UniSwap and SushiSwap are two decentralized exchanges that function on the Ethereum blockchain and are in direct rivalry with one another. They both have their own perks. However, there are some specific aspects that set UniSwap and SushiSwap apart. Let’s explore some of them in the details below.
What is UniSwap?
UniSwap is a decentralized exchange allowing users to deposit money in the liquidity pools. The pools represent token pairs of two ETH-based coins. Users swap their coins to provide liquidity. The liquidity provider earns a fee for the swap.
UniSwap is a good investment with the success of Ethereum 2.0 and the Defi sector. It is a safe and fast-growing decentralized exchange (DEX). The value of UniSwap is also on the rise. At the time of this writing, the price of UNI is $23.29
What is SushiSwap?
SushiSwap was initially a copy of UniSwap. There were a few minor changes in the interface. It was released back in August 2020. Many users transferred to SushiSwap for gaining the benefits provided by the new decentralized exchange.
SushiSwap is a good investment if you know how to manage risks. Its yield farming feature can help you earn through staking. The price of the SUSHI token is $10.77.
Now that we know the basis of UniSwap and SuhiSwap let’s look at how one is different from the other in terms of features.
1. Swapping Fee:
The first difference between both decentralized exchanges is on the basis of charges for swapping.
UniSwap exchange has three distinct fee plans: 0.05%, 0.3%, and 1% depending on the risk taken by Liquidity providers. There is an equitable cost distribution among all the liquidity providers. Moreover, the whole fee goes to the LPs upon swapping. UniSwap does not have any cuts.
The price tier charged by liquidity providers reflects the amount of risk that they are prepared to assume. There is a certain level of liquidity attached to pools.
SushiSwap provides a 0.3% fee for all trading pairs. 0.25% of it goes to liquidity providers and the remaining 0.05% goes to SushiSwap token holders. The fee is fixed regardless of the number of transactions that take place in each of those pairings within a given time.
2. Liquidity Mining:
Liquidity Mining practices also differ greatly between UniSwap and SushiSwap.
When UniSwap first launched as a cryptocurrency exchange, it offered UNI tokens to liquidity providers in exchange for their involvement in the liquidity mining process. However, the business has since stopped this practice. Nonetheless, UNI tokens have been in existence since the beginning of time.
Now the crypto enthusiasts have the opportunity to earn more UNI tokens by simply participating in the UniSwap rewards program, which is totally free to take part in. An announcement by Hayden Adams, the firm’s creator, suggested that “liquidity mining” will commence soon, but the company has not specified a specific time frame for when it would begin.
SushiSwap’s liquidity mining business is still operating at full capacity. They are placing their tokens in the hands of the network. The liquidity providers can stake these tokens. As a result, they are able to earn Sushiswap Governance tokens on a continual basis.
3. Concentrated liquidity:
Concentrated liquidity is an innovative program first introduced by the UniSwap exchange.
UniSwap was the first to implement concentrated liquidity. It enables liquidity providers to combine their tokens within certain price ranges to maximize their earnings. It was a revolutionary piece of technological innovation.
This leads to the expansion of liquidity providers’ capacity to offer liquidity within a certain price range, culminating in the creation of unique pricing curves. Investors may be able to execute bigger swaps because of the greater liquidity in the anticipated price range of a specific trading pair.
Sushiswap does not presently provide this service. Moreover, the platform does not intend to include concentrated liquidity in the future.
4. Lending and Margin Trading:
Lending and margin trading also puts UniSwap and SushiSwap apart.
UniSwap has included DEX-specific characteristics into its fundamental functioning. It concentrates on its primary function as a DEX. Therefore, it is able to perform its functions more efficiently.
SushiSwap is expanding its operations outside the boundaries of DeFi. BentoBox feature facilitates decentralized applications (DApps). Kashi is a Dapp on BentoBox providing lending and margin trading feature. It is available in both English and Spanish. When a user puts its tokens in the BentoBox platform it hols it whereas Kashi lends, borrows, and trades the asset.
5. Reward System for Newer Tokens:
Reward systems are different for UniSwap and SushiSwap.
There are no additional advantages for users of the Uniswap platform despite the launching of new currencies on it.
SushiSwap has introduced a program known as the “Onsen Program,”. It is a way of giving liquidity to freshly launched currencies that have been launched on other exchanges in the past. Onsen, the platform’s incentive system, gives additional SUHI rewards to the newer and smaller projects. Thus it promotes the growth of younger and smaller projects. There are other programs such as the Bitcoin Cash scheme, staking tokens, etc. These encourage people to engage with new cryptocurrencies.
UniSwap and SushiSwap have grown massively over the years. Right now, these two are the top decentralized exchanges on the Defi stage. PancakeSwap, BNB based decentralized exchange, is also coming in competition with these two.
The value locked in Defi is surging with time. Investing in either of the decentralized exchange seems like a smart move. Nonetheless, the decision lies with you. Both UniSwap and SushiSwap are good investments. However, choose on the basis of what you want to gain.