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What is Sushi?

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May 12, 2022

9 min read



SUSHI is the ERC-20 token that runs the Sushi decentralized exchange (DEX) as well as its many other financial products which provide Sushi users many options for earning such as providing liquidity, lending, yield farming and deposits. Despite Sushi’s somewhat controversial beginnings, the platform has completely revamped its reputation and is now one of the favorites among decentralized finance (DeFi) platforms.

What is Sushi (SUSHI)?

If you’re new to crypto, bear in mind that food-themed tokens are not at all unusual. If it’s not sushi, then there’s cake, burger, or even kimchi. The cryptocurrencies don’t really have anything to do with their namesake food items, but it does show how the crypto community sure has a lot of fun (or hungry) people in it.

And they have good reason to. Sushi for example (formerly SushiSwap) is one of the most popular DEXs for trading tokens—often those that are hard to find—making it extremely popular for gamers or crypto enthusiasts looking to invest in the next big up-and-coming coin not listed anywhere else yet. Users can also use the platform to provide liquidity, and earn a portion from the trading fees that the platform charges. 

But Sushi is more than just a DEX. Included in its revolving belt are other intriguing platefuls such as Kashi, a decentralized lending market and margin trading platform, or yield instruments like Onsen or the BentoBox. Such a wide range of staking and yield opportunities offer more than the usual fare for Filipinos, whom we can say are often quite the adventurous type, not just when it comes to cuisine.

What is SUSHI used for?

SUSHI is the token that powers the Sushi platform. It is an ERC-20 token, which makes it native to the Ethereum network. SUSHI was developed for the following uses:

  • SUSHI is given out as rewards for staking within the Sushi platform. There are many ways to earn yields on SUSHI such as stacking leverages between different products. 
  • SUSHI is used for community governance and holding it allows users to vote on network decisions such as the rates for fees or future updates. 

How does Sushi work?

In the Sushi decentralized exchange, users can provide liquidity for any pair of tokens to earn network rewards. 

DEXs are meant to bring together different markets to provide liquidity and more trading options that are often not available on centralized exchanges (CEX). If you’re looking for newly-launched ERC-20 tokens fresh from ICOs or IDOs or are looking to take a risk on some obscure but promising investment, Sushi is often the place to go. And being decentralized, the whole platform is community-driven and relies only on smart contracts to execute every transaction, otherwise known as an automated market maker (AMM).  

In fact, there is no order book on Sushi. You don’t even have to set up an account. User interface is so simple that there are more buttons in an elevator than on the Sushi app. The only thing you need to do is to connect your wallet and pick a token to swap with for your own tokens.  

This doesn’t mean that a DEX offers less security than a CEX. Sushi is a non-custodial platform, which means that your tokens never leave your wallet. Unlike keeping your crypto in a CEX where they’ll be holding your private keys for you (and therefore holding your crypto) Sushi executes transactions directly, peer-to-peer. 

The trading options are only limited by the liquidity available in the pool. Unlike in a CEX where trading pairs are fixed, in Sushi, there is a market for any pair of tokens as long as there is someone willing to provide the liquidity. You can even set up your own pair that you wish to provide liquidity for. 

To provide liquidity, a user just picks two tokens. One of them would be the base token (usually a new coin which others are looking for on the exchange) paired with an equal value of Ethereum or a stablecoin like Tether. 

In return, the user gets Sushi Liquidity Provider Tokens or SLP (not to be confused with Axie Infinity’s Smooth Love Potion). Sushi SLP Tokens represent one’s share in the liquidity pools. After that, everytime other users swap between the pair you’re providing liquidity for, you get a percentage of the transaction fees collected, proportional to the amount of your share. Currently, every trade on the platform is charged 0.3% of the amount traded

Supplying liquidity is a good way to constantly earn yield instead of having tokens just sitting idly in a wallet. But if you’re the daring type, there are other things you can do on Sushi to spice things up a bit more. 

Yield farming on Sushi

In the simplest sense, yield farming in cryptocurrency is positioning your tokens in the best possible way so that they generate maximum profits. It’s compared to farming since it's somehow similar to having to choose the right “crops” and planting them at the right places where they’ll grow for a nice harvest. 

