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SushiSwap (SUSHI) is an example of an automated market maker (AMM). An increasingly popular tool among cryptocurrency users, AMMs are decentralized exchanges which use smart contracts to create markets for any given pair of tokens.
SushiSwap launched in September 2020 as a fork of Uniswap, the AMM which has become synonymous with the decentralized finance (DeFi) movement and associated trading boom in DeFi tokens.
SushiSwap aims to diversify the AMM market and also add additional features not previously present on Uniswap, such as increased rewards for network participants via its in-house token, SUSHI.
SushiSwap was founded by the pseudonymous entity known only as Chef Nomi. Little is known about Chef Nomi, or his or her impetus for forking off from Uniswap.
The project has two other pseudonymous co-founders, sushiswap and 0xMaki, also known as just Maki. Between them, they handle SushiSwap’s code, product development and business operations.
More recently, de facto ownership of SushiSwap was passed to Sam Bankman-Fried, CEO of derivatives exchange FTX and quantitative trading startup Alameda Research.
Bankman-Fried is a well-known participant and cryptocurrency market commentator, regularly appearing in media interviews.
SushiSwap primarily exists as an AMM, through which automated trading liquidity is set up between any two cryptocurrency assets.
Its main audience is DeFi traders and associated entities looking to capitalize on the boom in project tokens and create liquidity.
AMMs do away with order books entirely while avoiding problems such as liquidity issues, which hamper traditional decentralized exchanges.
SushiSwap aims to improve on the offerings of its parent, Uniswap, by increasing the impact users can have on its operations and future.
The platform takes a 0.3% cut from transactions occurring in its liquidity pools, while its SUSHI token is used to reward users portions of those fees. SUSHI also entitles users to governance rights.
SushiSwap’s in-house token SUSHI is created at a rate of 100 tokens per block. The first 100,000 blocks had a block reward of 1,000 SUSHI.
The supply of SUSHI will depend on the block rate. At approximately 6,500 per day, and therefore 650,000 newly-minted tokens per day, there will be roughly 326 million tokens in circulation by September 2021, a year after SushiSwap first launched.
SUSHI had no premine, and began to be minted at Ethereum block number 10,750,000, beginning with a supply of zero tokens.
SushiSwap attempts to mitigate the traditional risks of depositing funds in smart contracts by upping the governance powers of its users.
The anonymity of its developers poses questions beyond a technical standpoint. In September 2020, for example, Chef Nomi was involved in a spat with users after withdrawing 38,000 in Ethereum (ETH) from SushiSwap. The funds were subsequently returned, with Chef Nomi publicly apologizing for doing so and calling the move a mistake.