Decentralized finance(DeFi) is a financial structure that does not rely on intermediaries or a central body to execute transactions. In most cases, DeFi platforms utilize smart contracts to implement transactions. This way, users can access vital services without worrying about external control. Following the exponential growth of cryptocurrencies in early 2021, DeFi protocols like SushiSwap and 1inch have also attracted more investors.
Today, DeFi platforms aim to provide traditional financial services with digital assets. So, if you want to save, take loans or even invest, you can do these and more through DeFi. This open-source alternative to traditional finance is limitless and strives to provide error-free services, thanks to smart contracts.
SushiSwap is arguably one of the most popular decentralized exchanges (DEXs). Quite similarly to UniSawp, it offers swapping, staking, borrowing, and other related services. On the other hand, 1inch is a decentralized exchange aggregator, and it leverages technology to connect users to the best swapping routes. In a way, these platforms have their similarities. Still, their differences can help you make a better decision when considering the DEX platform to use.
What Is A Decentralized Exchange (DEX)?
A decentralized exchange is a platform that offers peer-to-peer services between two parties. In this case, a central body is eliminated, enabling users to transact directly. These platforms try to correct some problems associated with centralized exchanges, thereby saving time while maximizing satisfaction.
In some cases, the platform has an automated system that assists the parties in completing their transactions. To maintain seamless and swift services, DEX uses blockchain technology and also smart contracts. Smart contracts are known as codes embedded in the blockchain. They execute transactions without the need for human intervention.
In contrast to DEX, central bodies control centralized exchanges (CEXs), resulting in delays in transactions. When using CEX, you may need to follow some procedures. Unlike Decentralized exchanges, CEXs are companies that are focused on maximizing profits. Similarly, these platforms make their own decisions without relying on a community.
What is SushiSwap?
SushiSwap is a decentralized exchange operating on the Ethereum blockchain. Like other decentralized finance, SushiSwap utilizes liquidity pools to manage a trading platform. In 2020, Chef Nomi—a pseudonymous group, founded the relatively new exchange.
According to some reports, SushiSwap’s programmers created the platform by utilizing UniSwap’s code. The buzz surrounding this exchange started when its native token called SUSHI entered the game. Additionally, the founders promised to reward liquidity providers with tokens if they locked funds into the protocol. This attracted numerous investors, especially since it also promised more attractive rates.
As in other DEXs, the…
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