Sushi Sampler: The Raw Deal

“Isn’t that, like, raw fish…?”

There is a first time for everything. First time buying Bitcoin. First time using Metamask. First time eating raw fish…and here you might start making “that” face. That’s the face that sorority girls make when they stare at their first attempt at a California roll which is essentially cooked cod fish and mayonnaise. Not a far cry from anything they’ve eaten, but it’s presented in a way that is, “like, I dunno, just weird.” That’s basically the face that many people in the DeFi space are making after the launch of the most talked about “food token” of the week: SUSHI.

Do we need it?

Sushiswap is a Uniswap fork with one major difference: chopsticks. You are in control. If you’ve ever watched someone eat with chopsticks for the first time, then you have a general idea of where we are in this space. No, there are not actual chopsticks, but there is a governance token ( SUSHI) and it has a couple of use cases that may be appetizing to those with a more sophisticated palate.

Uniswap does not have a token yet, and perhaps never will. Uniswap V2 introduced a toggle-able .05% protocol fee that cuts into the .3% of fees going to its liquidity pools. Liquidity pools are virtually pools of tokens that are provided by users of the protocol. Anyone entering the Uniswap exchange to buy a token is essentially buying that token from other users. The liquidity providers, or LPs, get a share of the fees generated by this process. The protocol fee is rumored to be intended to pay back the VCs, however, the only way to turn that on is through decentralized governance. What governance? That’s where SUSHI comes in.

Fork in the road? Take it.

What if that fee, or fees in general, were allocated to users holding a native governance token? What if holders of that token actually got to vote on things like fee percentages, listings, developments, etc. Sounds pretty tasty, right? Well, don’t start getting your chef knives out yet, although SUSHI seems simple to make, it is actually quite complicated.

As of right now, there are so many proposals being voted on, SUSHI Discord group is like a bad Yakuza movie. You’ve got people hoping it’s a scam and trying to time their exit. You’ve got the mysterious and anonymous, self-declared Head Chef of SushiSwap, ChefNomi (@NomiChef) trying to hamstring those efforts by creating a proposal to expedite the release of the trading platform within the next couple of days. See migration timer: https://etherscan.io/block/countdown/10850000 . And of course, you’ve got newbs dropping in every 5 minutes asking “Wen Moon?”, “How do I farm?”, “When should I buy?”, “Should I sell?” and “Is Sushi a scam…?”

Well is it?

I can tell you one thing with absolute certainty. SUSHI is trying exceptionally hard to NOT be a scam. As complex as this subject can get, I will give the sashimi, no rice. Though anonymous, ChefNomi has been fairly transparent about any flaws in the contract and has shared those openly on twitter. The contract has been audited twice. A security audit by Quantstamp, and a full audit by PeckShield with no major issues. As of right now, the biggest issue is the timelock contract.

A timelock contract is the contract that holds all the rest of the tokens to be deployed at a later time. The issue here is that, currently, only one anonymous person has the keys to that address. Fortunately, ChefNomi has addressed this:

“With all the growth of @SushiSwap(and the FUD), I’m considering transitioning the admin control of MasterChef and devshare address to a MultiSig address behind timelock.” -ChefNomi

The signatories of that contract have yet to be determined.

Raw, I’m gonna give it to ya with no trivia…

Enough with the puns, Shillbo, am I buying this or what? Here is my unsolicited, non-financial advice: Farm it. These are the tools that everyone in the future will have to learn. This idea that you can just close your eyes to new developments and hope they disappear by spinning around three times and yelling, “Scam!” has already left most Maximalists in this space obsolete. Don’t reject anything. Absolve everything. Learn how to use Metamask. Learn how to connect your wallet. Learn how to use yield-farming or liquidity mining mechanisms. Learn how to vote on governance proposals. This is the hidden value of farming. You will learn something other people are too afraid to try. Nothing is free. You may lose, but you will make gains. You will gain knowledge, and with that financial confidence. If you make some money in the interim, you f-ing deserve it.

How to farm?

  1. You will first need a wallet. I’ve been shilling Metamask because it works. You can use a hardware wallet with Metamask as well, but if you can do that, you don’t need my help.
  2. You will then need some ETH (and go and get it cause gas is cheap right now). Any exchange will do.
  3. You will need Liquidity Pool tokens from Uniswap. Check the pairs on SushiSwap for the highest APY% and go from there. Stable coin pairs are less volatile, but APY is lower. You will need equal amounts of ETH to match whatever asset you pair. So, $200 of BAND is going to be a $400 investment.
  4. For the love of all that is holy, please go research Impermanent Loss. That is far too much to explain here and you need to understand that this is the largest risk to your funds in yield-farming.
  5. After you have researched your risk and you have those LP tokens, go to SushiSwap.org, see the menu, select your token pair and stake. There will be two transactions. One to approve and one to stake. Don’t be afraid of the fees, Your transaction doesn’t always charge you what it says it will. That’s just the max. Gas is lower than it has been. I think this is an excellent opportunity.
  6. Small amounts may not be profitable, please manage your risk.
  7. Once you have successfully staked, you can check the menu and see the Sushi rollin in. (See what i did there)

Pro Tip: you can always use https://www.uniswaproi.com/ to check on your impermanent loss. Use at your own risk.

The Mochi

I am not going to recommend that you buy SUSHI, but if you do, the rewards for staking a SUSHI/ETH pair far exceed every other reward. They have to. SUSHI is so volatile, impermanent ioss, or as I like to call it, “The Imp” is always lurking to take your investment. The percentage of reward has to outweigh the risk by A LOT.

If you have already FOMOed into SUSHI and don’t wanna risk further losses through impermanent loss, you’re not ready to sell it, or you think it is definitely going to MOON, but you want to do something with it. Consider staking SUSHI as a singular asset on Cream.finance and earn yourself a lil CREAM on top.

DEGEN or nah?

As they say, do you wanna be right or do you wanna be rich?

Itadakimasu!!

Originally published at https://www.uptrennd.com.

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Crypto enthusiast. Not a financial advisor. All puns are intentional. @TheRealShillbo (twitter)

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Shillbo Baggins

Shillbo Baggins

Crypto enthusiast. Not a financial advisor. All puns are intentional. @TheRealShillbo (twitter)

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