As a DeFi believer, you must have heard of Sushiswap vs Uniswap. If Uniswap is considered one of the top DEXs. Then SushiSwap is evaluated as an upgrade and is strongly developed in terms of design.
In this article, it will help you have a specific assessment of these two protocols when comparing Uniswap and SushiSwap. Please go right to the following article to find out the details.
What is Sushiswap?
An example of an automated market maker is SushiSwap (SUSHI) (AMM). AMMs are decentralized exchanges that use smart contracts to make a market for any two tokens. They are becoming more and more popular among crypto users.
SushiSwap was released in September 2020 as a fork of Uniswap. Since then, AMM has become a synonym for decentralized finance (DeFi) and the trading boom in DeFi tokens that has gone along with it.
What is Uniswap?
Uniswap is a well-known decentralized trading protocol that is known for making it possible to trade decentralized finance (DeFi) tokens automatically.
Uniswap is an example of an automated market maker (AMM). It started in November 2018, but has become much more popular this year thanks to the rise of decentralized finance and the volume of token trading.
Pros and Cons
Sushiswap Vs Uniswap: Which Decentralized Exchange is Better?
There are a few key differences between Sushiswap and Uniswap. Perhaps the most notable difference is that Sushiswap uses an automated market maker (AMM) model, while Uniswap uses a liquidity provider (LP) model.
With Sushiswap, users are able to add liquidity to the pool and earn fees in return. The pool is then used to trade tokens automatically based on pre-determined rules. This allows for a more seamless and automated trading experience.
Uniswap, on the other hand, requires users to add liquidity to the pool in the form of ETH and ERC20 tokens. They are then able to earn fees in return for providing this liquidity. However, this also means that users must manually trade tokens on the platform, which can be a more cumbersome process.
- As was previously mentioned, Uniswap used to incentivize liquidity providers by distributing UNI tokens through “liquidity mining”. Since the platform knew the liquidity mining software would only run for a limited time, it disabled it as planned upon its eventual restart.
Since this initial token release, users had no other means, beyond the Uniswap grants program, of acquiring additional UNI tokens.
Uniswap’s developer, Hayden Adams, has said that liquidity mining would return to the platform soon, but in the meantime, the company must communicate a candidate’s election date.
- Meanwhile, SushiSwap’s liquidity mining is still operational. Those that stake dish governance tokens in liquidity pools can earn more tokens indefinitely.
- Concentrated liquidity is a concept established by Uniswap, in which liquidity providers keep the majority of their coins inside certain price bands.
Therefore, liquidity providers supply more substantial liquidity at a certain price range, giving rise to individualized pricing curves. Larger swaps can be created because of the abundance of liquidity in the anticipated price range of a particular commercialism pair.
- There are no announced plans to implement this concept into the SushiSwap platform, thus for now, it is not available.
Lending and trading on margin
- Uniswap is dedicated to its role as a DEX by offering services tailored specifically for DEXs.
- SushiSwap, on the other hand, is branching out into other areas of Defi. The platform introduces “BentoBox”, a token storage solution for DApps (DApps). Kashi, a loan and margin trading DApp, is the only one available on the BentoBox at the moment. Kashi uses the tokens for margin trading, lending, and borrowing, while the BentoBox simply stores them like a wallet.
Reward system for latest tokens
In addition, Uniswap does not provide any bonuses to newly issued tokens. The “Onsen Program” on the other hand is a liquidity provision network for new coins, and is a feature exclusive to SushiSwap.
This platform provides additional SUSHI awards to speakers of these newer tokens to aid in the distribution of these initiatives through the Onsen system.
Incentives for users to acquire such tokens for staking purposes are increased by the bonus tokens, which in turn helps the project expand.
Total Value Locked (TVL)
The graph below shows that by late August 2020, SushiSwap has already established itself as the market leader in terms of TVL.
Because the platform offered SUSHI benefits that Uniswap did not have, it was able to drain liquidity from Uniswap, as was indicated above.
Midway through September 2020, though, Uniswap countered by releasing the UNI token, which helped push its TVL above $2 billion and above SushiSwap. While SushiSwap’s TVL is $3.4 billion, Uniswap’s is $4.0 billion.
The total value locked for Uniswap and SushiSwap in the last year.
