SushiSwap: What Is It and How to Buy

The SushiSwap (SUSHI) token price has been decimated since its near $23 heights reached in 2021. It now sits at about $1.30 with a market capitalization of just under $170 million. But is it poised for a rebound?

Here’s a breakdown of how the SushiSwap platform works and the value derived from holding SUSHI tokens.

See: Looking To Diversify In A Bear Market? Consider These 6 Alternative Investments

What Is SushiSwap?

SushiSwap is a decentralized finance platform on the Ethereum blockchain. It acts as an automated market maker, which means it routinely creates markets for trading currency pairs whether there previously was one or not. 

Currently, there are about 16,000 trading pairs. Users can set limit orders which allows them to buy or sell crypto assets at a predetermined price in addition to market orders when using the SushiSwap platform.

SushiSwap’s Origin Story

SushiSwap resulted from a fork in the UniSwap protocol in August 2020. A fork occurs when the community has conflicting views on the governance structure of a protocol. 

SushiSwap was created to incentivize liquidity providers through rewards, which previously had not been implemented on UniSwap. It uses the same code as UniSwap but offers a separate set of rules. After a difficult period where liquidity was extracted from the fork, the migration was championed by Sam Bankman-Fried of FTX.

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What Is SushiSwap Used For?

In addition to trading and swapping assets, SushiSwap lets users engage in:

  • Yield generation — also known as yield farming — through BentoBox
  • Lending and borrowing through Kashi
  • Liquidity Pools

How Does BentoBox on SushiSwap Work?

BentoBox — also known as Bento — is a vault for storing crypto assets where users can earn a return. Typically, crypto assets are lent to others through decentralized finance protocols such as Compound, which engages in short-term loans. Yield farming can earn users more value received in tokens. However, the underlying price can still go down while waiting for returns.

How Does Kashi on SushiSwap Work?

Lending and borrowing are done through Kashi, a feature built on top of Bento. Purchasers can provide collateral through any token, stablecoin or synthetic asset. If there isn’t a market for a trading pair, Kashi will make it. This is what differentiates it from other crypto lending markets.

How Do Liquidity Pools Work on SushiSwap?

Liquidity pools let anyone using the platform pool their tokens together to facilitate SushiSwap’s functions. A 0.30% fee is extracted from each trade, 0.05% of which is distributed to liquidity providers. The remaining 0.25% is added to the liquidity pool.

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What Is SUSHI Crypto?

SUSHI is the governance token of SushiSwap. Holders of SUSHI that use their tokens to provide liquidity or staking can vote on significant changes and the direction of SushiSwap’s platform. 

Each vote is referred to as a SUSHIPOWAH. Every SUSHI token added to the SUSHI-ETH liquidity pool is worth two SUSHIPOWAH. Each xSUSHI token held for SUSHI staking is worth one SUSHIPOWAH.

How Does Staking Work on SushiSwap?

Investors can stake SUSHI tokens at the SushiBar. In exchange for crypto staking to secure the network, users will receive xSUSHI tokens. These tokens take a cut of transaction fees that increase their value over time. xSUSHI will always be worth slightly more than SUSHI because of this.

How Do You Stake SUSHI?

To stake, users will need to deposit SUSHI in their wallets. Then there are a few simple steps to follow.

Staking SUSHI

  • Visit sushi.com and select “Enter app.”
  • Connect a crypto wallet — Ethereum is needed to pay gas fees.
  • Select “Explore” and click on “SushiBar.”
  • Confirm the number of tokens to be staked.
  • Approve from the connected wallet.

SushiSwap Price Predictions: How Much Will Sushi Be Worth?

Price estimates for SUSHI vary dramatically. Here are the crypto price predictions for SUSHI in the next three years from two crypto firms, Telegaon and CoinCodex.

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Telegoan has taken an extremely bullish stance, which hasn’t fared too well in 2022. It comments on the value of SUSHI’s revenue-sharing model to support its growth. It believes SUSHI can reach an average price of $84.87 per token within the next five years.

Price Prediction Year Telegaon Price Estimate
2023 $19.80
2024 $28.21
2025 $48.20

CoinCodex is more cautious but remains bullish on SUSHI’s long-term price. Its short-term price prediction indicates a downside for SUSHI as sentiment has reached extreme fear now. Its analysis is based on 26 technical indicators, of which 20 are currently bearish.

Price Prediction Year CoinCodex Price Estimate
2023 $1.88 to $3.27
2024 $2.42 to $7.26
2025 $3.09 to $16.10

Is SushiSwap a Good Investment?

Does the SUSHI coin have a future? According to the price predictions above, a rebound could be around the corner. However, an important point to note is that the total value locked on the SushiSwap platform has continuously plunged downward for almost a year. 

SushiSwap previously had more than $5 billion worth of funds deposited into its protocol. That figure has now dropped to below $400 million, suggesting the value of its network and users’ interest has dropped considerably.

Where Can I Buy SUSHI Crypto?

Investors can buy SUSHI from several top cryptocurrency exchanges, including Binance, Coinbase and FTX. It can also be acquired by connecting a valid crypto wallet to SushiSwap. 

Final Take

The platform SushiSwap provides an entry point for the average crypto user to enter DeFi. But, whether it will always be viewed as a valuable DeFi network is yet to be seen. Amid a crypto bear market, the SUSHI token as an investment remains highly speculative. There are alternatives available competing with SushiSwap performing similar functions, so investors should approach cautiously.

Information is accurate as of Oct. 6, 2022, and is subject to change.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.

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About the Author

David is a qualified financial advisor in the Republic of Ireland. He has a bachelor's degree in business and entrepreneurship, as well as over five years of investing experience.
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