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SushiSwap is a decentralized exchange platform where users can buy, sell, and trade crypto assets.
What is SushiSwap? (SUSHI)

Built on Ethereum, SushiSwap uses the modern automated market maker (AMM) model, first pioneered by the Uniswap decentralized exchange (DEX). An AMM allows users to swap their tokens using collections of digital assets called liquidity pools, which aim to create an efficient trading mechanism that builds in economic incentives to those users providing the liquidity.

SushiSwap, also known as Sushi, used to offer other DeFi solutions including a broader AMM framework (Trident), a decentralized lending and borrowing protocol (Kashi), and more. However, it later contracted these efforts to focus on developing, maintaining, and optimizing its DEX.

Sushi is governed by the Sushi decentralized autonomous organization (DAO). Holders of the SUSHI governance token can vote on proposals to make changes to the platform, and these changes are ultimately carried out by the core team of developers. SUSHI can be bought on the market or “farmed” by users who earn rewards by being active (i.e., providing liquidity) on the platform.

How was SushiSwap developed?

SushiSwap was launched in August 2020 by a pseudonymous creator named Chef Nomi, who forked (or copied) the Uniswap protocol’s software and modified it to fit his vision. Uniswap’s open-source code has been used multiple times to create new DEX protocols on Ethereum (and other blockchains compatible with the Ethereum Virtual Machine).

SushiSwap attracted new users in its early days through token rewards. Sushi promised liquidity providers (LPs) rewards in the form of a new token—SUSHI—which drew users who wanted to gain access to a new asset and amplify their DeFi gains. At the time, Uniswap had not released its own UNI token, and SushiSwap wanted to attract LPs to its protocol.

For a brief period after the launch of SUSHI rewards, Sushiswap’s total volume of assets locked (TVL) on its platform surpassed that of Uniswap. However, Uniswap announced its release and airdrop of UNI soon after Sushi’s initial efforts, taking back many of the yield farmers and crypto traders who fled to Sushi.

Further, in September 2020 founder Chef Nomi cashed out between $12-14 million in SUSHI, prompting community concerns that SushiSwap was a scam. Nomi eventually returned the funds to the treasury and handed over control of the platform to FTX’s Sam Bankman-Fried. In 2022, Jared Grey—previously CEO of DeFi project EONS (formerly ALQO) and the global exchange Bitfineon—was announced as Sushi’s “Head Chef.”

Despite its bumpy start, Sushi has grown and developed significantly in the ensuing years. In May 2021 alone it saw nearly $30 billion in crypto trading by volume. In November 2021, TVL on the platform topped $8 billion. It also added support for multiple chains and layer 2 solutions such as Avalanche, Arbitrum, Celo, Polygon, Fantom, and Optimism.

How does SushiSwap work?

SushiSwap’s AMM is a system of smart contracts that supports swapping of digital assets using liquidity pools. Unlike traditional markets (like the stock market) that rely on order books which allow buy and sell orders to be set at certain prices, AMMs operate by the creation of “pools” of assets provided by liquidity providers.

For example, to provide liquidity in the ETH/DAI liquidity pool, LPs must lock equivalent values of both ETH and DAI into the pool (that is, $1 value of ETH for every $1 value of DAI). In return, they receive a token, called LP tokens, which denote their stake in the pool and allow them to collect trading fees. Traders conduct trades by depositing ETH into the pool in exchange for DAI, or vice versa. The values of the pools are kept constant by a mathematical formula called the constant product formula, and arbitrageurs help rebalance the liquidity pool so that it will always have the same amount of each token.

LPs earn rewards based on the fees generated by swaps. In addition to these fees, LPs can take advantage of supplemental rewards that are specific to each pool. They may also “farm” for rewards by depositing their LP tokens (also called staking) into a yield farm.


In 2022, SushiSwap introduced cross-chain swaps, powered by the Stargate protocol. This allows users to swap assets from one chain (or layer 2 solution) to another.

Previously, SushiSwap operated as most other DEXes do: allowing for trades of assets within chains like Ethereum, Arbitrum, Fantom, Avalanche, or Polygon. However, its cross-chain DEX, SushiXSwap, serves as a bridge between chains—by pushing assets from one chain to another—with the added asset-swapping features of a DEX.


Furo is a platform for streaming payments and controlling token vesting.

This service is designed to let DAOs reward contributors in a regular, automated fashion with token payments over time. Compared to a more manual process, Furo theoretically offers more efficiency, predictability, and decentralization.

Furo also helps to automatically control token vesting, which is the unlocking process for funds that have been provided to project contributors but may not be sold for a pre-determined amount of time. It operates by tokenizing each member’s position as a non-fungible token (NFT).

How is the SUSHI token used?

SUSHI was originally an Ethereum-based token based on the ERC-20 token standard. It is used in the governance of the Sushi ecosystem, and it is additionally provided as incentives/rewards to liquidity providers on the SushiSwap DEX. SUSHI can also be staked on the platform to receive xSUSHI in return, and this entitles holders to receive a small portion of trading fees, even if they are not providing liquidity.

In December 2022, Sushi Head Chef Jared Grey proposed a redesign of SUSHI’s tokenomics, including adding features such as time locks on xSUSHI staking, perpetual token emissions (i.e. new token creation) of 1.5-3%, and burning of variable percentages of swapping fees.

Token distribution

There is a maximum supply of 250 million SUSHI tokens, which began being released to the market in 2020 and was set to fully be released—in a graduated fashion—by November 2023. Ten percent of SUSHI tokens that are generated each block are deposited into a fund to support development of Sushi.

SushiSwap essentials

  • SushiSwap is a decentralized exchange (DEX) based on Uniswap’s original automated market maker (AMM).
  • Over the years, SushiSwap has expanded to support swapping of digital assets on multiple blockchains and layer 2 solutions, and it has also enabled cross-chain swaps.
  • The SUSHI token is used for governance of the protocol and provides a way to incentive and reward users of the platform.

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