UniSwap vs SushiSwap: Which Is More Safe?
Dec 19, 22 | Bakhtain Afzal
The introduction of cryptocurrencies was decades back, and so far, most of us are either only aware of it, or we already have cryptocurrencies. And, for crypto transactions or crypto trading, you need cryptocurrency exchanges. Although numerous questions pop up, most of which are our security concerns for these crypto exchanges. Meanwhile, finding the best crypto exchanges leads us to compare the best ones first, for example, UniSwap vs SushiSwap. Both of which are known as the top decentralized Crypto exchanges.
Speaking of DEX, the conventional design of crypto exchanges was centralized. But, considering what cryptocurrencies stand for and their basic principles, decentralized exchanges were introduced—for example, SushiSwap staking and UniSwap staking.
In addition, decentralized and centralized exchanges significantly stand different from each other. DEXs have a different design, such as the AMM system (Automated Mrket Makers). Even though decentralized exchanges brought a concept of a secure and foolproof digital finance system, what crypto already stands for, there are still numerous debates within that as well, including, UniSwap vs SushiSwap and which is better?
To help you form an analysis on UniSwap vs SushiSwap, keep reading our article, and learn which option offers better safety for its users.
What Is UniSwap?
UniSwap is a decentralized exchange, i.e., it isn’t operated by a single entity. UniSwap mainly gets its popularity from its features, for example, the Automated Liquidity Protocol.
To understand the structure of automated liquidity protocol, let’s put it simpler. UniSwap incentivizes its users to become liquidity providers. And, through that, the liquidity providers pool their money together and make a fund that executes all trades happening on the platform, but that comes with a specific fee.
In addition to that, each token that gets listed has its own pool allowing its users to contribute. And the token prices are determined by a mathematical algorithm performed by a computer.
Yes, UniSwap liquidity pools are where UniSwap gets mainly popular, but what perks does it offer users? Here’s how that works. Through UniSwap liquidity pools, users don’t have to wait for an opposite party to come and complete a trade. Instead, users can execute trades based on a price already provided, proving there’s enough liquidity in the pools to support a certain transaction. Before, there used to be UniSwap liquidity mining as well, but that was a very short-lived concept, and there isn’t anything like UniSwap liquidity mining anymore in UniSwap staking.
What Is SushiSwap?
Here’s the next DEX that stands on the top when it comes to UniSwap vs SushiSwap. SushiSwap is one of the top decentralized exchanges. And it originates as a development copy of its competitor, UniSwap.
Mainly, UniSwap gains popularity from its features, but what about SushiSwap staking? It uses the same tactic as UniSwap staking, i.e., offering users incredible features. But, SushiSwap mainly aims to improvise the features of UniSwap, the liquidity mining pools for trading crypto.
The Similarities Between UniSwap Staking and SushiSwap Staking
Before jumping into UniSwap vs SushiSwap, let’s first read about the similarities both decentralized crypto exchanges (DEXs) offer. And, because SushiSwap’s main inspiration comes from UniSwap token distribution, there are quite a few similarities between the two.
Automated Market Makers (AMM)
Instead of using a more conventional transaction facilitation method, both UniSwap and SushiSwap staking use AMM. In conclusion, users are facilitated by not waiting for another party to conduct a transaction.
This factor is another significant similarity when considering UniSwap vs SushiSwap. UniSwap liquidity pools are a major benefit for the users, and SushiSwap, a competitor of it, both provides the same benefits to its users. But UniSwap and SushiSwap fees aren’t to be missed when it comes to the Automated Liquidity Protocols.
UniSwap vs SushiSwap - The Key Differences
While reading about the UniSwap vs SushiSwap similarities, let’s consider the key differences between both.
This is known as a significant contributor to UniSwap vs SushiSwap. Both decentralized exchanges come with liquidity pools, which is their major feature. But, there are certain UniSwap or SushiSwap fees that you must pay for when performing a transaction in the liquidity pools. However,the percentage of swap fees is what sets them both apart.
