Trustless, permissionless, and immutable cryptocurrency exchanges are gaining popularity on the Ethereum network. These exchanges are called DEX, or decentralized exchanges. Instead of being controlled by a centralized entity like Coinbase or Robinhood, SushiSwap uses code on Ethereum’s blockchain to facilitate cryptocurrency trading. Learn how to buy SushiSwap (SUSHI) tokens now.
What is SushiSwap?
SushiSwap is an automated market maker (AMM) based on the Uniswap exchange. SushiSwap took market share from Uniswap as the platform offers more incentives to liquidity providers through its SushiSwap token. Automated market makers do not use order books. Instead, smart contracts hold cryptocurrencies in liquidity pools to provide liquidity to traders on the platform.
Let’s see how smart contracts are used on DEXs like SushiSwap. Investors send their cryptocurrency tokens to a liquidity pool, which is the smart contract that holds crypto assets for liquidity. For example, an investor can provide liquidity to the Sushi-Eth smart contract. The investor would have to send 50% Ethereum tokens and 50% SushiSwap tokens to the smart contract, and the liquidity pool will do the rest.
The liquidity pool calculates the price of each crypto asset using mathematical formulas. When a person trades on the platform, they have to pay a transaction fee of 0.3%. This commission is paid directly to the liquidity providers, in proportion to the amount of liquidity they provide.
Brief history of SushiSwap
SushiSwap was born from the derivation of the Uniswap protocol. This means that the program is basically the same as Uniswap, but it has some minor differences.
The Sushi token is used more actively for governance, allowing token holders to vote on program upgrades. In addition, Sushi tokens are used as rewards for liquidity providers, enticing investors to stake their crypto assets with SushiSwap rather than Uniswap.
SushiSwap started operations in August 2020 and quickly appreciated to over $ 10 per token. Since then, the token has stabilized below $ 1 before rebounding with the crypto bull market in 2021. SushiSwap is currently trading just under $ 15 and its market cap of nearly $ 1.5 billion.
How to buy SushiSwap (SUSHI)
- Open an account online.
There are many ways to buy SushiSwap, but the easiest way is through a centralized exchange. You can buy and sell Sushi Tokens on Coinbase and Binance, so if you already have an account with one of these cryptocurrency exchanges, you’re good to go.
To create an account with Coinbase or Binance, you will need to verify your identity before you start investing in crypto. Exchanges must verify U.S. citizens for tax purposes, so be prepared to provide your Social Security number, driver’s license, and home address.
- Buy a wallet (optional).
Although Coinbase is considered one of the most secure exchanges to use for cryptocurrency, it’s a good idea to store your crypto in a dedicated cryptocurrency wallet. Crypto exchanges have been hacked several times in the past, leaving investors with nothing.
To mitigate the risk of a security breach, you should consider storing your crypto assets in a software or hardware wallet. Software wallets encrypt your cryptocurrency with a set of public and private keys, and it’s almost always free to use.
If you want to store your crypto in the most secure way possible, you should consider using a hardware wallet. Hardware wallets store your cryptocurrencies offline on a physical device, preventing online hackers from stealing your assets.
- Make your purchase.
To buy SushiSwap, you can place your order as a market or limited buy order. Market orders will instantly buy your SushiSwap tokens at the market price, while limit orders will only buy SushiSwap if the token price reaches the price at which you set your limit order.
Binance also gives you the option of buying Sushi Tokens with Bitcoin, which some crypto investors prefer. By using the SUSHI-BTC pair, you can track your investment against the price of Bitcoin rather than USD.
Bonus section: Since altcoins like SushiSwap are very volatile, many investors like to average their purchase price. To do this, you will need to gradually buy your position in SushiSwap, rather than making your entire investment at once.
Best crypto exchanges for SushiSwap
Best crypto wallet for SushiSwap
Best Hardware Wallet: Ledger Nano S
Ledger has been selling cryptocurrency wallets to the masses since 2014. The hardware wallet supports over 1000 different cryptocurrencies, so this is probably the only hardware wallet you will ever need. The Ledger Nano S is an affordable option for most crypto investors, at just over $ 50 on Amazon.
Best Software Wallet: Coinbase
Coinbase has its own dedicated wallet for storing cryptocurrencies, which makes it easy to secure your assets against hackers. Coinbase Wallet supports a multitude of assets, including non-fungible tokens (NFTs), Bitcoin, and Ethereum. Since the wallet can connect to DeFi apps, you also have the option to convert your crypto into other assets right from your wallet.
Trade, sell or convert your sushi chips
When you want to sell your SushiSwap tokens, you need to send them from your cryptocurrency wallet to your cryptocurrency exchange. If you are using Coinbase Wallet, you can directly convert your SushiSwap tokens to any other cryptocurrency supported by the wallet.
Current crypto prices
The cryptocurrency market has been in a bull market and DeFi protocols such as SushiSwap and Uniswap have received a lot of attention. These platforms offer several advantages over centralized exchanges, such as anonymous trading and increased security.
While Bitcoin has appreciated by around 100% over the past few months, DeFi tokens like Uniswap and SushiSwap have seen gains of 1000% in the same time frame.
Is SushiSwap a good investment?
With Uniswap V3 released in early May, SushiSwap might find it difficult to compete with the new features of Uniswap. Uniswap has long been the go-to DEX on Ethereum, and without additional incentives, it can be difficult for SushiSwap to take market share from its biggest competitor.
SushiSwap is set to perform well during the bull market as more and more attention is focused on DeFi. It is worth considering an investment in SushiSwap today.
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