Each pool works like a market, where other users can come to buy and sell tokens. This is done by depositing an equivalent value of two tokens in the pool. Anyone can be a liquidity provider on SushiSwap and earn rewards in proportion to their share of the pool. A liquidity pool is where SushiSwap users become liquidity providers (LP) by locking their crypto assets.
Cryptocurrency trading on SushiSwap is processed by the smart contracts in liquidity pools.
There is no order book or centralized authority. MISO allows individuals and communities to launch their new project tokens through the SushiSwap platform.Īs mentioned, SushiSwap is an automated market maker (AMM) protocol that works as a decentralized exchange. It is a token launchpad platform in the SushiSwap ecosystem tailored to meet the expectations of the SUSHI community. MISO, or Minimal Initial SushiSwap Offering, for example, is a product that arose from a governance proposal. Instead of a more traditional team like Uniswap, the development of SushiSwap is in the hands of SUSHI token holders.Ī strong community can be a powerful asset for any token project, but this is especially true for a DeFi protocol. These can be minor or even major changes to the SushiSwap protocol. OK, but what can token holders do with these governance rights? On SushiSwap, anyone can submit a SushiSwap Improvement Proposal (SIP), which SUSHI holders can vote on. In most cases, the tokens distributed also grant governance rights to token holders. Those fair token launch models aim to level the playing field for everyone involved, and they often include no premines, little or no founder allocation, and equal distribution based on the amount of funds supplied by each user. The growth of liquidity mining (yield farming) as a valid method for token distribution has given rise to an abundance of new token launches. Why has this spurred so much interest? Well, community governance is heavily intertwined with the DeFi ethos. In a simplified way, we can say that the SUSHI community owns the protocol.
SUSHI entitles holders to the governance rights and a portion of the fees paid to the protocol. As of November 2021, it is created at a rate of 100 tokens per block, and its circulating supply has already reached approximately 50% of the total supply at 127 million tokens. The supply of SUSHI is dependent on the block rate. SUSHI has a maximum supply of 250 million tokens. It is an ERC-20 token distributed to liquidity providers on SushiSwap via liquidity mining.
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