you will need to constantly monitor crypto crime reports by the likes of CipherTrace and Chainalysis or such government agencies as the Federal Trade Commission (FTC). They are constantly updating the list of common crypto frauds and offering guidance on how to detect and avoid them.

Other measures that you can take include investing in a reliable hardware wallet for storing your crypto assets, whitelisting the email addresses for exchanges and wallets, doing your own research when making a buy/sell decision, and eliminating the get rich quick mentality when it comes to crypto investing.

A recent investigative report by Verizon concluded that 80% of hacks were made possible by the use of weak passwords. You could, therefore, avoid becoming part of the crypto hacking statistics when you use strong and unique passwords for your crypto trading and wallet accounts.

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Bottom Line: So, Is SushiSwap Safe To Invest In?

Yes, SushiSwap is a considerably safe crypto investment. The SushiSwap network has not been hacked, and neither have its growing number of liquidity pools been breached. It is also a safe investment because it has proved its resilience by maintaining an uptrend, even in the face of what most consider to be the most volatile crypto period yet.

But there are still are multiple steps that you can take to keep your SushiSwap investment even safer. Start by familiarizing yourself with the different crypto risks and mastering how each can be avoided. Invest in a solid hardware wallet, don’t trust crypto ‘experts’ blindly when trading, and keep in mind that crypto investing is not a get-rich-quick scheme.