What Is SushiSwap?
Also known as: Sushi, SUSHI, Sushi Swap
In short
SushiSwap is a decentralized exchange that emerged in 2020 as a fork of Uniswap's open-source code, works on the automated market maker (AMM) model and serves many blockchains; its governance token is SUSHI.
SushiSwap was launched in August 2020 by a pseudonymous developer and went down in DeFi history with a 'vampire attack'. The project incentivized Uniswap's liquidity providers with SUSHI rewards in return for staking their LP tokens on SushiSwap; it then migrated this liquidity en masse to its own pools. The fact that Uniswap did not have its own token at the time made this incentive model attractive; Uniswap soon distributed its governance token, UNI.
The platform stood out with an economic model aimed at sharing part of the trading fees with users who stake SUSHI. Over time, it spread to many EVM-compatible networks and Layer 2s beyond Ethereum and developed products such as token swaps, liquidity provision and swaps between different networks.
SushiSwap's early period was marked by controversies such as its anonymous founder selling tokens in the developer fund and later returning them; this incident became one of the frequently cited examples of the risk of trusting anonymous teams. Those who use the platform face risks such as impermanent loss, smart contract risk and liquidity shifting to other platforms when token incentives decrease, as with other AMMs.
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