The term “Trade Volume” is used to describe the total dollar amount of all deals conducted on a given exchange.
Another primary indicator of a platform’s health and development. In comparison to SushiSwap’s weekly transaction volume of $1 billion, Uniswap’s is $7.7 billion, a difference of about 700%. According to the data presented below, Uniswap processes over $1 billion in daily trading volume.
A monthly breakdown of the average daily volume of trades on Uniswap and SushiSwap. (Dune Analytics is the source of this information).
There are a few key differences between Sushiswap and Uniswap.
- First, Sushiswap supports a wider range of currencies than Uniswap. This includes both fiat currencies and cryptocurrencies.
- Second, Sushiswap offers a staking program that allows users to earn rewards for providing liquidity to the platform.
- Finally, Sushiswap has a built-in governance system that allows users to vote on proposed changes to the platform.
There are a few key differences between Sushiswap and Uniswap when it comes to security.
- For one, Sushiswap uses an automated market maker (AMM) model, which means there is no central point of control or failure. This decentralized design makes Sushiswap more resistant to attacks and manipulation.
- When it comes to security, both Sushiswap and Uniswap are exchanges that have been built on the Ethereum blockchain. This means that they both offer a high degree of security, as the Ethereum blockchain is incredibly secure. However, there are some differences between the two exchanges in terms of security.
- For starters, Sushiswap is a decentralized exchange, while Uniswap is a centralized exchange. This means that Sushiswap is more secure, as it is not reliant on a single entity.
- Additionally, Sushiswap offers a number of security features that Uniswap does not, such as 2-factor authentication and a whitelisting system.
- Another key difference is that Sushiswap uses a staking mechanism to provide security. Stakers can earn rewards for providing liquidity to the platform and helping to keep it secure. This provides an incentive for users to help keep the platform secure and helps decentralize the platform’s security.
- Finally, Sushiswap has a number of additional security features such as audit logging and an Insurance Fund. These features help to further secure the platform and protect users from losses in the event of an attack.
There are a few key differences between Sushiswap and Uniswap.
- Firstly, Sushiswap is available on a wider range of geographic locations than Uniswap. For over 264 countries for you to buy, while Uniswap is 263.
- Second, Sushiswap is available in Japan, while Uniswap is not. This means that Japanese users will have to use a different exchange if they want to buy or sell cryptocurrencies.
There are a few key differences between Sushiswap and Uniswap regarding fees.
- For one, Sushiswap uses a “pool” system where users can add liquidity to earn fees, while Uniswap simply charges a flat fee for each trade.
- Uniswap has different fee tiers, which all pay the liquidity providers in full. SushiSwap, on the other hand, charges a 0.3% fee for swaps, of which 0.25% goes to the LP, and 0.05% to SUSHI token holders.
- As a token holder, you’ll make more in SUSHI, but as a liquidity provider, you’ll make more in a Uniswap pool where you can make the full 0.3%.
- Additionally, Sushiswap’s fees are paid in the native token (SUSHI), while Uniswap’s fees are paid in ETH.
- Finally, Sushiswap allows users to set their fees, while the protocol sets Uniswap’s fees.
Ease of Use
When it comes to ease of use, Sushiswap definitely has the edge over Uniswap. The platform has a much more user-friendly interface that is easy to navigate and understand.
Additionally, Sushiswap offers a number of helpful tutorials and guides that can help users get started with trading on the platform.
In contrast, Uniswap can be a bit more confusing for users who are new to the world of decentralized exchanges. The platform does not offer as many resources to help users get started, which can make it more difficult to trade on Uniswap.
However, once users get the hang of how the platform works, it can be just as easy to use as Sushiswap.
There are a few key differences between Sushiswap and Uniswap when it comes to interest rates.
- For one, Sushiswap offers a much higher interest rate than Uniswap, making it a more attractive option for those looking to earn a higher return on their investment.
- Additionally, Sushiswap has a staking system in place that allows users to earn additional rewards for holding their tokens in the platform, while Uniswap does not currently offer this.
- Finally, Sushiswap requires users to lock up their tokens for a minimum of 3 days in order to earn interest, while Uniswap does not have any such requirement.
