Is Sushiswap a scam? Opinion and report 2022
With a name like that, many would think SushiSwap has to do with a food company.
Sushi swap? Well, yes, but not delicious rice rolls with vegetables or fish, but chips and cryptocurrencies.
What is it about this platform that made it so popular?
Will he be trustworthy?
I will tell you these and other things in this review. Let's see how Sushiswap works.
What is Sushiswap?
Sushiswap is an AMM-type platform, i.e. an automated Market Maker that also functions as a decentralized exchange (DEX), and all under the Ethereum blockchain protocol.
In other words, it is a Decentralized Finance (DEFI) platform that aims to facilitate trading with tokens and cryptocurrencies without having to go through traditional financial intermediaries.
Where do you come from?
It is a really new platform, born in 2020 under the development of a group of anonymous developers. Its main character is a certain chief Nomi, but nothing more is known about the character.
Shortly after its launch and after some unfortunate moves, Chef Nomi handed over control of the company to Sam Bankman-Fried, who has experience in the industry having served as CEO of FTX.
The real origin of this platform has to do with the attempt to improve the service of Uniswap, one of the giants in the DEFI space. Seen in another way, it is as if it were an improved version of this other platform.
It is basically a project very similar to Uniswap (see the Uniswap review) and therefore we can say that in a way it is as if it were an improved copy.
Which is better?
I don't know for sure. These are still very recent projects, so we will have to continue to observe their behavior in the years to come to see which one succeeds and which one does not.
The question of similar platforms on the Internet is not new. The online world is perfect for cloning.
Is Sushiswap safe?
Well, this is a recently launched decentralized project, so I can't say much about it.
In theory, it is a secure business model that works with smart contracts and under P2P protocols, so tokens and cryptos are always under the power of the user. Therefore, most of the security depends on it. If you have a good password and a good security system, it will be almost impossible for them to touch your funds.
That said, we are in an extremely volatile environment and we cannot guarantee anything.
To reassure potential investors, Sushiswap regularly undergoes private audits to try to find any security issues with the system.
In terms of regulations, it is not a regulated site, as is the case with the whole sector Defi, and with a good deal of crypto. In that sense, I can't say that other DEXs are better or worse.
We are in the Wild West, gentlemen. Anyone who wants 100% security should go to the bank in their area.
Is Sushiswap a scam?
For the moment I would say that this company is not a scam, but I could be wrong, you never know.
From what I see, it looks like a project set up for the long term and with the hope that the Defi financial sector will definitely take off.
Finally, my advice is not to invest too much money in this type of platforms yet. Certainly never money you can't afford to lose.
How is your governance?
Like all projects of this type, Sushiswap has a governance that determines its operation in the form of democratic user participation.
However, the governance of this dapp is still finalizing its operation, so if you are interested in the project I recommend that you keep an eye on the news in its Discord group.
How to register?
Let us see the steps required to register in this application. First of all, we are not dealing with a traditional business that requires opening an account with documents and so on. The only thing required is to enter our basic data and connect our private wallet.
- We register on the site
- We put our basic data: name, email, mobile/cellular
- Confirm the opening of the account with the email they send us
- Activate the account with the password of our choice
- We need to connect our Metamask wallet or some of the others available. Let's see the available wallets:
- Dappradar
- Wallet Connect
- Trello
- Coinbase Wallet
- Fortmatic
- doors
- Torus
- Once logged in, we are already inside the platform and we see the tokens and cryptos that we can trade
How to buy SUSHI
This platform also has its particular token.
It is listed on the DEFI markets and depends on the success of the platform. In a way, buying it is almost like investing in the platform or buying shares of it.
To buy this Token, it is best to use one of the exchanges already established in the market such as Coinbase, Bitpanda or Binance.
In this case, we are going to see how to buy with Coinbase, the American crypto giant.
The first thing to do is to open an account there, which is done by clicking on the registration button and following the corresponding procedure. This should have no complications beyond verifying our identity and waiting for them to confirm our account opening.
Once we have done this, we can go to the Coinbase website and search for the token, which we can see in the “operate” section, searching by name.
