{"id":4769,"date":"2021-09-21T11:41:44","date_gmt":"2021-09-21T11:41:44","guid":{"rendered":"https:\/\/paybis.com\/blog\/?p=4769"},"modified":"2024-04-10T14:16:10","modified_gmt":"2024-04-10T14:16:10","slug":"sushiswap-price-prediction","status":"publish","type":"post","link":"https:\/\/paybis.com\/blog\/sushiswap-price-prediction\/","title":{"rendered":"SushiSwap Price Prediction \u2013 Opportunity or Risky Trade?"},"content":{"rendered":"

DeFi has become a major driving force in the cryptocurrency market. Today, it provides investors with multiple opportunities to make passive income<\/a>. Currently, it offers high APY yield farming and peer-to-peer lending.<\/p>\n

One of the most popular yield farming platforms that emerged in the 2020 DeFi Summer<\/a> was the controversial SushiSwap.<\/p>\n

With a somewhat questionable reputation due to its turbulent journey, Sushi has been a project to keep in eye on. In this article we will attempt to provide you a plausible SushiSwap price prediction for the mid and long terms and try to assess whether the investment is worth the risk.<\/p>\n

Activating hopium – Let\u2019s explore the background of this interesting crypto project! If you are in a hurry to see our SushiSwap<\/a> price prediction, head towards the last few chapters of this post!<\/p>\n

What is Sushi?<\/h2>\n

SushiSwap, or simply Sushi, is an automated market maker (AAM) that provides smart contract token swaps in addition to a wide range of yield farming functionalities. Kinda like Uniswap (which it is a fork of), but then more versatile, as the protocol to be deployed on various blockchains and scaling solutions.<\/p>\n

This means that, in addition to Ethereum, SushiSwap can be used with popular scaling solutions like Polygon or rising smart contract platforms like the Binance Smart Chain.<\/p>\n

SushiSwap is considered one of the pioneering platforms of the DeFi space. Its success and controversies brought a lot of attention to the ecosystem and have put it into the mainstream investor\u2019s radars. But why do investors still underestimate SushiSwap?<\/p>\n

Well, this has a lot to do with the initial release of the platform back in August 2020. Let\u2019s have a closer look at this event before we go further with our SushiSwap price prediction.<\/p>\n

SushiSwap\u2019s bumpy origins<\/h2>\n

There were three major events during the first weeks of SushiSwap\u2019s existence that changed how DeFi protocols are viewed by investors and developers.<\/p>\n

The Vampire Attack marketing ploy<\/h3>\n

SushiSwap was launched in August 2020, which was at the peak of the first major growth of the DeFi ecosystem. The project gained a lot of attention, mainly because of the nature of its launch. It quickly gained traction in the DeFi community by positioning itself as a direct competitor of Uniswap, another popular decentralized exchange (DEX).<\/p>\n

To achieve this, the team behind Sushi employed a marketing strategy that is today commonly referred to as a \u201cVampire Attack\u201d. <\/strong>The goal was to siphon liquidity from Uniswap into Sushi, by providing increased incentives for liquidity providers (LPs) to migrate their liquidity into Sushi.<\/p>\n

Anyone providing liquidity to Uniswap receives the corresponding liquidity pool (LP) tokens to prove their participation in the protocol. Sushi created a reward system where investors could stake their Uniswap LP tokens into SushiSwap and receive high returns in SUSHI tokens for doing so. The rewards were incredibly appealing, providing APY between 200 and 1000% in SUSHI tokens in the first weeks of release.<\/p>\n

Consequently, investors deposited tons of liquidity into Uniswap to get LP tokens and receive Sushi rewards. And because Uniswap didn\u2019t have its own reward token at the time, SushiSwap provided better incentives than the original DEX.<\/p>\n

Once investors were hooked on the reward system, it resulted in a massive migration of funds from Uniswap to SushiSwap, finalizing the vampire attack.<\/p>\n