Reading about SushiSwap vs UniSwap fees, let’s begin with UniSwap. In UniSwap, there are three significant fees tiers. Based on risk, you get given three rates, i.e., 0.05%, 0.3% and 1%. In contrast, SushiSwap expenses only charge a common swap fee, i.e., 0.3%, on every trading pair. And the liquidity providers get a 0.25% swap fee as well. Plus, SushiSwap comes with a SushiSwap gas fees that keeps fluctuating according to the trade volume.
Now that you know about the transaction fee UniSwap, let’s move towards the trade volume. Trade volume is the total value of trades or transactions on a specific platform. This mainly shows the metric for success growth on the platform. Referring to the current metrics, UniSwap is almost at $8 billion. At the same time, SushiSwap is way lesser and is around $1 billion.
While both DEXs have the feature of liquidity pools, there isn’t anything like UniSwap liquidity mining. Although, for a certain period, UniSwap did come with user incentives in the form of UNI tokens. But, UniSwap liquidity mining was for a limited time and never implemented for UniSwap users. On SushiSwap, users can avail of active liquidity mining benefits. Users can stake their tokens to earn the Sushi governance tokens. And this stands in complete contrast to UniSwap liquidity mining.
New Token Reward
This is another significant difference in UniSwap vs SushiSwap, and that is the token rewards. On UniSwap, you don’t get any rewards for new UniSwap token distribution on the platform.
On the contrary, on SushiSwap, you get the “Onsen Program” feature, which gives liquidity to new Sushi token distribution. Through Sushi token distribution, new users are encouraged to procure new tokens for SushiSwap staking.
Lending and Margin Trading
Let’s talk about UniSwap first. In UniSwap, you don’t have any specific chances of lending and margin trading. Hence, one major part of UniSwap issues is its emphasis on only contributing as a decentralized exchange and sticking to its principles. Whereas, SushiSwap doesn’t come with any limitations like that. Instead, it provides numerous other features, such as BentoBox. Through this feature, you can lend, borrow and even avail the margin trading.
Another significant factor for UniSwap vs SushiSwap is liquidity concentration. After you’ve read about Sushi token distribution, let’s give you an idea of how Uniswap staking works.
In UniSwap staking, there’s a concept of concentrated liquidity. The liquidity providers can concentrate their tokens in custom price ranges. Resultantly, this encourages users to make larger swaps. Whereas, SushiSwap doesn’t come with any feature like this, neither has it announced anything like that in the future.
Total Value Locked (TVL)
TVL refers to the total value or the number of assets locked within DeFi smart contracts. Through this, a visible impression of the value of users on a platform is provided. While UniSwap falls behind here, SushiSwap takes the lead with TVL. In 2021, SushiSwap had a TVL of $3.4 billion.
SushiSwap vs UniSwap Fees - Is SushiSwap or UniSwap Cheaper?
As we mentioned above, both differ quite a bit under the heading of UniSwap vs SushiSwap, UniSwap fees and SushiSwap fees. Here we’ll be mainly discussing the comparison of SushiSwap vs UniSwap fees, uniswap network fees and which happens to be the cheaper opinion for the users.
For UniSwap fees, you get three fee tiers paid fully to the liquidity providers.
SushiSwap mainly offers:
- 0.3% as a fee for swaps
- 0.25% given to the liquidity provider
- 0.05% gets distributed to the Sushi token holders
Being a token holder, you get to earn more in Sushi. At the same time, a liquidity provider (LP) finds the liquidity pool in UniSwap better as he makes 0.3%. Hence, UniSwap is a cheaper option to opt for when considering SushiSwap vs UniSwap fees.
How Does UniSwap Work?
Now that you’ve read about SushiSwap vs UniSwap fees, here’s a brief description of how UniSwap works. UniSwap, as a decentralized crypto exchange, mainly works by using smart contracts that get deployed on an Ethereum Blockchain.
Smart contracts let the users trade ERC20 tokens without needing an exchange. Instead, when users look forward to trading tokens for other preferred tokens, they can do that through the UniSwap smart contract.
Step-by-Step Process to How to Use UniSwap
After you’ve read about the UniSwap network fee, Sushi token distribution and other main differences that serve to the comparison of UniSwap vs SushiSwap, here’s a step-by-step guide to how to use UniSwap:
Step 1: Purchase Ethereum
Since UniSwap is built on an Ethereum network, your first step should be to acquire Ethereum via a cryptocurrency exchange. And beginning your use of UniSwap with Ethereum is the simplest and most convenient method to do it.
