How to use SushiSwap v1. Step-by-step guide by QDAO DeFi

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September 25, 2020

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Add: Veronica Zubrii

SushiSwap is the fork of UniSwap and has its own SUSHI token, providing a portion of the fees to the holders.

Currently, the token is being distributed through liquidity mining to those who provide liquidity to Uniswap pools. How can you provide liquidity for SushiSwap and get extra income?

Let’s find out. 

Here’s a step-by-step SushiSwap tutorial from the QDAO DeFi team. 

Binance started trading SushiSwap at the beginning of September and immediately got a lot of users’ attention, thanks to its key differences.

First of all, the SUSHI token has 2 functions:

  • designating governance rights to holders
  • paying a portion of the fees to the protocol

Why did it draw so much attention? It’s because tokens distributed through liquidity incentives guarantee governance rights to holders. 

You can use these rights to submit a SushiSwap Improvement Proposal and vote on it with your tokens.

Proposals

Distribution of SUSHI rewards

As of September 1st 2020, SushiSwap has encouraged more than $1 billion in Total Value Locked.

An increased SUSHI reward helped to poach investors and grow liquidity in the short term.

Aside from farming, SushiSwap offers great staking, distributing 0.05%  from each commission made. 

These two conditions ensured the success of the project right at the launching phase.

So how are SUSHI rewards distributed?

Just like the COMP and many others, SUSHI is distributed through liquidity mining. As yield farming is creeping across the crypto planet, this trend is getting more and more popular. 

If you provide liquidity to some Uniswap pools, you can definitely count on some tasty SUSHI being prepared for you.

Here’s the list of Uniswap pools you can provide liquidity for:

  • COMP-ETH
  • USDC-ETH
  • sUSD-ETH
  • LEND-ETH
  • SNX-ETH
  • UMA-ETH
  • LINK-ETH
  • BAND-ETH
  • DAI-ETH
  • SUSHI-ETH
  • USDT-ETH
  • YFI-ETH

The latter pool (YFI-ETH) even pays double rewards to stimulate the provision of liquidity. Moreover, the community recently voted for the addition of more pools to be distributed. This is voting power at its best.

However, the bonuses are being reduced after 100,000 blocks. All the tokens in the staking contract will be transferred strictly to SushiSwap contracts.

Here’s the scheme:

Uniswap LP tokens on SushiSwap ➡ Uniswap tokens represented by tokens from SushiSwap ➡ new liquidity pools on SushiSwap. That’s how the SushiSwap exchange is going to be launched.

How to provide liquidity for SushiSwap

If you want to stake Uniswap tokens in return for SUSHI, you’ll need to perform some simple tasks. 

First, go straight to Uniswap, choose the “Pool” option and click on the “Add liquidity” button.

First, go straight to Uniswap, choose the “Pool” option and click on the “Add liquidity” button.

ETH is usually chosen by default. If not, select it in the opening window. Below, click on “Select a token” and choose UMA.

Click on “Select a token” and choose UMA.

Now select the amount of ETH and UMA you are going to add to the liquidity pool.

Select the amount of ETH and UMA you are going to add to the liquidity pool.

Last step: add liquidity to the pool. There you go! Now you have ETH-UMA UNI-V2 LP tokens.

Now get some SUSHI

Let’s visit the official SushiSwap site.

First thing’s first. You need to have some coins in your wallet. So click on the “Unlock wallet” button at the upper right corner of the initial page.

Click on the “Unlock wallet” button at the upper right corner of the initial page.

Now it’s time to connect one of your wallets. SushiSwap offers two options:

  • Metamask
  • WalletConnect
Connect one of your wallets

The interface will connect you to Ethereum and the Decentralized Web. Now that you’re logged in, you can bring up the menu. Click on the “See the Menu” button.

Click on the “See the Menu” button.

Here you can see a whole bunch of tokens ready to be chosen. 

Here you can see a whole bunch of tokens ready to be chosen.

Let’s set our sight on the “Tether Turtle”. Remember that by selecting the “Approve” button, you allow SushiSwap to take UMA-ETH UNI-V2 LP on our behalf.

Let’s set our sight on the “Tether Turtle”

Now you are able to select the amount you want to stake.

That’s it! At this point you are free to choose from a lot of options:

  • harvest your SUSHI
  • take your tokens back to Uniswap
  • get back your ETH and UMA

…and many more.

It is highly important that you not deposit more than you can lose. SushiSwap is a cool yet unaudited project. This carries the risk of mistakes being made while depositing funds into a smart contract. 

Moreover, it can take quite a time to farm small deposits, due to the extremely high gas. 

However, there are no projects with an undoubtable advantage where DeFi projects are concerned. It’s all about risk and reward exactly as they are. 

In a word

SushiSwap is one of the most successful Uniswap forks. They are very much alike. However, SushiSwap has a key difference in that it allows for community governance.

That’s why it is so attractive to many DeFi adepts. 

Will this project vanish after all the possible profit is received? Or will it get a whole lot of liquidity from Uniswap? Time will tell. The initial distribution period is always a good litmus test for any platform. 

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