What Is Sushi?

Sushi (SUSHI) is an Ethereum cryptocurrency token tied to the SushiSwap exchange, which is a decentralized exchange. Sushi owners can participate in community governance and stake their tokens to earn some of SushiSwap’s transaction fees, also known as gas. Versions of the token can also be found on the Solana, Avalanche, Binance Smart Chain, Polygon, Terro, Celo, Harmony, Fantom, and xDai networks.

Sushi is a well-supported token that works across multiple blockchain networks. It’s used as the primary currency of the SushiSwap decentralized exchange (DEX), a peer-to-peer exchange in which transactions occur directly between crypto traders.

At the time of this writing, SushiSwap is the 142nd-largest cryptocurrency by market capitalization, according to the aggregator of cryptocurrency market data CoinMarketCap. Of the maximum 250 million token supply, 242 million have been created. Like other cryptocurrencies, it has seen a wild fluctuation in prices, with a peak of more than $20 per coin and recent values dropping to under $2 each.

SushiSwap is a decentralized exchange (DEX) in which users can exchange between different virtual currencies using a connected cryptocurrency wallet, such as MetaMask. The exchange allows swapping between 11,700 currency pairs.

To facilitate trade, Sushi users worldwide deposit currency with the exchange, known as staking. At the time of writing, the total value locked (TVL) in the exchange is $2.28 billion. TVL is the sum of all assets deposited in decentralized finance (DeFi) protocols.

Staking occurs when an investor wants to swap assets, and the sale uses the pool of staked assets to facilitate the trade, thereby generating a fee. A portion of the fee goes to the depositors, offering an incentive to keep funds on the exchange.

SushiSwap works differently from centralized exchanges like Coinbase and Gemini, where trades are made between users. These centralized exchanges are the custodian of customer deposits, which are much like an online stock brokerage. Employing a DEX-like SushiSwap, users are responsible for their individual cryptocurrency wallets. The exchange is not a custodian of deposited funds; it merely acts as a facilitator.

SushiSwap is a copy of Uniswap, the top decentralized exchange that operates on the Ethereum blockchain. Both exchanges are similar in terms of their basic functionality.

In late 2021, Sushi tokens fell on news that developers were leaving the project, but that turned around in December 2021 when developer Daniele Sestagalli proposed that Avalanche take over the network. Sushi rose 10% with that development. In a lengthy post on the Sushi forums, Sestagalli explained a path forward to evolve SushiSwap’s governance structure and expand integrations, among other details.

If there’s consolidation in the decentralized exchange industry, SushiSwap could be gobbled up by a larger project or pushed even further down the rankings as more successful projects emerge.

However, if the SushiSwap community can maintain its goals of acting as an expanding exchange, whereby users can easily swap between nearly any cryptocurrency at a low, competitive cost, SushiSwap could grow.

Ultimately, it is up to SushiSwap leaders, community members, and cryptocurrency market forces to decide the future of Sushi. Whether that’s going “to the moon,” as cryptocurrency fans like to say, or heading down in the dumps, is something only time will reveal.

What Is Sushi?
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