In the DeFi space, there’s a lot of argument for Sushi as one of the most fertile places for yield farming. This is because every type of Sushi coin earned on the platform can in turn be staked to earn other coins, which in turn can be staked again to earn others more. It’s like being able to plant seeds off another plant which you just planted—and keeping the cycle running over and over again. 

For example, after supplying liquidity, users get their Sushi SLP tokens. If they choose, they can head off to the Sushi Farm, where staking SLP will then earn them SUSHI.

But it doesn’t have to stop there, SUSHI can then be staked at the SushiBar to earn xSUSHI—holding which drives up the percentage that one receives from the fees collected from the pool. 

Another example is using Kashi, which is Sushi’s decentralized lending platform. Kashi gives out KMP tokens in exchange for putting out tokens for lending. After that, KMP can be staked as well to earn SUSHI, which can be staked again to earn more—you guessed it—xSUSHI!

And there are plenty of other ways to stack profits. The Onsen program is a special reward scheme for new tokens which also yields SUSHI. The BentoBox meanwhile is like a deposit vault, where you can lock up tokens to earn more passive income without incurring losses. 

Sushi trivia and recent happenings

When it comes to token lore, Sushi is one of the few coins out there whose origin story ranks alongside those of Bitcoin or Dogecoin for its twists and turns.

Called SushiSwap in 2020, the DEX was launched, anonymously, by two people simply known by their pseudonyms “Chef Nomi” and “OxMaki”. To this day, their real identities are still up for debate. Though this might seem unconventional, in the decentralized world it’s not unheard of. After all, even the identity of Bitcoin’s founder, Satoshi Nakamoto, remains the largest mystery in the crypto space. 

SushiSwap’s code was also simply copied and modified from Uniswap’s. Though this too might raise some eyebrows, some maintain that this is not exactly plagiarism since the code was made open-source from the beginning. Because of the modifications, this is what is termed technically as a “fork”. Specifically, the changes made from Uniswap were to make the platform more community-governed, allowing users to have a more active role in determining the direction for the DEX. 

SushiSwap also allowed Uniswap users to stake Uniswap tokens (UNI) on Sushi and earn higher rewards. As such, SushiSwap was able to siphon off a large chunk of Uniswap users to secure its own liquidity pool. 

To top off the list, Chef Nomi also made off with about $13 million worth of ETH in a massive sell-off. He later returned the funds with an apology and transferred ownership of the SushiSwap contract to Sam Bankman-Fried, who is also the founder and CEO of FTX Crypto Derivatives Exchange.

Since then, SushiSwap underwent a soft rebrand as Sushi, having grown into more than just being a DEX. Aside from the massive yield farming options, it is also possible now to launch projects on Sushi itself with the use of the Miso smart contracts. 

Cross-chain compatibility is also available now with support for the BNB Chain (formerly Binance Smart Chain or BSC) and Polygon (MATIC), further fueling user adoption across multiple networks.


SUSHI has a maximum supply of 250 million tokens of which 127 million are already in circulation. The relatively small supply would mean that prices are likely to go higher as soon as the supply has been diluted. New SUSHI is minted at a rate of 100 new tokens per block, though with its active community governance, changes to the supply is always a possibility with enough votes. 


Though it might sound unusual to most people, SUSHI does seem like a perfect name to describe a token that’s equal parts refinement and novelty. Zen-like in appeal, but at the same time incredibly exciting and exotic in flavor. 

And true to the experimental spirit of fine cuisine, Sushi seems bent on constantly finding new flavors for the DeFi palette. In the space of only two years Sushi has already pushed the idea of what a DEX could offer and how many layers of goodness you could fit into yield farming. 

SUSHI is already a lot of things at the moment that may be hard to define, but it's definitely not mundane, not boring, and not your typical everyday fare. 

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DISCLAIMER: The statements in this article do not constitute financial advice. PDAX does not guarantee the technical and financial integrity of the digital asset and its ecosystem. Any and all trading involving the digital asset is subject solely to the user’s risk and discretion and must be done after adequate and in-depth research and analysis.

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