There we will see what we get, but not only because we also see that we get derivatives of it such as 3X Short Sushi, among others. This, for example, is short with leverage up to 3:1.
In this image, I am buying £200 worth of SUSHI, for which I have to pay a commission of £7,67 on Coinbase.
How Sushiswap works
Well, Sushiswap was designed to perform various operations in the token and cryptocurrency exchange market and lending and staking derivatives.
If you noticed at the beginning, it is a DAPP that depends on Ethereum, which from the outset tells us that to use it we will need this cryptocurrency. If you take a closer look, the boom in the defi world has a lot to do with the growth of ETH.
Therefore, we are going to have to buy Ethereum on other platforms like the ones I mentioned earlier. Once we have them, we will be able to create the Metamask wallets and another and we will already be able to trade on the Sushi platform.
I already explained that you need to join your wallet – in my case Metamask – which is a very simple process.
Once inside, one can choose what to do: Trade or Swap, Loans or staking?
Exchange or Swap
In this function, we can exchange the available cryptocurrencies or tokens for our own.
The most logical thing is that we have Ethereum in our wallet. That is why if we are going to buy another token, we will be able to see our current balance in the wallet and proceed with the transaction that we want.
For example, we can buy between the following tokens: AAVE, Binance Coin, Balancer, Compound, DAO, and a long etcetera.
Here it is important that you look at the commission you have to pay, which is seen below in “Liquidity provider fees”, and the amount to be received from the cryptocurrency/token, in this case 1 inch.
What do Sushiswap commissions look like?
Regarding the Swap functionality, the commissions are quite attractive, around 0,3% when registering a liquidity pool. There are also small transaction fees to pay.
From the perspective of liquidity providers, they receive 0,25% in swap or trading, while 0,05% goes to Sushi bar options, for those who own the sushi tokens.
Pool – Pool
Liquidity providers can earn 0,25% from all trades, proportional to their participation in the pool. All of this can be viewed live and funds can be claimed at any time.
The liquidity of the SUSHI/ETH pool is quite good on this platform and has paid off well so far. Will he continue to do so in the future? Much will depend on the development of the crypto market.
Giving liquidity in this way usually has an acceptable return and is less risky than exchanging or trading with the intention of speculating.
Yield farming
Yield Farming is another way to win prizes without need to swap.
Once in this section, we can see the yields of the available farms. Right now I see one that gives 198% annualized (BAC-WETH). Of course, you should know that it's because you have a much higher risk of things not going well. Then there are quite a few with more than 100%.
In general, you can find a fairly wide offer of this type of farms that are referenced on SUSHI.
loans
Another function of Sushiswap is to put our capital at the service of the loan market, where we can obtain different returns depending on the token we use.
For this, it uses an oracle that is usually found in Chainlink, that is, this other platform is the one provided by the market to be able to carry out these transactions.
All this works seamlessly and on the Sushiswap page we can see the different features of the loans like:
- Token for lending (USDT, USDC, DAI, etc.)
- Oracle
- AVR
- Borrowed (in percent)
- Borrowed money from said token
In option BentoBox, we can borrow tokens, for which we will have the possibility to see the conditions in a similar way to what I have just mentioned.
sushi bar
This is another of the many services of this DEFi-like platform broker, which involves staking Sushi in exchange for receiving xSushi, which in turn allows you to farm in pools of that token, giving you the right to receive a percentage of platform fees.
Conclusion – Final Opinions
Well, as we have seen, Sushiswap is a very capable platform that tries to offer a complete decentralized finance experience.
Many may doubt whether this is a legitimate project or not, but I think in this case we are dealing with a company that is designed to stay in the market.
This company has many followers and allies. For example, the Discord group has over 25 members, as well as over 000 SUSHI token users.
Among its partners we have Aave or Yearn Finance, two of the most established projects in the challenge market.
What happens is that it is still too early to determine if the project will end up being a giant.
Anything could happen, collapsing in the future or becoming a Binance challenge, and if that happened, the growth it could have from here would be brutal.
More information on website.
