What Is SushiSwap? Should You Invest In SUSHI And Where To Buy It?

Last Updated November 23rd 2021
24 Min Read

Experienced cryptocurrency investors understand the importance of diversifying their investments. This means they need to know as many coins as possible and carefully choose the ones to invest in. Depending on how active you are on the market, you must have heard of SushiSwap or the SushiSwap Decentralized Exchange (DEX).

Just like many other new projects in decentralized finance (DeFi), SushiSwap has recently grown in popularity. 2021 has been a good year for the network, and the value of its native token has been on the rise. But what exactly is SushiSwap? Should you invest in SushiSwap? And where can you buy SUSHI?

Depending on how well you like to research a cryptocurrency before making a financial commitment, you may have several other questions besides the three key ones above. To help you determine whether SushiSwap is the type of coin you should add to your cryptocurrency portfolio, we will answer as many relevant questions as possible, regarding investing in the coin.

Before we fully delve into discussing SushiSwap, it is important to state that we will not give direct investment advice here. It is critical, therefore, that you read every aspect of this post to understand everything you need to know about SushiSwap and the suitability of its token as an investment vehicle. You will have to decide whether to invest or ignore the coin, but the information here will help you to be sure of the next steps to take.

Content:

 

What Is SushiSwap?

SushiSwap is basically an automated market maker (AMM) that allows for peer-to-peer cryptocurrency trading in the decentralized finance (DeFi) space. It is a kind of decentralized exchange that makes buying and selling of digital tokens easier and (in most cases) more profitable. Like other AMMs, it is becoming a popular tool among cryptocurrency traders/investors.

As an automated market maker, SushiSwap is a decentralized exchange that uses smart contracts to create markets for any given pair of tokens in DeFi. It can also be described as an improvement on the traditional decentralized exchange. Instead of relying on order books to link traders and dictate pricing, AMMs like SushiSwap utilize smart contracts to create markets. This brings about automated trading liquidity for crypto assets.

Like many other cryptocurrency platforms, SushiSwap was created from another popular project called Uniswap. Though Uniswap is still seen as a very good decentralized finance, SushiSwap is an improved protocol by all standards. In addition to providing automation and additional DeFi features, SushiSwap diversifies offerings for its users.

Before we draw the curtain on “What is SushiSwap”, it is important to state that it also has a digital currency. In fact, when we discuss SushiSwap as an investment option, we are actually talking about the native currency. It is the governance token of the SushiSwap network as well as the primary investment vehicle in the network. It is also used to reward network participants.

A Brief History Of SushiSwap

As mentioned already, SushiSwap is a fork of Uniswap. The project was primarily founded by someone or a group of persons simply referred to as Chef Nomi (obviously a pseudonym). There is little to no information about the background of Chef Nomi or his/her intention for forking off from Uniswap. Cryptocurrency users don’t care much about the impetus, especially since SushiSwap offers several improvements to the original project.

In addition to Chef Nomi, two other pseudonymous co-founders of SushiSwap are recognized, namely SushiSwap and OxMaki (also simply called Maki). It is simply believed that the three individuals handled the core aspects SushiSwap code and the project development. It is likely that they are also fully in charge of the business operation.

SushiSwap was launched in August 2020 on Ethereum block number 10,750,000. Though it now has a fully-recognized governance token, the founders handled every aspect of the launch. In recent times, however, de factor ownership of SushiSwap has been passed to Sam Bankman-Fried, who still serves as the Chief Executive Officer of derivative exchange FTX and quantitative trading startup, Alameda Research.

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What Makes SushiSwap Unique?

As you should know, there are several cryptocurrency projects out there and a lot of tokens you can invest in. What is special about SushiSwap and why should you want to invest in it? Well, it is recognized as a helpful tool in DeFi.

As an automated market maker, SushiSwap provides automated trading liquidity for any two cryptocurrency assets. One of the major problems it solves in the market is the problem of liquidity, and this is feasible because AMMs do away with order books.

Though SushiSwap is similar to Uniswap in some ways, it is unique in its offerings. Actually, it improves on the offerings of Uniswap and increases the impact network participants can have on its operation and future. It is a superb tool for DeFi traders who intend to capitalize on the boom in project tokens.

Another unique thing about SushiSwap is that it takes a standard 0.3% cut from transactions that occur in its liquidity pool. Network participants are rewarded portions of the fees in SUSHI tokens. It also allows for borrowing and staking, which also means there is room for participants to make passive income.  

More About The SUSHI Token

You already know that SUSHI is the native currency of the SushiSwap network. A casual cryptocurrency investor will only see it as a digital asset that can be bought and sold on various platforms, but a thorough investor will see it as the token that powers the SushiSwap network. It serves a number of important purposes on the entire SushiSwap ecosystem.

