SushiSwap (Ethereum)

The decentralized platform was established to solve the liquidity problem which is common for many decentralized projects. Since numerous decentralized marketplaces are not connected to each other due to the specifics of the industry, exchanges often lack liquidity. Thus, the solution to this problem required a special approach.

Uniswap was one of the first platforms to successfully implement the new mechanism with a unique architecture that has resolved the liquidity problem. Having established the facility, the team went on developing it, thus contributing to the growth of the decentralized sector. Still, there was a missing point in the development strategy of the platform since it lacked its native token. The Sushi ecosystem that was launched on Uniswap took advantage of this omission when they decided to separate and designed their own native token for the users of the system.

Sushiswap's contribution to the DeFi industry

Sushiswap is a community-driven organization. The first innovation introduced by the team after the release of the platform became the issuance of its own token known as SUSHI in September 2020. It’s worth adding that initially, Uniswap didn’t plan to move in this direction, but the founders had to reconsider the question as well after the Sushiswap migration. The incident caused the release of UNI on Uniswap. The ability to recognize mistakes and immediate measures taken by Uniswap helped it achieve new positions in the decentralized industry.

Apart from the operations on the DeFi exchange, the Sushiswap ecosystem offers several types of smart contracts related to governance, rewards, and other activities. Though the blockchain was first launched on the Ethereum blockchain, it has also accomplished a number of integrations with other blockchains. The ecosystem tries to expand its presence online contributing to its stability and strengthening the DeFi industry in general.

Although the migration of Sushiswap to a new platform was an unexpected move for Uniswap and the cryptocurrency community, it opened new horizons for both projects and made the industry more versatile. Both platforms have evolved into large marketplaces determining the development of the decentralized community and raising global awareness of the cryptocurrency industry.

Advantages of Sushiswap on Ethereum

Network supporters get a reward in SUSHI per generated blocks thanks to the MasterChef contract endowed with minting rights for the SUSHI token. In fact, all incentive mechanisms initiated within the system are based exactly on this contract.

Although Sushiswap launched its project as a fork of another one, afterward it attracted highly qualified specialists to implement new features. Its on-chain protocol enables users to exchange tokens using the AMM mechanism that employs liquidity pools instead of order books to swap assets. Thanks to innovations used by the system, users have an opportunity to create liquidity pools for ERC20 tokens of their choice by providing ETH.

The community-run project has its own governance system that helps to solve important issues through the voting procedure. The fees collected by the platform are shared between the users of the ecosystem, those who hold Sushiswap tokens, and liquidity providers (LPs). Members of the community can also earn additional revenues via staking and farming. The platform tries to create other products as well such as BentoBox lending solution to expand the list of its offerings.

Sushiswap security

To ensure the security of users’ assets, the code of Sushiswap was audited twice. In September 2020, the platform passed a security audit that hadn’t revealed critical or high severity issues on the platform. A week later, Quantstamp, a well-known security company, announced the results of their check, during which the specialists identified 10 security flaws within its software. The issues weren’t fatal, though, and were easily corrected by developers.

Origins of Ethereum

Ethereum was developed by the programmer Vitalik Buterin in 2013 as an alternative network to Bitcoin. However, it wasn’t just a substitute for Bitcoin but employed a multifunctional approach to the asset. It was designed to be more than pure digital money and a means of online payment enabling other blockchain applications to run on top of the code. It has changed the development of the cryptocurrency industry in general and opened new horizons in decentralized finance. Using the smart contract programming language Solidity, Ethereum provides a robust foundation for decentralized projects like Sushiswap.

The importance of Ethereum for the development of DeFi

It would not be an exaggeration to say that the whole digital economy runs on top of the Ethereum network, including the ecosystem of decentralized finance where Sushiswap plays one of the key roles.

Sushiswap is running on Ethereum like most other decentralized projects while Ethereum itself with over 200 decentralized projects deployed on the network presents the largest DeFi ecosystem. At the time of writing, only about 10% of the DeFi platforms are deployed outside of the Ethereum ecosystem.