SushiSwap Ethereum DEX Review: How It Works, Pros, Cons, and Is It Worth It?

When you want to trade crypto without handing your keys to a centralized exchange like Binance or Coinbase, you turn to a SushiSwap. But what exactly is SushiSwap, and is it still worth using in 2025? Unlike traditional exchanges, SushiSwap doesn’t hold your money. You trade directly from your wallet using smart contracts on Ethereum. It’s not flashy, it’s not perfect, but it’s been around long enough to prove it’s not just another DeFi fad.

What Is SushiSwap?

SushiSwap is a decentralized exchange (DEX) built on Ethereum that lets you swap tokens without a middleman. It launched in August 2020 as a fork of Uniswap - meaning it copied Uniswap’s code but added its own twists. The original creator, Chef Nomi, vanished after pulling $1.4 million from the treasury, causing a major uproar. Sam Bankman-Fried stepped in briefly before handing control to a community-run multisig. Today, nine people manage governance, and five can update the core code - far from fully decentralized, but stable.

Its name and branding are built around Japanese cuisine: liquidity pools are called "BentoBox," loans are "Kashi," and the token is SUSHI. It’s a quirky way to make DeFi feel less intimidating. If you’ve ever been scared off by terms like "automated market maker," SushiSwap’s theme helps you get past that.

How SushiSwap Works on Ethereum

At its core, SushiSwap uses liquidity pools. Instead of matching buyers and sellers like a stock exchange, it uses smart contracts filled with paired tokens - say, ETH and USDC. Anyone can add their tokens to these pools and earn a share of trading fees. If you deposit $1,000 worth of ETH and USDC into a pool, you become a liquidity provider (LP). Every time someone trades between those two tokens, a small fee (0.3%) is split among all LPs.

The math behind it is called the constant product formula: x * y = k. It keeps prices stable based on supply and demand inside the pool. But there’s a catch: impermanent loss. If one token’s price swings wildly compared to the other, you might end up with less value than if you’d just held the tokens in your wallet. It’s not a loss until you withdraw, but it’s real.

SushiSwap supports every ERC-20 token on Ethereum. That means hundreds of tokens you won’t find on Coinbase or Kraken are available here - including obscure memecoins and new DeFi projects. But Ethereum’s gas fees can be brutal. A simple swap might cost $5-$20 during peak times. That’s why SushiSwap now runs on seven chains: Arbitrum, BNB Chain, Polygon, Moonriver, and others. You can still use Ethereum, but most active traders now use the faster, cheaper alternatives.

The SUSHI Token: More Than Just a Trading Pair

SUSHI isn’t just a token you trade - it’s your ticket to earning and influencing the platform. There are 250 million SUSHI tokens total, and about 180 million are in circulation. You can earn SUSHI by:

• Providing liquidity to pools (liquidity mining)
• Staking SUSHI in the SushiBar for rewards
• Participating in governance votes

Staking SUSHI gives you xSUSHI, which earns a cut of trading fees. Right now, annual yields vary between 3% and 15%, depending on pool activity and token price. It’s not as high as it was in 2021, when people were making 100% APY, but it’s still a solid passive income stream if you believe in the long-term.

Governance is where things get messy. Proposals are voted on by SUSHI holders. But in practice, a small group of wallets controls most votes. Over 60% of SUSHI is held by just 10 addresses. That’s not community-driven - it’s oligarchic. If you’re hoping for true decentralization, you’ll be disappointed.

Pros and Cons of Using SushiSwap

Pros

• Multiple blockchains: You’re not stuck on Ethereum. Use Arbitrum or BNB Chain for cheaper, faster trades.
• High earning potential: Liquidity mining and staking still offer decent returns compared to centralized platforms.
• Beginner-friendly branding: The sushi theme makes DeFi feel less like a tech lecture and more like a fun experiment.
• Full control of funds: No KYC. No freeze. No bank. Your wallet, your rules.

Cons

• High Ethereum gas fees: Trading on mainnet is expensive and slow. Don’t do it unless you have to.
• Impermanent loss risk: If you add liquidity to volatile pairs, you could lose money even if the token price goes up.
• Centralized governance: Nine people hold the keys. Not the community-run utopia it claims to be.
• History of drama: Chef Nomi’s exit and SBF’s brief takeover left scars. Some users still don’t trust the team.
• Lower fee revenue than Uniswap: SushiSwap takes 0.25% of trades (vs. Uniswap’s 0.3%), so liquidity providers earn less per trade.

