This is a guide on how to buy SUSHI from Sushiswap, or in the early days how to farm SUSHI as well. Let’s look at more details on SUSHI and where it sits in the broader DeFi ecosystem specifically around decentralized exchanges (DEXes).
What is Sushiswap and SUSHI?
Without mincing words, Sushiswap is a Uniswap clone, but with a token. Yes, they want to take on Uniswap, the DeFi AMM (Automated Market Maker) juggernaut head on. They think the token, SUSHI, can provide that competitive advantage as well as initial liquidity migration from Uniswap.
However, don’t be fooled by that simple vision. After less than 12 hours of launch, the protocol has over $270 million locked in its contracts. That’s right, $270,000,000 is sitting in its smart contracts right now, less than 12 hours after launch. Clearly it has attracted some early yield farmers but also hopefully long-term users.
The plan to bootstrap Sushiswap is devious or ingenious depending on your point of view:
- Give away most of the SUSHI tokens to yield farmers, some of the most active crypto traders and users.
- Yield farming is done via Uniswap-LP tokens. In 2 weeks after launch, the Uniswap-LP tokens will be liquidated and converted to Sushiswap-LP tokens, thus providing initial liquidity.
- LP fee is 0.25% and 0.05% per trade goes to holders of SUSHI tokens, thus incentivizing them to hold on to SUSHI tokens as a form of revenue stream based on the exchange’s usage.
In a nutshell, Sushiswap is Uniswap with a token before Uniswap could ever come up with a token. Unlike Uniswap, Sushiswap isn’t VC funded and can move at a much faster pace than VC backed startups.
How to Farm SUSHI
You can currently farm for SUSHI instead of buying SUSHI from the market. You can do this by staking select Uniswap-V2 LP tokens into Sushi staking smart contracts.
Warning: Sushi smart contracts are not audited yet and therefore are high risk. Don’t put in more than you can afford to lose.
You can farm SUSHI via Uniswap-LP tokens of the following DeFi tokens: USDT, USDC, DAI, sUSD, UMA, BAND, LINK, AMPL, COMP, LEND, SNX, YFI. All of these are ETH pairs, e.g. YFI-ETH Uniswap V2 pair. You can go to the sushiswap app to start farming SUSHI.
As you can see above, the APY is quite high – in the 1000%s range. This is not sustainable in the long-term so plan accordingly. Also, for the first 2 weeks, the rewards are 10x so take that into consideration if you want to farm for long or deciding when to start. You also get 2x the rewards on SUSHI-ETH Uniswap V2 LP token to incentivize more liquidity for SUSHI.
How to Buy SUSHI
Instead of farming SUSHI you can buy SUSHI from decentralized exchanges instead.
Currently, the most liquid DeFi exchange in general is Uniswap which trades SUSHI. However, as you can imagine, you can also buy SUSHI from the Sushi exchange. However, you should always check an aggregator like 1inch to make sure you’re not missing a better price. This is especially important if you are going from a non-ETH token like LINK or YFI into SUSHI since Uniswap may not have the best liquidity for all these paths.
Update: Binance has listed SUSHI! You can trade there to save on some of the gas fees from Uniswap (currently around $20 per trade on Uniswap)
Step-1: Go to 1inch and enter the token you want to start with as input and SUSHI as output.
Step-2: Find the exchange path suggested by 1inch. If it is 100% Uniswap, just go to Uniswap instead to trade and save on gas. If it is not 100% Uniswap, then execute the trade directly on 1inch.
Step-3: Connect your Web3 wallet like MetaMask to 1inch and execute the trade. Alternately, just go to Uniswap, connect your MetaMask, and trade there if you are going there directly.
These are early days of Sushiswap but it is a really interesting project and the entire DeFi space will learn a lot from this experiment.