SushiSwap Security Review 2024: Protecting Users in the DeFi Space

SushiSwap, a decentralized exchange built on the Ethereum blockchain, has made waves in the cryptocurrency world with its innovative trading methods for ERC-20 tokens. Entering 2024, SushiSwap continues to prove its value as a valuable player in the decentralized exchange space. In this article, we’ll take a closer look at SushiSwap’s features and advantages and review its progress in 2024.

What is SushiSwap?

Sushi, also known as SushiSwap, is a decentralized exchange (DEX) built on the Ethereum blockchain. It’s a fork of the popular decentralized exchange Uniswap but with its unique features, such as its own token, SUSHI, which provides governance rights and a reward system for liquidity providers. Using “The Great Sushi Bake,” SUSHI tokens are distributed to users. The exchange aims to provide a decentralized, community-driven alternative to centralized exchanges for digital asset trading.

It supports 51,900 cryptocurrency pairs and allows trading across multiple crypto networks. Additionally, SushiSwap offers features like earning rewards, accumulating yield, lending, and leverage. All these features are accessible on a decentralized and community-driven platform.

This decentralized platform is governed by $SUSHI token holders. Major changes are decided by community voting, aside from the core team handling day-to-day operations and development. Additionally, the platform offers various products, such as the decentralized exchange (Sushi), lending markets (Kashi), yield tools (Onsen), auction platform (Miso), AMM framework (Trident), and payroll solution (Furo).

What is the Sushi Token?

SUSHI is the token used to govern the SushiSwap decentralized exchange (DEX) based on the Ethereum blockchain. Holders of the SUSHI token can participate in community governance by voting on platform development and proposals. They can also stake their tokens to earn a portion of the transaction fees generated on the platform. SUSHI can be purchased on the open market or earned by providing liquidity to the platform’s pools. The total supply cap of SUSHI is 250 million, to be reached by November 2023.

What is the Sushi DAO?

The decentralized autonomous organization (DAO) of SushiSwap is governed by its community. The best part is community members can participate in the project and its future and contribute at any time. Major structural changes and the use of the “devfund” wallet are decided by community votes, while minor changes affecting operations, such as changes to the SushiSwap menu farming pairs, are decided by the core team.

Features

SushiSwap is a decentralized exchange offering various features to users:

• Liquidity Providing: Users can provide liquidity to the platform and get incentivized in the form of transaction fees and Sushi tokens, with additional rewards through staking.
• Token Distribution: Sushi tokens are distributed to stakers of liquidity pools.
• Transaction Fee Distribution: Transaction fees are 0.3%, including 0.25% for liquidity providers and 0.05% for xSUSHI holders as governance fees.
• Security: The exchange undergoes security audits to ensure user safety.
• Academy: Sushi Academy is an educational resource for users of all levels to learn about DeFi.
• Smart Contracts: The platform continually tests its smart contracts to ensure their safety.
• Liquidity Migration: SushiSwap allows the migration of tokens used for liquidity on the platform, launching a new liquidity pool for token holders.
• Decentralized Governance: SUSHI token holders govern SushiSwap through community voting. It includes major structural changes and the use of the devfund wallet. However, minor changes affecting operations, such as changes to the SushiSwap menu farming pairs, are decided by the core team.
• Cross-Chain Exchange (SushiXSwap): Allows trading tokens across multiple crypto networks.
• Other products include: decentralized lending markets (Kashi), yield tools (Onsen), auction platform (Miso), AMM framework (Trident), and payroll solutions for vesting and streaming (Furo).

How to Use SushiSwap?

Trading cryptocurrencies on SushiSwap involves several steps:

1. Connect Your Wallet: You need to connect your Ethereum wallet to the platform. Use compatible wallets like Metamask or Trust Wallet.
2. Add Liquidity: To start trading on SushiSwap, you need to provide liquidity for a trading pair. This means adding an equal value of two different tokens to the pool. Click the “Add Liquidity” button on the trading pair you wish to provide liquidity for.
3. Trade Tokens: You can begin trading tokens by adding liquidity to the pool. You can buy or sell tokens at the current market price or set your limit orders.
4. Withdraw Liquidity: You can withdraw your liquidity by clicking the “Remove Liquidity” button on the trading pair you’ve provided liquidity for.

It’s worth noting that trading on a decentralized exchange like SushiSwap is different from trading on centralized exchanges. Transactions on DEXs may take longer to confirm, and prices may differ from those on centralized exchanges. Moreover, the platform is still under development and may be prone to errors.

It’s also important to note that the use of Sushiswap may vary depending on the platform version, the knowledge and experience of users, and their own personal preferences.

How to Buy Tokens on Sushiswap?

To use SushiSwap, you need to connect a wallet compatible with Ethereum, such as Metamask or Trust Wallet, to the DEX, and follow these steps:

1. Get the Metamask wallet browser extension from http://metamask.io/
2. Purchase $ETH and send it to your Metamask ETH wallet address
3. Then, follow the steps on https://chainlist.xyz/ to add the Polygon network to your Metamask
4. Go to sushi.com/swap and connect your Metamask wallet
5. On the swap page, select “xSwap” and choose “Ethereum” as the starting point and “Polygon” as the destination
6. Enter the amount of ETH you wish to spend, then click “Swap”
7. Confirm the swap and add the $MATIC token to your Metamask
8. You have now successfully purchased $MATIC on the Ethereum mainnet and transferred it to the Polygon network.

How to Exchange Tokens on Sushiswap?

Let’s look at how to exchange MATIC tokens for USDC tokens:

1. Go to sushi.com/swap and connect your wallet
2. Select the Polygon mainnet from the dropdown menu
3. In the top left corner of the swap window, select “Swap”
4. Select MATIC in the top half of the swap window and enter the amount you wish to sell
5. Select the currency you want to sell MATIC for, such as USDC, then click “Swap.”
6. Confirm the swap, and you have successfully sold MATIC for USDC.

Exchange Fees and Supported Payment

The transaction fee is 0.3%, including 0.25% for liquidity providers and 0.05% for xSUSHI holders as governance fees. This fee structure is set up to incentivize liquidity providers and xSUSHI holders to continue providing liquidity and participate in the governance of the Sushiswap platform.

Customer Support

Sushiswap does not have a dedicated customer support team. However, they have a community-driven support system. Users can obtain help and support by visiting their official website sushi.com, where they can find various resources, such as an FAQ section, guides, and tutorials.

They also have a dedicated community forum and support center where users can find answers to common questions and seek help from other members of the Sushiswap community. Additionally, users can contact the Sushiswap team on social media platforms like Twitter and Telegram, where they may receive responses from the community.

Hacking Incident

In April 2023, SushiSwap was hit by a significant security vulnerability that led to the loss of over $3.3 million by users. The incident involved a bug in the “approve” mechanism of the RouterProcessor2 contract, which allowed hackers to steal tokens using a technique known as “yoinking.”

SushiSwap’s head, Jared Gray, confirmed that the assets had been recovered, and users can now safely trade on SushiSwap as the infected contracts have been removed, and users are advised to revoke approval for the infected contracts.

Bottom Line

Sushiswap is a decentralized exchange built on the Ethereum blockchain. It allows trading of various cryptocurrencies, with unique liquidity providing and token farming features, low transaction fees, and a user-friendly interface. The platform lacks dedicated customer support but provides community-driven support and resources to help users navigate the platform.

For those looking to trade on a decentralized exchange and participate in governance, Sushiswap has the potential to be a good choice, but doing your own research and due diligence before using it is very important.