There are a number of different exchanges from which you may purchase Ethereum, some of them are as follows:
Step 2: Transfer ETH to Ethereum Wallet
The subsequent step is to move ETH to the wallet that was created for ethereum. For instance, you may use MetaMask as an Ethereum wallet on your computer. When you create an account with MetaMask, you will immediately be given a wallet address. Simply transmit your Ether to the wallet by tapping the send button on your exchange, and you will be set to go.
Step 3: Link Your Wallet to UniSwap
Now that you have your ETH wallet, you can easily navigate it in the UniSwap application. At the top right of the homepage of UniSwap, you can easily find the option to connect your wallet. All you need to do is log in, and link it with your wallet.
Step 4: Perform Trade or Start Providing Liquidity
So far, you’ve read quite a bit about UniSwap vs SushiSwap, both its similarities and differences. And, in similarities, both have the primary purpose of trade and provision of liquidity. To start with a trade, select the amount of ETH and the tokens you want to swap it with.
If you want to provide liquidity, find the “pool” tab on top of the screen and select the pair you want to provide liquidity for.
Does Sushi Coin Have a Future?
After looking at Sushi token distribution, UniSwap vs SushiSwap, SushiSwap and UniSwap issues, you must have been able to form an analysis of if Sushi coin has a future. To answer that, yes, Sushi coins do have a future. For crypto enthusiasts and DeFi investors, this can be a great way to generate huge profits by trading crypto.
How to Use SushiSwap?
Here’s a step-by-step guide to using SushiSwap:
Step 1: Get ETH
The first step is to get Ethereum coins. Then, attach the ERC-20-compliant wallet to SushiSwap.
Step 2: Swap Tokens
Open the SushiSwap application and from the top left side of the application, select the Swap option. The SushiSwap token will appear on your screen. Select the token from the menu of SushiSwap and enter the amount you want to exchange.
Plus, SushiSwap and UniSwap are very similar, and if you get your hands on either of these crypto exchanges, you can easily use any of these DEXs for performing transactions.
What’s Better Than UniSwap?
There’s a list of the best alternatives to help you with a crypto exchange if you start facing UniSwap issues. Here’s a list of exchanges that are better than UniSwap:
- Binance DEX
Is UniSwap Legitimate?
Yes, despite UniSwap issues, UniSwap is legitimate. It’s one of the largest crypto exchanges on the Ethereum Network. Its native token is UniSwap.
Is UniSwap Crypto a Good Investment?
Yes, UniSwap crypto is a great investment. Even though the crypto prices keep fluctuating, what justifies investing in UniSwap is that it's a credible decentralized crypto exchange and crypto investors are already in favor of investing in it. Another factor that UniSwap gets preference for is its market performance and good ROI.
Why Do People Use UniSwap?
People use UniSwap due to the following reasons:
- It’s one of the largest crypto exchanges
- It allows a convenient exchange of cryptocurrencies
- There are liquidity pools
- The evolution of decentralized exchanges provides higher opportunities for efficient crypto exchanges.
- UniSwap vs SushiSwap give a glimpse of the long-term state of Decentralized Finance (DeFi).
- UniSwap has an Ethereum base.
- UniSwap and SushiSwap both offer liquidity pools.
- SushiSwap gas fees are currently 4% down, and it keeps fluctuating.
The concept of decentralized exchanges, such as UniSwap and SushiSwap, is transforming the landscape of DeFi. And after giving you a general overview of UniSwap vs SushiSwap, SushiSwap gas fees, UniSwap network fee, transaction fee UniSwap etc., You must have formed an analysis of a better option to invest in.
Although the comparison of UniSwap and SushiSwap represents the expected state of Decentralized Finance, investing in these cryptocurrencies is sure to be favorable in the long run.
And the concept of investing in cryptocurrencies, which stands on blockchain technology, is rising with the introduction of blockchain development companies and top custom software development companies worldwide. Due to this, finding the best software development company can become quite difficult. But, Distinguished can help - it’s a B2B service-providing platform where you can find a list of the best software development companies that can transform your dream project into reality.
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