SushiSwap Review – How Does This DeFi Exchange Measure Up?

About SushiSwap

SushiSwap is a decentralized exchange (Dex) built on the Ethereum blockchain where you can swap, earn, stack yields, lend, borrow, and use leverage for hundreds of different crypto assets. Though built on the Ethereum chain, SushiSwap supports 14 different blockchains, including Binance, Polygon, and many others. One of the more appealing qualities of decentralized exchanges like SushiSwap is there are no KYC or AML requirements—users simply need to connect one of the 20+ wallets they support to use their services. You will, however, need the coin/token for whatever chain you use through their platform to pay for gas fees.

Multi-Chain AMM

SushiSwap’s automated market maker is where you will go to swap (exchange) and provide liquidity to receive 0.25% of all trades on the pair of assets you pool proportionate to your total share of the pool.

The interface is exceptional, but it could be a little confusing to those unfamiliar with the process or unique characteristics of Dexes. That said, the list of supported assets is in the hundreds with 2,524 pairs, so whatever you are interested in swapping or pooling is almost certainly available—just keep the gas fees in mind, which you can see with the little green icon near the top right of the order panel.

SushiSwap Farming

SushiSwap has an almost overwhelming amount of farming pairs to choose from to earn yield. You can filter the farming pairs by type (Kashi Farms, SushiSwap Farms, etc.) or simply search for a pair in the search bar. Once you find a pair you like, you can click on it to see the annualized APR and investment details.

To participate in the farming, you will have to first provide liquidity for the pair you chose, approve and deposit your SLP tokens into the farm by staking them, and then harvest your rewards until you are ready to unstake your SLP. It’s a somewhat complicated process, but the interface is extremely user-friendly, and SushiSwap does an excellent job of walking you through the the whole thing via the ‘?’ tab near the top left of the pair panel.

Lend/Borrow

Another useful service SushiSwap offers is the ability to participate in lending and collateralized borrowing. Different asset pairs have different associated APRs, and there are over a hundred supported pairs, but lenders can expect to earn anywhere from a few basis points to 30%.

Borrowers can expect to pay around 0.25% or 1% (though some APRs can reach as high as 50%). You can borrow up to 75% of your collateral and repay at any time with accrued interest.

Staking on SushiSwap

If you have SUSHI (their native token), you can head to the SushiBar (their staking service). For every swap on the exchange on every chain, 0.05% of the swap fees are distributed as SUSHI proportional to your share of the SushiBar. When your SUSHI is staked into the SushiBar, you receive xSUSHI in return for voting rights and a fully composable token that can interact with other protocols. Your xSUSHI is continuously compounding, and when you unstake, you will receive all the originally deposited SUSHI and any additional from fees.

SushiSwap Fees

While the complexity of their platform might suggest an equally complicated fee structure, SushiSwap’s fees are very straightforward. Whenever you trade on SushiSwap, you’ll pay a 0.30% fee, with 0.25% going to liquidity providers in the chosen pool and 0.05% going to SUSHI token holders with tokens staked in the SushiBar. However, as mentioned earlier, there are also gas fees corresponding to the chain you are using to transact, which can vary depending on traffic on that chain.

Tutorials

SushiSwap has an incredible library of tutorials you can access at the bottom of the homepage under the ‘Support’ section. Here you can learn about the SushiSwap token and all their different services like yield farming, staking, swapping, and lending. They also have walkthroughs for placing orders, setting up wallets, ‘how to multichain,’ and plenty more. Each tutorial includes step-by-step instructions, reference links, pictures (when relevant) and does a great job of making fairly high-level material digestible to the average user.

SushiSwap User Support

Given SushiSwap is not a traditional exchange, they do not have a traditional support system. However, in addition to their tutorials, they have a very robust Discord community and forum to engage with the community members and get help with whatever you need.

Normally community support is a bit lackluster, but their discord alone includes a wealth of information and thousands of active users who will undoubtedly know how to help you with any of the problems you face.

Conclusion: SushiSwap 

Decentralized exchanges like SushiSwap tend to have very similar strengths and weaknesses, namely, they require no identify verification, they have a mountain of supported assets, and they generally have a lot of crypto services like yield farming and borrowing/lending. However, you will usually pay for these advantages with gas fees, and they have a tendency to be more exchange oriented than trader focused. You can always use charts from another platform like TradingView and just use SushiSwap as your broker, but it would be nice to see them include a charts section. 

Now, while I could compare SushiSwap to centralized exchanges like Binance or OKex if all you’re after is crypto services and a plethora of tradable assets, it’s probably more fair to compare it to other Dexes because centralized vs. decentralized exchanges is usually a line in the sand for traders.

I prefer centralized exchanges for their simplicity and lower fees, but many traders view decentralization and anonymity as the main selling point. Though Dexes like SushiSwap can be useful to people who can’t use certain centralized exchanges because of where they live, most people will probably want to go with a centralized exchange to keep things simple, especially if you’re concerned about taxes.

However, if you are someone who genuinely prefers or desires to use a Dex, choosing between SushiSwap, Uniswap, Monolith, 1inch, or any of the other Dexes will likely depend on which UI appeals to you most. The fees and markets for their different services may vary slightly, but they are all so similar that the real differentiating factor will likely be the interface. SushiSwap has a beautiful interface, and the sushi theme is quite quirky and appealing, so I think it stands out.

That said, I would look into all the top Dexes because they all have their quirks and may appeal to different people in different ways. I’d say you can’t go wrong in choosing SushiSwap if you’re dead set on a Dex because of its aesthetic look, helpful tutorials, and abundance of services, but I would explore all the Dex competitors to see for yourself which you prefer.