SUSHI is an ERC-20 token, which means it is built on the Ethereum network. As the governance token, it entitles users to governance rights. The implication is that users can propose changes and vote on important issues about how the network is run. The voting power of each network participant depends on the volume of SUSHI the individual holds.

If you are going to invest in SushiSwap, then you are going to be more concerned about how the token compares to other digital assets on the market. In that regard, it is safe to say that it is one of the breakout tokens of 2021. Launched in August 2020, the coin traded for about $2.59 in the early days. By September 2nd, it traded for $8.84 before dropping to less than $1 in the first week of October. It recorded its all-time low price of $0.4737 on November 4th, 2020 and reached its all-time high price of $23.38 on March 13th, 2021.

At the time of writing this piece, SushiSwap was trading for $8.34 per token. In the previous 24 hours, it recorded a low price of $8.16 and reached a high price of $9.16. The 24-hour trading volume was $261,722,490.

SUSHI’s market capitalization (at the time of writing this blog) is $1,061,729,201. This makes it the #102 ranked cryptocurrency in the world. The circulatory supply of Sushi is 127,244,443.00 SUSHI, which is just about 51% of the maximum supply of $250,000,000 SUSHI.

Don't Miss: SushiSwap Price Predictions

Should You Invest In SushiSwap?

With what we have discussed so far, you should have a good idea of what SushiSwap is and what it represents in the cryptocurrency universe. So, should you invest in the coin?

There are several things to consider before investing in a digital token, and your knowledge of the network is just one of them. You need to consider the viability of the coin as an investment vehicle and its suitability for your investment portfolio. You need to be aware of the potentials of the tokens as well as the risks of investing in them.

Based on what we have covered so far, we can only say that SushiSwap is a helpful tool for DeFi traders, but is it also a good investment option? You should have to decide for yourself, but we will discuss several other important things you need to know to make a sound decision about investing in the coin or ignoring it.

Is SushiSwap A Safe Investment?

One of the most important factors to consider before buying any crypto asset is the safety of your potential investment. This is determined by a number of factors, especially the safety of the network itself.

Different cryptocurrency networks adopt different methods when it comes to keeping their networks safe and secured. In the case of SushiSwap, it lessens the known risks of depositing funds in smart contracts by increasing the governance powers on its users. When you invest in the network, you can be sure that you and other token holders are the ones that will make some of the most important decisions regarding how it is run.

On technical grounds, SushiSwap is seen as a secure platform, which makes investing in its native currency relatively safe. However, when you consider the fact that the founders are unknown, you can understand those who will always insist that it is not a safe investment.

There is also an incident that heightened the fear of network participants that SushiSwap may not be among the safest investments, even in the unpredictable cryptocurrency market. The anonymous founder, Chef Nomi, was called out for withdrawing about $38,000 in Ethereum from the network. He/she ended up having a heated spat with users before returning the funds. Chef Nomi publicly apologized for the move and called it a mistake. It is still early to know if such attempts will not be made again in the future, and it can easily undermine the integrity of the ecosystem and affect the value of the token negatively.

Check Out: Will SushiSwap Make Me Rich In 10 Years?

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Major Reasons to Invest In SushiSwap

Are you finding it difficult to convince yourself to invest in SushiSwap? It will be necessary to consider some of the major reasons to trust your instinct and take the necessary risks of investing. Here are some of the major reasons to invest in SUSHI:

SushiSwap is a helpful automated market maker that has been adopted by many

The DeFi space is growing because of protocols like SushiSwap and Uniswap. As already mentioned, SushiSwap was forked from Uniswap and offers several benefits. It solves several key problems for DeFi users and makes trading cryptos easier and more profitable. Another wonderful thing is that it has been adopted by many who understands how helpful it can be. This is one of the reasons the token has become valuable, and the future still looks bright.

✅ SushiSwap is part of the fast-growing DeFi sector

SushiSwap belongs to decentralized finance (DeFi), which is unarguably the fastest growing subsector in the cryptocurrency space. DeFi is already changing the way people around the world see and use financial institutions in their countries. It is a revolutionary sector with lots of potentials. Assets like SUSHI will continue to benefit from the exploits of the entire DeFi sector.

✅ SushiSwap is actually easy to use and attractive

The DeFi sector has several projects, including many decentralized exchanges (DEX) and automated market makers. SushiSwap has been able to attract many users because it is easy to use. You don’t even need to open an account to become a network participant. All you need is a cryptocurrency wallet. Buying and selling SUSHI is also easy. Overall, it is a friendly protocol that will continue to make waves and attract more investors.

