SushiSwap and UniSwap are two of the most popular DEXs. In this article, I will compare SushiSwap and UniSwap and take a closer look at their similarities, differences, and overall performance. By the end of this article, you will have a better understanding of which DEX might be the best fit for your trading needs.
This is part 3 of my guide on Uniswap.
This article is part 3 of my deep dive series into Uniswap.
I. What are Uniswap and Sushiswap?
Both Uniswap and Sushiswap are DeFi exchange platforms that provide DeFi swap services. A DeFi swap is a mechanism that enables the exchange of one crypto asset for another without the need for centralized intermediary.
Key features of a typical DeFi swap mechanism are:
- Smart contracts – a contract-based autonomous self-executing algorithm. It does not require the intervention of any counterparty to execute a contract but relies on pre-set algorithmic parameters.
- Automated market maker (AMM) – an order-based autonomous self-executing algorithm. It automatically sets the price of orders and fulfills them based on pre-set parameters. It does not rely on the intermediary to set the swap price.
What they do
In addition to swapping, they also provide ancillary services such as staking, yield farming, and crypto lending, among others.
Their brief profiles
Foundational history:
- Uniswap – launched in November 2018
- Sushiswap – launched in September 2020
Volume base:
- Uniswap – the most dominant DeFi swap platform based on the value of trade
- Sushiswap – one of the leading DeFi swap platforms based on the number of crypto assets.
Capitalization ranking:
- Uniswap – ranked as number 17 in terms of capitalization in the crypto market.
- Sushiswap – ranked number 153 in terms of capitalization in the crypto market.
Note: The capitalization ranking is volatile and subject to change depending on the market performance of each platform.
II. Differences and Similarities between Uniswap and Sushiswap
Both platforms do share certain basic similarities. Yet, they also do have differences that set them apart.
Similarities
- DeFi-based – by their nature, they are decentralized platforms offering financial services in the crypto space.
- Non-custodial – means that they do not take custody of your crypto assets. You only link your crypto wallet, and the assets are swapped directly between crypto wallets through smart contracts. Custodial platforms would require you to relinquish your private keys in order to transact. When you relinquish your private keys, you are, in essence, surrendering the custody of your crypto assets to the platform – a risky undertaking.
- Ethereum-based – both platforms are anchored on the Ethereum network. However, they are also established on a host of other networks including the Polygon network.
- AMM capability – both use Automated Market Markers to manage orders and pricing.
- Same origin – Sushiswap is a fork of Uniswap. Thus, the underlying framework is the same.
- Liquidity Provision: Both platforms allow liquidity provision. This is whereby depositors can earn money for contributing to liquidity pools.
Differences
- Liquidity mining: Sushiswap fully supports liquidity mining through its native coin SUSH. Uniswap started liquidity mining through its native coin UNI but later dropped it, except for initial token distribution.
- Lending: Sushiswap fully supports lending while Uniswap doesn’t.
- Margin trading: Sushiswap fully supports margin trading while Uniswap doesn’t.
- Swap fee: Uniswap has a three-tiered fee structure while Sushiswap has a one-tiered fee structure. Uniswap’s three tiers are 0.05%, 0.3%, and 1%. Sushiswap’s one-tiered fee is 0.3% on all traded pairs. The liquidity providers receive 0.25% of this fee while SUSHI token holders take a share of the remaining.
- Supported crypto assets: Sushiswap has more than 170 supported crypto assets
- Management – Uniswap is managed by a team of developers while Sushiswap is managed by the community.
- NFT trading – Uniswap provides NFT swapping while Sushiswap doesn’t have such a facility
In a nutshell, their similarities are based on both being DeFi platforms and providing swapping services. Their differences mainly stem from the extras that they provide beyond swapping. While Uniswap focuses primarily on swapping, Sushiswap has gone beyond swapping to provide other DeFi services including DeFi loans and DeFi trades. Nonetheless, there is one extra that Uniswap provides that Sushiswap doesn’t – NFT staking/trading.
Apart from these inherent DeFi similarities plus the operational similarities and differences, another way to distinguish between the two swapping platforms is in terms of what their metrics highlight.
III. Comparison of Key Metrics for Uniswap vs Sushiswap
Another important way to compare Uniswap with Sushiswap is to look at the metrics. The metrics can help us understand how each platform’s uniqueness contributes to its performance.
[Note that these metrics are as of a specific date (that is, 18th February 2023). Most of these metrics are highly volatile and thus subject to rapid change within moments.]
1. Number of listed crypto assets
- Uniswap: 1050 crypto assets
- Sushiswap: 400 plus
2. Number of trade pairs
- Uniswap: 1270 pairs
- Sushiswap: 237 pairs
3. Volume of trade
- Uniswap: $913 million (as of 18th Feb 2023)
- Sushiswap: $300 million (as of 18th Feb 2023)
Note: the figures are rounded off.
4. Capitalization
- Uniswap: $5 billion, that is 750,000 tokens @ $6.96 (price as of 18th Feb 2023)
- Sushiswap: $300 million, that is 222,257,372 @ $1.43 (price as of 18th Feb 2023)
5. The volume of native tokens
In Circulation:
- Uniswap (UNI): 750,000,000
- Sushiswap (SUSH): 222,257,372
Note: the figures are approximate.
Total final (after complete release):
- Uniswap (UNI): 1000,000,000
- Sushiswap (SUSH): 250,000,000
From these metrics, it is easy to conclude that Uniswap leads Sushiswap in most indicators. Even though Sushiswap was founded two years after Uniswap, the differences in these metrics are not primarily due to the age gap.
