SushiSwap (also known as Sushi) is a decentralized finance (DeFi) protocol consisting of various financial products, including a decentralized exchange (DEX), yield instruments, a cross-chain AMM, bonds, a token streaming and vesting platform, and liquidity pools. SushiSwap, the protocol’s primary application, is a fork of decentralized exchange Uniswap utilizing the same x*y=k automated market-making mechanism.
SushiSwap was launched in September 2020 by pseudonymous developers Chef Nomi and 0xMaki. The decentralized exchange sought to build off of Uniswap’s “core design,” differentiating itself via community-oriented onchain governance and liquidity incentives via the SUSHI token.
SushiSwap conducted a “fair launch” starting at Ethereum block 10,750,000.00 (Aug. 28, 2020), in which liquidity providers could earn newly minted ERC-20 SUSHI tokens for providing liquidity to the protocol. For the first 100,000.000 blocks (~two weeks) following the SUSHI distribution launch, SushiSwap minted 1,000.00 ERC-20 SUSHI tokens per block to liquidity providers in supported pools. Following the 100,000.000 blocks, rewards dropped to 100.00 SUSHI per block. ERC-20 SUSHI’s 250.00 million token supply cap has been reached.
In September 2020, Chef Nomi drained the development fund, swapping it for 37,400.00 ETH, worth $14.00 million. As a result, SUSHI’s price dropped over 70.00% in less than a day. The following day, facing pressure from the community, Chef Nomi turned the private key of the SushiSwap smart contract over to then-FTX CEO Sam Bankman-Fried. SushiSwap subsequently migrated ~$830.00 million of liquidity from Uniswap. Chef Nomi eventually returned all the withdrawn funds and apologized to the community.
In March 2021, two-thirds of SUSHI LP rewards were unlocked after a six-month lock-up period. On April 6, 2021, the multi-sig distributed the accrued SUSHI rewards and enabled all LPs to claim rewards.
In December 2022, SushiSwap deprecated its Kashi (borrowing and lending) and MISO (launchpad) features. The two features’ respective frontends can be seen here and here.
In May 2023, Sushi launched its V3 protocol, adding Concentrated Liquidity (CL) and expanded multichain support.
In October 2023, the Sushi team introduced SushiXSwap V2. V2 incorporates the Base network, adding six other supported networks to the list, including Ethereum, Arbitrum, Optimism, Polygon, Avalanche, and BNB Smart Chain. Additionally, V2 incorporated USDC via the Cross-Chain Transfer Protocol (CCTP). This system facilitates creating and deleting native USDC tokens on various supported chains without bridging fees. V2 also includes Payload Executors, which refine the swapping procedure by simplifying the management of payload data. As of March 2024, Sushi users can complete same-chain swaps on 31 networks, and native cross-chain swaps on seven networks: Ethereum, Base, Arbitrum, Optimism, Polygon, Avalanche, and BNB Smart Chain.
On Jan. 24, 2024, the Sushi team announced that Sushi Bar would be relaunched, allowing users to stake SUSHI for xSUSHI for a share of protocol trading fees. This also marked the conclusion of Kanpai 2.0, a 2022 initiative in which 100% of xSUSHI protocol fees (0.05% of the 0.30% standard trade fees) were allocated to the DAO treasury.
On Feb. 13, 2024, SushiSwap shared plans to launch Susa, a decentralized derivatives exchange built on Layer N, a Layer-2 network designed as a network of custom rollup nodes. The announcement claims that Susa will be able to process "100,000 transactions per second with latency periods under 1 millisecond," and all transactions will be posted onchain. According to the announcement, “Susa aims to launch in Testnet in H1 this year.” Prospective users are invited to sign up for the limited beta here.
On Feb. 22, 2024, SushiSwap launched Sushi Bonds, a liquidity mining program offering asset bonds to accrue protocol-owned liquidity (POL). The Sushi Bonds launch is in collaboration with the Bond Protocol, which will manage the smart contract infrastructure, and the Steer Protocol, which will manage the liquidity obtained from bonders and move it into various Smart Pool strategies for optimization. Sushi Bonds will pilot five multichain projects, including Savvy DeFi, ICHI, Rodeo Finance, Splinterlands on the Arbitrum network, and Neptune Mutual on the Polygon PoS chain.
On Feb. 27, 2024, SushiSwap announced the final phase of Trident Pools, urging users to withdraw assets from these pools before Mar. 15, 2024, or transfer them to the newer Sushi V3 Automated Market Maker (AMM). After the specified deadline, the user interface (UI) for Trident Pools will be discontinued, and users will need to withdraw assets either through direct interaction with the smart contract or with assistance from the Sushi team. Sushi has provided a guide for users to ease the transition.