✅ SUSHI is a governance token

Many experienced cryptocurrency investors prefer to trust a coin that serves as the governance token of its network. SUSHI is the governance token of SushiSwap, meaning that its holders are the ones that will be making some of the most important decisions about how the network will be run. Having governance power or what is called voting rights means you can help create a desirable future for the asset, no matter how difficult and unpredictable that can be.

✅ SushiSwap offers very low fees

One of the reasons SushiSwap has been adopted by many DeFi users is the applicable fees, which is relatively affordable when compared to fees paid on many other platforms. The network charges just a 0.3% fee for joining a liquidity pool, which is really fair.

✅ SushiSwap provides several opportunities for users and offers rewards

With SushiSwap investment, it is not just all about buying and selling your digital asset. The protocol helps you swap several digital assets (even with fiat currencies), and there is also a lot you can do with its native token. It allows for staking and farming, which are features that bring rewards. Users can also lend to other users and earn rewards. They can also borrow once they provide the necessary collateral.

✅ SushiSwap enjoys the support of several industry insiders

One of the reasons SushiSwap has become really popular in just about a year of existence is the support it has received from several industry insiders. It was endorsed by several DeFi platforms after it was forked. Again, it started trading on many centralized exchanges just days after being launched. The quick popularity has obviously set the coin on its way to success.

✅ SUSHI can be staked for passive income

We’ve already hinted that there are several ways to earn rewards by buying and using the SUSHI token. Staking is one of the most interesting ways to earn with digital assets without having to sell the ones you’ve bought. Staking SUSHI will bring you passive income, which is great for digital asset investments.

✅ SUSHI has performed relatively well in a short time

There are literally thousands of cryptocurrencies out there, and SUSHI has attracted the attention of many just about one year after launch. Initial success is worth celebrating, especially in a market that is unregulated. Some people have already earned so much by investing in SushiSwap. It remains a viable investment option for DeFi users.

✅ SUSHI is available on many platforms and liquidity is not an issue

One of the most important factors to consider when choosing a digital coin is liquidity, which refers to the ease with which an asset can be converted to cash. In the cryptocurrency market, liquidity is a function of the availability of the coin in popular exchanges. SUSHI is now available in major cryptocurrency exchanges so you will be able to sell whenever you want. Liquidity is also an indication that a digital asset is widely acceptable.

Reasons to Think Twice About Investing In SushiSwap

While there are several wonderful reasons to invest in SushiSwap, there are also reasons to be careful about the network and its token. In fact, SUSHI is a risky investment, and understanding the risks well before investing can save you from future heartaches. In summary, here are some of the reasons you may want to ignore SUSHI:

 SushiSwap is operating in a very competitive market

We've stressed that DeFi is a fast-growing sector. While this is a good thing, it is also an issue when you consider the fact that there are so many projects in the sector. In fact, there are several automated market makers, making the market super-competitive. Though SushiSwap has enjoyed goodwill in the sector, it still has a lot to do to remain relevant for years. It must continue to improve its services to remain competitive and valuable.

 SushiSwap is a relatively new platform and the token has very little historic data

Investing in new cryptocurrencies can be both rewarding and risky. Buying early means you will likely buy when the price of the token is low, but no one can confidently tell how well new projects will perform in the future. We also have little historic data when it comes to studying Sushi. In fact, there is no way to tell its pattern of growth, and that increases the risks of investing right now.

 SUSHI has shown signs of extreme volatility

Volatility is one of the factors that make the cryptocurrency space a highly exciting market. Every cryptocurrency, including Bitcoin and Solana, is considered a volatile asset. Volatility presents risk and is also one of the reasons people make big profits on the market. Extreme volatility, however, makes trading and profitmaking harder. SUSHI has already shown signs of extreme volatility, which means informed investors must play cautiously.

 The DeFi sector may face regulations in the near future

Decentralized finance has been embraced by many, but most financial institutions and governments are critical of its sustainability. It is likely that some regulators will begin to interfere in how most DeFi projects are launched and run. Increasing regulation of the sector will have a negative effect on all projects and assets in DeFi. Of course, SUSHI will be directly affected by the consequences of increasing regulation.

 The rug pull by the original developer has affected investors’ trusts

Many people are critical of the way projects are launched in the cryptocurrency space. There have been several cases of fraud in the sector, which is why there was a big backlash when the anonymous developer of SushiSwap (Chef Nomi) made a heavy withdrawal from the network. Though he/she returned the funds and apologized, many are sceptical about the safety of investing in the token. Another rug pull that will further ruin the reputation and value of the coin may still occur in the future.

Where Can You Buy SUSHI?

Already, we have stated that the most straightforward way to invest in SushiSwap is to buy the token. You can trade the token or use it for several other activities within the ecosystem that bring rewards. But where can you buy the token?

