Uniswap and SushiSwap are the two most popular decentralized exchanges. Which of these two DEX offer more to its users?
Uniswap has long been the first option as a decentralized exchange. SushiSwap proved to be his big competition. SushiSwap is a fork of Uniswap, and has additional functionalities that can attract users.
Let’s look at which of these two options offers more to its users.
Introduction
Since the existence of cryptocurrency exchanges, the most commonly used exchanges are centralized exchange. One of the main principles of blockchain technology and cryptocurrencies is decentralization. Since centralized cryptocurrency exchanges do not fit into the principles of blockchain and cryptocurrencies, decentralized exchanges have emerged.
There is a big difference in the operation of decentralized exchanges from those centralized ones. Decentralized exchanges have system of automated market maker (AMM). In this way, the order book is thrown out, and instead of that, the users together create liquidity pools on a selected trading pair; providing “buy“ and “sell“ movement. Some of the most popular decentralized exchanges are Uniswap and SushiSwap.
Uniswap is currently in first place as a Decentralized Finance (DeFi) project in the world, making it the most popular decentralized exchange office on the market. Uniswap was launch in 2018 after receiving $100,000 of funding from the Ethereum Foundation. The native digital asset of the Uniswap platform is Uniswap Token (UNI). You can read more about Uniswap and its functionalities here.
SushiSwap proved to be the biggest competition to Uniswap, created in 2020 as a fork of Uniswap. While it’s hard for anyone to take Uniswap off the throne of ‘best decentralized exchange’, SushiSwap has shown in a short time that it can compete with Uniswap. You can read more about the functionalities of SushiSwap other details here.
Similarities Between Uniswap and SushiSwap
There are many similarities between Uniswap and SushiSwap, given that SushiSwap originated as a fork of Uniswap. What connects them is the Ethereum blockchain. The main functionality of both is swapping between currencies by tapping into liquidity pools filled by other users who are active in the DeFi ecosystem. Both Uniswap and SushiSwap use smart-contracts on the Ethereum blockchain to provide liquidity for swaps. Uniswap token (UNI) and SushiSwap token (SUSHI) are both ERC-20 digital asset built on the Ethereum network.
Differences Between Uniswap and SushiSwap
Uniswap is ranked 10 on Coinmarketcap with a Total Market Capitalization of $14B and a token price of $24.50. SushiSwap is ranked 63 on Coinmarketcap with a Total Market Capitalization of $14B and a token price of $11.30.
Currently, Uniswap has $5.5B locked in liquidity, while SushiSwap has $3.3B. Uniswap offers its users 39000 Token Pairs, while SushiSwap offers its users 1200 Token Pairs.
The most important difference between the two is that SushiSwap has additional functionality. While their fee is the same for the end user (0.3%), the difference is in the schedule of rewards for liquidity providers. While Uniswap liquidity providers have reward of 0.3% of pool fees, SushiSwap liquidity providers have reward of 0.25% of pool fees and 0.05% rewards is for SUSHI token holders. Another big difference is that SushiSwap offers SUSHI yield farming, with rewards going as high as 80% APY at some pools.
The following table shows the basic features and comparison between Uniswap and SushiSwap.
| UNISWAP | SUSHISWAP | |
| Ranking: | 10 | 63 |
| Market capitalization: | $14,000,000,000 | $1,400,000,000 |
| Token price: | $24.50 | $11.30 |
| Number of trading pairs: | 39000 | 1200 |
| Trading fees: | 0.3% | 0.3% |
| Amount going to Liquidity providers: | 0.3% | 0.25% |
| Amount going to Token Holders | – | 0.05% |
| Amount locked in liquidity: | $5.5B | $3.3B |
| Yield farming | NO | YES |
Conclusion
As a final result of the comparison of the two decentralized exchanges, Uniswap and SushiSwap, it can be said that Uniswap is the winner. Primarily because of the main features that decentralized exchanges must have. These are the amount locked in liquidity pools and the number of trading pairs. However, SushiSwap will surely take some Uniswap users. This primarily applies to yield farmers, who see SushiSwap as an opportunity for good APY earnings.
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