Speaking of the dazzling digital currencies in 2020, in addition to Bitcoin, we have to mention Sushi Coin, especially when DEFI projects became a trend, Sushi Coin can be said to have successfully broken through in one fell swoop!

However, even so, there are still many investors in the currency circle who don’t know much about Sushi Coin. In fact, Sushi Coin is the token of the Sushiswap decentralized exchange. In Sushiswap, liquidity providers can directly obtain 0.25% of the fees, and the other 0.05% will be exchanged for SUSHI tokens.

Even with such a simple introduction to Sushi Coin, investors may still not understand what SUSHI Coin is. Below, the editor will give you a comprehensive introduction to Sushi Coin. I hope that through this article, investors can have a deeper understanding of Sushi Coin.

What is SUSHI coin?

SUSHI is the token of the Sushiswap decentralized exchange.

Sushiswap did not actually create a new model. It still continues the core concept of Uniswap and is still an AMM model. So the token pool of Sushiswap is roughly the same as that of Uniswap. However, there are also many differences between Sushiswap and Uniswap.

The biggest difference between the two is that Sushiswap adds token economic incentives, in other words, a portion of its transaction fees is distributed to holders of Sushiswap token SUSHI. In addition, the front-end interface of Sushiswap is the same as Uniswap.

The core of Sushiswap is to increase token economic incentives. Sushiswap's liquidity providers can obtain incentives in the form of SUSHI tokens.

As we all know, on Uniswap, liquidity providers receive corresponding fees based on the liquidity share they provide, which can only be a short-term transaction and cannot obtain long-term benefits. The SUSHI token represents the potential benefits of the entire Sushiwap protocol. It can capture part of the protocol's fees in the long term. Therefore, even if early liquidity providers no longer provide liquidity for the protocol, the SUSHI they obtained from mining K before can continue to obtain the long-term value of the protocol.

Uniswap's token incentive model combines the long-term benefits of early liquidity providers and the protocol. In addition, if liquidity providers no longer provide liquidity for Sushiswap, the tokens held by the corresponding early liquidity providers will also be relatively reduced, because other liquidity providers will continue to provide services for the protocol, so other providers can continue to obtain more tokens.

Sushiswap releases 100 SUSHI tokens per block, which will be evenly distributed to all supported token pools. In the first 100,000 blocks, SUSHI production was higher, with 1,000 SUSHI released per block. The purpose of this setting is to incentivize Uniswap's liquidity providers to provide liquidity for Sushiswap in the future.

How to get SUSHI by mining K?

The 13 liquidity pools that can participate in K mining in the early stage are:

USDT-ETH;USDC-ETH;DAI-ETH;sUSD-ETH;COMP-ETH;LEND-ETH;SNX-ETH;UMA-ETH;LINK-ETH;BAND-ETH;AMPL-ETH;YFI-ETH;SUSHI-ETH。

About two weeks after the launch of the protocol, Sushiswap will launch a liquidity pool migration plan for Uniswap. The Uniswap liquidity pool that previously participated in Sushiswap K mining will be migrated to Sushiswap. During the migration process, the first step is to redeem the token pairs on Uniswap, and then migrate these token pools to Sushiswap. The new token pool is highly similar to the Uniswap token pool, but the fee distribution is different.

After the relocation is completed, traders can trade tokens in the token pool on Sushiswap. The stakers do not need to do anything during the whole process, and they can obtain transaction fee income and SUSHI tokens from the liquidity provided by Sushiswap.

Liquidity providers in Uniswap can get 0.3% of the transaction fee. But in Sushiswap, liquidity providers can directly get 0.25% of the fee, and the other 0.05% will be converted into SUSHI tokens. In addition, in order to ensure the normal operation of R&D and operations, 10% of the SUSHI tokens will be used for development. The larger the transaction volume on Sushiswap, the higher the fee captured by SUSHI.

Sushiswap’s Controversies and Risks

Some DeFi experts are against SushiSwap. Brendan Forster, co-founder of Dharma Labs, hopes that the SushiSwap experiment "failed." Will Warren, co-founder of the decentralized exchange protocol 0x, also said that it would be "terrible" if SushiSwap won.

Because Sushiswap’s functions are similar to Uniswap’s and its UI is similar to YAM’s, some people think that Sushiswap is a cheap plagiarism that jeopardizes security and innovation. Others think that Sushiswap may have been a scam from the beginning because there are loopholes in their code, which may cause users to lose their assets.

Therefore, although SUSHI is very popular, before participating in liquidity mining, you also need to consider your own risk tolerance and do reasonable risk management.

The role of SUSHI in the Web3.0 era

First of all, one of the roles of SUSHI (Sushi Coin) in the Web3.0 era is to be a booster of decentralized finance (DeFi).

One of the key features of the Web3.0 era is the application of decentralization and smart contracts. SUSHI uses smart contracts and blockchain technology to provide a financial transaction method that does not require third-party trust, achieving higher security and transparency. As a DeFi platform, SUSHI enables users to conduct diversified financial activities such as trading, lending, and liquidity mining, providing users with more choices and flexibility.

Secondly, SUSHI (Sushi Coin) is also characterized by openness and interoperability in the Web3.0 era.

One of the key goals of the Web3.0 era is to achieve interconnection between various blockchains and break down the barriers of traditional isolated blockchains. As a decentralized platform, SUSHI is committed to providing interoperability solutions. Through cooperation and integration with other projects and blockchain networks, SUSHI enables users to transfer and trade assets between different blockchains, promoting the development and cooperation of the entire ecosystem.

Third, SUSHI (Sushi Coin) has a very broad development prospect in the Web3.0 era.

As blockchain technology continues to mature and its application scenarios expand, more and more people are beginning to realize the potential and advantages of decentralized finance. As an important project in the DeFi field, SUSHI will continue to play its role in liquidity mining, trading, and lending, and attract more users and capital inflows. At the same time, the technical team of SUSHI will continue to innovate and improve to adapt to market needs and changes.

Therefore, SUSHI (Sushi Coin) is expected to continue to grow and develop in the Web3.0 era and become an indispensable part of the entire ecosystem.

Everyone, please move your hands and pay attention~

Thank you for your support, see you next time!