Covalent Data-Analyzing the Performance of SushiSwap on 5 Chains
An Overview of SushiSwap
SushiSwap is an Ethereum-based Automated Market Maker (AMM) that enables users to automatically create a decentralized exchange for trading crypto coins. There is no centralized control and traders buy and sell cryptos from liquidity pools that are managed by smart contracts. SUSHI is the token of SushiSwap.
Without relying on order books to connect with traders and fix prices, SushiSwap uses smart contracts to achieve trading liquidity between two cryptocurrencies. For this reason, you will find low liquidity tokens here that are hard to find on other platforms. SushiSwap offers more flexibility in choosing coins from various pools and is secure as well.
SushiSwap fees are significantly lower compared to other decentralized exchanges. You only pay 0.3% to join a liquidity pool. The good thing is that the majority of fees is paid back which means users receive an additional passive income. SushiSwap uses community governance wherein users vote on major protocol changes or updates. Support is good as many DeFi platforms are endorsing it.
SushiSwap Performance on 5 Blockchains
Here is a visual representation of SushiSwap performance on 5 blockchains from Covalent.
The above chart depicts the performance of Sushiswap on 5 blockchains namely Polygon, Ethereum, Fantom, BSC and Avalanche over the period 25th Feb 2021 – 7th June 2021.
When you look at total transactions, Polygon accounts for a major share standing at 42.23% that is closely followed by Ethereum with 37.43% and Fantom with 19.24%. When you consider incoming transactions, Polygon again tops the chart recording 46.9% of transactions followed by Ethereum with 31% transactions. However, Ethereum replaces Polygon in outgoing transactions standing at 57.75% wherein Polygon comes down to 27.24%.
The Polygon Factor
Transactions on Ethereum are consistent across the entire 3 month period. However, the introduction of the Polygon chain drastically changed the dynamics. Transactions on Polygon that started as 1 on 26th Feb 2021 reached 21,320 by 6th June 2021. Especially in May and the first week of June, transactions increased rapidly. This is because Polygon is a Layer 2 chain that offers high scalability, high transaction per second and low gas fee. It is now ranked among the 15 top cryptocurrencies in the world and is moving strategically towards the top 3 cryptocurrencies. The coin has recorded 10,000% growth within 1 year. The increasing congestion on Ethereum and the rising demand for scalability for DeFi networks boosted Polygon growth.
Polygon formed collaborations with valuable companies such as Infosys (M-Setu) and Trace Network. However, the biggest collaboration was with Google Cloud’s BigQuery on May 29, 2021. As BigQuery users run queries about blockchain-related data sets, Polygon’s positioning and accessibility are significantly improving. Billionaire investor Mark Cuban’s announcement about investing in Polygon added to its credibility and popularity. With low usage costs, high Transaction Per Second (TPS), high scalability and operational efficiencies, SushiSwap users are benefitted too. So, Sushiswap on Polygon means best of both worlds.
Fantom Chain Complements SushiSwap
Similarly, the addition of the Fantom chain added to the productivity. You can see transactions on the Fantom chain from 26th Feb 2021. The existence of cryptocurrency exchanges on their own chains makes it difficult for exchanging tokens that are running on other chains. However, Fantom has collaborated with RenVM for cross-chain functionality. Now, you can easily exchange tokens that are existing on various blockchains. It means Fantom now supports all popular crypto coins.
SushiSwap is a solid project that made a fair launch by not allocating tokens to venture capitalists. The key strength of SushiSwap is that it offers a 0.05 DEX fee to users, unlike UniSwap that uses tokens for governance. SushiSwap rates high in governance and financial stability and technical audit and performs exceedingly great.
The only concern about SushiSwap is that it is a hard-fork of Uniswap which means you’ll see many more similar projects in the future. As of now, SushiSwap is poised to disrupt the AMM market with its strong surge.