It appears that Uniswap has significantly outperformed Sushiswap in its core area – swapping. Sushiswap has tried to compensate for this through other provisions such as yield farming, DeFi loans, and margin trading.
IV. How to use Uniswap vs how to use Sushiswap
Another way to find out the similarities and differences between these two platforms is how one gets to swap tokens on them.
The swapping process on both Uniswap and Sushiswap is strikingly similar. Why? Because Sushiswap is a fork of Uniswap. Both are anchored on the same codebase. The apparent differences are rather aesthetical and semantic. We are going to use Uniswap as a demonstration of the swapping process.
What does the swapping process look like on these platforms? From the user’s endpoint, this process involves the following steps:
1. Access the platform
Access your preferred platform – either Uniswap or Sushiswap. You don’t need to open an account to do the swapping.
2. Connect your wallet
Click on “Connect Wallet” to connect your wallet to the platform. You will need to ensure that the balance on your wallet is sufficient to cover the gas fee for the Ethereum network or any other blockchain network that the platform operates from. Once you click on “Connect Wallet” a list of wallets to select will pop up as shown below. Choose the wallet that you have.
3. Select the tokens that you want to swap
In the first dropdown menu (see the figure in Step 1, above), select the type of token that you want to swap from. By default, this indicates ‘Ethereum’. So, if your tokens are Ethers, no need to change.
In the second dropdown menu (immediately below the first dropdown menu) select the tokens you want to swap to.
4. Enter the value of the tokens that you want to swap
In the space to the left of the dropdown menu (the blank space with a ‘0’ placeholder), enter the value of the tokens that you want to swap. I’ve entered 10 ethers.
In the second dropdown menu (immediately below the first dropdown menu) the equivalent value of tokens to be returned after swapping will automatically reflect. In this case 17,074.62 DAI.
5. Confirm the transaction
Once you are satisfied with the details of the swapping, the next step is to confirm these details so that swapping can take place.
6. Sign-off
Authorize the platform’s request to use the assigned tokens in your wallet for purposes of swapping.
7. Confirm swapping
Click on the swap button to trigger swapping the tokens.
8. Confirm the swap transaction
A pop-up will prompt you to confirm the swap transaction in your wallet. Confirm this transaction so that the changes to your wallet as indicated in the pop-up can take place.
By finishing these 8 steps, the swapping process is complete. The steps are identical on both platforms save for the different aesthetics applied and semantics used.
V. Pros and Cons of Uniswap vs Sushiswap
Each platform has its pros and cons – some of them are common (especially when one platform is a fork of the other) while others are unique to each platform. Let’s focus on those that are comparative.
Uniswap
Pros:
- No KYC requirements.
- Cheaper to trade on the platform compared to Sushiswap
- Plenty of new tokens and coins on offer
Cons:
- No fiat payment gateway
- Only supports currencies that are Ethereum-based
Sushiswap
Pros:
- Interest-income opportunities
- Opportunity for loans
- Free tokens for new account holders
- A limit order mechanism that allows a trader to place various limit orders on different tokens using the same underlying capital. Furthermore, unlike CEX, this limit order does not lock funds.
- More forms of earning opportunities compared to Uniswap
- Does not require one to open an account or sign in to do swapping
- Ability to swap directly from your wallet
Cons:
- It relies on technology built by another platform (Uniswap) thus making it more rigid towards change.
- The percentage of trading fees allocated to liquidity providers is lower (at 0.25%) compared to Uniswap (at 0.3%).
- Complicated reward structure
- Fewer Ethereum-based tokens compared to Uniswap
Both platforms face the problem of high gas fees due to the Ethereum network on which they are anchored. Also, both platforms lack a fiat payment gateway.
Summing up Uniswap vs Sushiswap
Uniswap and Sushiswap are two leading platforms in the DeFi world. While they do have a striking resemblance similar to what a mother and her daughter would – one being a fork of the other – they do have differences. It is in these differences that you find the unique value proposition that each promise to endow to its users. This value proposition is based on the unique services provided. Through this brief review, I hope that you are now informed enough to make a better choice as to which platform to choose based on how it meets your unique requirements.
FAQs about Uniswap vs Sushiswap
Is Uniswap or SushiSwap cheaper?
It depends. Sushiswap charges a flat 0.3% no matter the tokens you trade. On Uniswap there is a tiering structure in place. Stablecoins are the cheapest and traders are charged 0.05%. Common pairs such as ETH/USDT are charged the same rate as Sushiswap at 0.3%. Then pairs with newer tokens are charged a 1% fee. The older version of Uniswap, Uniswap V2 which still perform a lot of trading volume charges a flat 0.3% like Sushiswap does.
Why is Uniswap so popular?
Uniswap is popular due to its decentralized nature, innovative automated market maker model for liquidity provision, user-friendly interface, active community, and continuous innovation. It was one of the first automated market makers and gained a first mover advantage in the industry.
Why do people use SushiSwap?
People have the perception that SushiSwap has lower trading fees compared to Uniswap. This is not always true. Users who hold the dish token also get 0.05 of the fee. So this can further incentivize you to hold dish and trade on Sushi. Another reason for SushiSwap's popularity is its yield farming opportunities. Yield farming allows users to earn additional rewards in the form of SUSHI tokens by providing liquidity to specific token pairs. Furthermore, SUSHI token holders can participate in the governance of the platform and propose and vote on changes to the protocol. Finally, SushiSwap continues to innovate with new features such as a decentralized limit order book, offering traders new trading opportunities and enhancing the platform's functionality. Overall, SushiSwap provides a more cost-effective, innovative, and community-driven alternative to other DEXs.