Like other crypto assets, SUSHI is available across a wide selection of platforms. These platforms are generally divided into three categories. There are centralized exchanges, there are cryptocurrency brokerages, and there are other trading/investment platforms or apps that are neither official exchanges nor brokerages.

Depending on the features of the platform you want to buy SushiSwap from, you may need different things. The platform you choose to buy from will also determine the experience you will get. It is best to understand the different platforms and choose wisely when it is time to buy any crypto at all.

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Best Platform To Buy SUSHI

As mentioned earlier, there are three major categories of platforms where you can buy and sell cryptocurrency assets, including the SUSHI token. Many cryptocurrency traders choose to buy their assets from official cryptocurrency exchanges. While it is easy to buy from many central crypto exchanges, some experienced investors ignore them for obvious reasons. They are not as safe as they claim to be.

Many exchanges have been hacked in the past, and people lost lots of money in such hacks. It is particularly dangerous to leave digital assets in exchanges after making a purchase.

Exchanges are considered risky for inexperienced users, but the regular apps that are neither exchanges nor brokerages are comparatively riskier. While there are genuine platforms/apps for trading digital assets, there are many that are nothing better than scammers den. Unless you are conversant with an app and have seen that it has positive reviews, it is better to avoid then.

From what we have discussed in the two paragraphs above, you can tell that we advocate buying cryptocurrencies from brokers. Many progressive brokerage firms have seen that cryptocurrencies present lots of opportunities for potential investors and have started making their platforms available. Some of the biggest players on the market allow users to buy and sell cryptos, stock, options, and other investment vehicles. eToro is one of the best brokerages to buy SUSHI and several other tradable assets.

What Next After Buying SUSHI?

Buying SUSHI is only one step in investing in SushiSwap. There are several ways you can use the asset to generate returns. Most people will buy when the price is low and aim to sell when the price is high enough to yield the sort of profit they need. Regardless of what you intend to do with the Sushi token and how long you intend to hold it, you need to keep it safe in a crypto wallet.

There are several cryptocurrency wallets, which means you also need to choose carefully. You should consider the security features of the wallet you intend to use and user-friendliness. Choose a secure wallet that is also easy to use. It is also best to choose a multi-token digital wallet so you can keep several crypto assets secure in it.

Many cryptocurrency networks provide wallets for users. Even eToro has one of the most impressive digital wallets out there. Having access to this wallet is one of the benefits of choosing eToro when you want to buy SUSHI or any other cryptocurrency.

Read Also: Why SushiSwap Will Skyrocket

Key Points to Keep In Mind

We've discussed SushiSwap in a manner that can help you make an informed decision about the token. Of course, we've covered a lot here, so it is understandable that most people will need a sort of summary to guide their final decision. Here are the key points to keep in mind when you want to finally decide to either invest in SushiSwap or ignore it:

  • SushiSwap is an automated market maker that was forked from Uniswap.
  • SushiSwap was launched by anonymous people, with Chef Nomi (pseudonym) named the principal founder.
  • SushiSwap is an improvement on Uniswap and has been adopted by many DeFi users as a helpful tool.
  • SushiSwap was launched in August 2020 but has gain popularity in 2021.
  • SushiSwap allows users to swap cryptocurrencies and perform other activities like borrowing and lending.
  • SushiSwap is very easy to use – you don’t even need an account to get started, which is one of the reasons it will continue to attract users.
  • SushiSwap presents different ways to earn like staking and farming – providing passive income to loyal investors.
  • SUSHI is the governance token of SushiSwap, meaning buying the token gives you voting rights for its future, including vital upgrades and protocol changes.
  • SushiSwap is part of the fast-growing DeFi subsector.
  • SUSHI is relatively new and has shown signs of extreme volatility.
  • SushiSwap is in a very competitive market, and it will need to do more to remain in the game for long.
  • The anonymous founder of SushiSwap once withdraw 38,000 worth of Ethereum from the network and only returned it after facing a backlash.
  • There are different places you can buy SUSHI from, but eToro is one of the best places for traders and investors of all experience levels.

Final Words

SushiSwap has become a popular automated market maker in just one year and a few months of being launched in the DeFi scene. It benefitted significantly from the support of many DeFi platforms in the early days and was listed on many central exchanges a few days after launch.

Should you invest in SushiSwap? Well, it is your call. Though it is looking like a solid project, it is in a highly competitive market. You may get significant returns if you invest now, but it is not looking like the best long-term investment.

Remember that investing in cryptocurrencies is generally risky, especially when you are dealing with a relatively new coin that was launched by anonymous individuals.

You should only invest what you can lose, and remember that eToro may be the best platform when you want to buy. 

eToro – Best Platform To Buy SushiSwap

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

Virtual currencies are highly volatile. Your capital is at risk.

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