SushiSwap is a multichain decentralized exchange for swapping tokens and supplying liquidity; its standard V2 pool charges 0.3% per trade. You use a crypto wallet to trade directly through code on a blockchain. You can also put tokens into a pool and earn a share of its trading fees.
What is SushiSwap, and what can you do with it?
SushiSwap is a decentralized exchange, or DEX, that lets people trade without depositing tokens with an exchange operator. Your wallet holds your tokens until you approve a transaction. The exchange uses smart contracts: programs on a blockchain that carry out trades under set rules.
Its core system is an automated market maker, or AMM. An AMM trades against a liquidity pool, which is a shared supply of two tokens. Think of a pool as a change drawer: traders take one kind of token out and put another in.
People who fill that drawer are liquidity providers. They deposit tokens so others can trade, then receive a share of the fees those trades generate. SushiSwap runs on multiple networks, but a token on one network is separate from a token on another.
How does a token swap work?
A SushiSwap swap exchanges one token in your wallet for another through available liquidity. Say you trade a token worth $100 for a second token. The trade takes your first token and sends the quoted amount of the second to your wallet.
The pool’s balance changes during that trade. As one token becomes scarcer in the pool, its price rises there. This is price impact : a larger trade moves the price more, especially in a small pool. The exchange may route a trade through other pools when that produces a better quote.
Before trading, check these four things:
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Network: Your wallet and the tokens must be on the network used for the trade.
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Token identity: Check the token’s contract address, the unique address of its blockchain program. Names and symbols can be copied.
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Amount received: Compare the quoted output with the amount you meant to trade.
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Gas: Keep some of the network’s native coin to pay the blockchain for processing.
A first trade may require an approval transaction. This gives the smart contract permission to use a specified amount of your token; the swap is a separate transaction. Read what your wallet asks you to sign, including the approval amount.
If you came to SushiSwap to exchange tokens, first make sure your wallet holds them on a compatible network. sushiswap.co lets you swap tokens on supported EVM networks and supply liquidity to pools that earn trading fees. Try a small trade first, then check the tokens received in your wallet.
Moving value between networks is a different task from swapping two tokens on the same network. It needs a cross-network route or bridge, which moves value between blockchains. Check the destination network as carefully as the token: a successful transfer can still leave funds on the wrong network for your next step.
What does a swap cost?
A swap costs the pool’s trading fee, network gas and any extra fee shown for its route. SushiSwap’s standard V2 pool fee is 0.3%; V3 pools use fee tiers that commonly range from 0.01% to 1%. The route determines which pools and fees apply, so check the full quote before signing.
Gas changes with the network and how busy it is. Even a failed blockchain transaction can use gas because the network still processes it. Leave enough native coin for a possible approval and the final swap.
The quote also has slippage , the difference between the expected price and the price when the trade goes through. A slippage limit sets the most change you will accept. For example, a 0.5% limit on a quote of 100 tokens means receiving fewer than about 99.5 should stop the trade. A tight limit may cause a moving-price trade to fail; a loose one can accept a poor result.
How do you earn fees by providing liquidity?
You earn pool fees by adding the tokens traders need and keeping a share of that pool. In a simple V2 pool, you usually supply equal values of its two tokens. If you add $500 of each to a pool worth $50,000 afterward, your share is about 2%.
That share earns its portion of fees from trades using the pool. It does not promise a fixed return: earnings depend on trading activity, the pool’s fee rules and how much liquidity others add. Your pool position records your share so you can later remove your assets.
The main trade-off is impermanent loss . A pool changes how much of each token you hold as traders swap. For example, if one token doubles in price, a basic 50/50 pool can leave you with about 5.7% less value than simply holding both tokens, before fees. The loss can shrink if prices move back, but fees may also fail to cover it.
V3 pools add another choice: a price range where your liquidity is active. A narrow range may earn more fees while trading stays inside it. If the price leaves that range, the position stops earning swap fees until the price returns or you adjust it. For a first deposit, I would choose a simple, active pool and understand both tokens before considering a narrow range.
SushiSwap lets you swap from your wallet or earn fees by supplying a pool. Start by checking the network, token address, quote and gas. If you provide liquidity, compare possible fees with the risk of holding a changing mix of two tokens.