At a Glance
|Liquidity Mining||There will be no liquidity mining program beyond the initial distribution of tokens.||An active liquidity mining program is available on SushiSwap, and contributors to the liquidity pool will be rewarded with SUSHI governance tokens.|
|Opportunity for Lending and Margin Trading||Uniswap exclusively supports decentralized exchanges.||SushiSwap offers “BentoBox” for lending, borrowing, and margin trading.|
|Swap Fees||Three-tier fees based on liquidity providers’ risk.||All trading pairs have 0.3% swap fees.|
|Liquidity Concentration||Concentrated liquidity lets providers price tokens in defined ranges.||Concentrated liquidity lets providers price tokens in defined ranges.|
|Reward for New Tokens||No token launch bonuses.||Onsen Program rewards new coins with SUSHI tokens for staking.|
SUSHI vs UNI: Which is a Better Investment?
Uniswap and SushiSwap seem similar in terms of investment. Both are Ethereum-based and operate similarly. SushiSwap is an offspring of Uniswap, hence their infrastructures are comparable.
Uniswap has more locked-in value, which may appeal to investors. Most analysts forecast significantly greater growth for SushiSwap in the following years, therefore this may affect investing selections.
If you want to add extra DeFi tokens to your portfolio, SushiSwap or Uniswap are both good options. Both are likely to have high volatility in the future months, so establish a strategy and don’t be misled by short-term price changes.
You can still stake your existing tokens on UNI or SUSHI if you don’t buy them. These projects allow investors to put their tokens to work instead than keeping them in a wallet.
What is the difference between SushiSwap and Uniswap?
While everything on SushiSwap and Uniswap works exactly the same, the main differences are
- SushiSwap gives liquidity providers 0.25 percent of the pool fees and 0.05 percent of the pool fees to people who own SUSHI tokens.
- Even though Uniswap ended its UNI token farming period, SUSHI yield farming is still going strong, with some pools offering rewards of up to 80% APY.
- A different user interface. SushiSwap looks like a menu from a Japanese restaurant, with choices like “Onsen Menu” and “Omakase” where Uniswap’s app page is very simple.
- Aside from how rewards are made and some small differences in how to use them, SushiSwap and Uniswap are very similar.
How Do Sushiswap and Uniswap Work?
Uniswap is an automated market maker, which is a type of decentralized exchange (AMM). A decentralized exchange is one where orders are not managed by one person or group.
AMMs do this by setting prices and making trades with the help of smart contracts, which are programs that are written on the blockchain.
By doing this, they can offer DeFi, which is short for “decentralized financial services”. SushiSwap is just a copy (clone) of Uniswap that has been split off.
Is It Safe to Hold Cryptocurrency in the Sushiswap or Uniswap Exchanges?
There is no central authority governing the Sushiswap or Uniswap exchanges, so it is impossible to say definitively whether or not it is safe to hold cryptocurrency in these exchanges.
However, there have been no major security breaches reported by either exchange, and both have implemented measures to protect user funds.
Overall, holding cryptocurrency in either of these exchanges seems relatively safe.
Who Should Use Sushiswap or Uniswap?
Sushiswap is a decentralized exchange that allows users to trade Ethereum-based tokens. The platform is designed to be user-friendly and is suitable for beginners. Uniswap is a similar platform that also allows users to trade Ethereum-based tokens.
Both platforms are suitable for those who want to trade cryptocurrencies without having to go through a centralized exchange.
However, Sushiswap may be better for users who value security and liquidity. Uniswap may be a better choice for users who value flexibility and lower fees.
Which One Should You Choose?
So, which one should you choose? If security is your main concern, then Sushiswap is the better option. If you want to trade a wider range of tokens or you’re looking to save on fees, then Uniswap may be the better choice.
Many crypto initiatives will succeed while others will fail as the effects of DeFi spread throughout the industry. Unfortunately, the DeFi community will have to shoulder the responsibility whenever something goes wrong.
A cryptocurrency’s biggest supporters may be Anonymous, but a project led by an anonymous group or person will have trouble winning the support of the cryptocurrency’s user base.
However, the outcome of an independent audit would make or break the buzz surrounding Uniswap vs. SushiSwap.
Disclaimer: The information provided in this article is not investment advice from Cove Markets. Cryptocurrency investment activities are yet to be recognized and protected by the laws in some countries. Cryptocurrencies always contain financial risks.