SushiSwap vs. Uniswap: What’s the Real Difference?

People compare SushiSwap and Uniswap like it’s a battle. But the truth? They’re twins with different personalities.

If you’re just swapping ETH for DAI, Uniswap is cleaner and cheaper. But if you want to earn extra rewards, stake your tokens, or dive into yield farming, SushiSwap gives you more tools - and more risk.

Who Should Use SushiSwap?

SushiSwap isn’t for everyone. Here’s who it’s best for:

• DeFi beginners: The sushi theme and simple UI make it easier to start than other DEXes.
• Liquidity providers: If you have stablecoins or blue-chip tokens to lock up, you can earn passive income.
• Multi-chain traders: If you already use Arbitrum or BNB Chain, SushiSwap’s cross-chain support is a big plus.
• Token holders: If you own SUSHI, staking it gives you a cut of fees - and a voice in governance (even if that voice is small).

It’s not for you if:

• You want the lowest possible fees - go to Uniswap on Arbitrum instead.
• You’re risk-averse - impermanent loss and governance centralization are real concerns.
• You need fast, cheap swaps every day - stick to centralized exchanges.

How to Get Started on SushiSwap

Using SushiSwap is simple if you know the steps:

1. Get a Web3 wallet: MetaMask, Trust Wallet, or Coinbase Wallet.
2. Buy some ETH (for Ethereum) or BNB (for BNB Chain) to pay for gas.
3. Go to app.sushi.com and connect your wallet.
4. Choose your chain - Ethereum, Arbitrum, or BNB Chain. Start with Arbitrum for lower fees.
5. Swap tokens: Click "Swap," pick your tokens, enter amount, confirm.
6. Provide liquidity: Click "Liquidity," add equal value of two tokens, approve, confirm.
7. Stake SUSHI: Go to "SushiBar," stake your SUSHI to earn xSUSHI and fees.

Always double-check the token addresses. Scammers create fake SUSHI tokens with similar names. Only trust the official contract: 0x6b3595068778dd592e39a122f4f5a5cf09c90fe2 on Ethereum.

Is SushiSwap Safe?

SushiSwap’s code has been audited multiple times by firms like CertiK and Quantstamp. No major exploits have occurred since 2021. But safety isn’t just about code - it’s about trust.

Smart contracts are immutable. Once you send funds in, you can’t undo it. If you send ETH to the wrong address, it’s gone. If you approve a token spending limit and don’t revoke it, a hacker could drain your wallet later.

Also, the governance structure is a red flag. Only nine people control the project. If one of them gets hacked or goes rogue, the whole platform could be compromised. That’s why most experts recommend only using SushiSwap with money you’re willing to lose.

What’s Next for SushiSwap?

In 2025, SushiSwap is focused on three things:

• Improving cross-chain liquidity bridges
• Reducing reliance on SUSHI token incentives
• Building better tools for liquidity providers

They’ve added new features like SushiSwap V3 (a version with concentrated liquidity, like Uniswap V3), but adoption has been slow. The real test? Can they compete with Uniswap, Curve, and dYdX without burning through their treasury?

Right now, the total value locked (TVL) is around $400 million - down from $3 billion in 2021. That’s not booming, but it’s not dead either. The community still shows up. Developers still push updates. And the sushi theme? Still charming.

Final Verdict: Should You Use SushiSwap?

Yes - if you understand the risks and use it wisely.

SushiSwap isn’t the best DEX for every use case. But it’s one of the few that tried to make DeFi feel human. It’s not perfect. It’s not fully decentralized. It’s got baggage. But it’s still here, still growing, still giving people a way to trade without a bank.

If you’re new to DeFi, start small. Swap a little ETH for USDC. Try staking 10 SUSHI. See how it feels. Don’t dump your life savings into a liquidity pool. And always, always use a chain like Arbitrum instead of Ethereum for everyday trades.

At its core, SushiSwap is a reminder that crypto isn’t just about price charts. It’s about building systems where people control their money. It’s messy. It’s complicated. But it’s still worth trying.