Overview

Sushiswap is a decentralised exchange where users can exchange and borrow tokens and earn yield through staking, providing liquidity or lending.

Sushiswap operates as an automatic market maker (AMM), which is basically a method of facilitating trading without the need for a middleman to carry out the trade. Instead, automatic, permissionless trading on Sushi is powered by liquidity pools.

For a more in-depth overview of how all of this works, click here to read our simply explained article on Sushiswap.

This tutorial will go over how to swap and borrow on Sushi. We have a separate tutorial that goes through the ways you can earn yield on the platform (i.e. providing liquidity, staking and lending).

Tutorial

Connecting your wallet

Head to https://www.sushi.com/ and press ‘enter app’.

Next, click the ‘connect to a wallet’ button at the top of your screen. 

Sushi supports a number of different wallets; for this tutorial, we’ll be using MetaMask. If you don’t already have a Metamask wallet, click here for a full beginner’s tutorial on how to set up and use the browser extension version of MetaMask.

Once you select MetaMask from the above list, you will be prompted to approve the connection to Sushiswap.

Although MetaMask is an Ethereum-based wallet, it can be used across a wide range of other blockchain networks. To switch to another network, simply click on the network icon at the top of the screen and select the network you would like to use in the pop-up screen that appears.

You will then be asked to approve the switch to this network. If this is your first time using MetaMask with the network you have selected, you’ll also have to grant permission to add the network.

Although your wallet’s address remains the same across all networks, any assets in your wallet on the Ethereum Mainnet do not directly transfer over to these networks.

The process of transferring tokens will vary slightly depending on the network you are using. However, generally speaking, this often involves using a bridging service (e.g. Arbitrum Bridge: https://bridge.arbitrum.io/or Polygon bridge https://wallet.polygon.technology/bridge/ . The bridging process is pretty simple, but you can check out our Uniswap tutorial for an example.

Swapping

Exchanging tokens is very straightforward on Sushi. At the top left of your screen, click on ‘trade’ followed by ‘swap’.

Next, select the token you want to swap and the token you want to swap it into. Once you enter the amount you want to swap, the corresponding amount of the token you can expect to receive in exchange will be displayed.

Below this, you’ll see the estimated exchange rate. By clicking on the arrow next to the exchange rate, you’ll be able to see more details of the transaction. This includes the minimum amount of tokens you can expect to receive from the swap and the price impact your swap will have on the liquidity pool. Note that there is a 0.30% percentage liquidity provider fee on all swaps.

When you click on the settings gear icon, the following pop up screen will appear.

Here you can set a specific slippage tolerance. Because we’re using a decentralised exchange that is influenced by supply and demand, the price of the swap can vary slightly from the time you begin the transaction to the time it is processed. The slippage tolerance is used to represent the level of price fluctuation you are okay with. Uniswap will auto-generate a slippage tolerance rate for you, and most people tend to stick with that.

There’s also the option to enable ‘expert mode’. If you turn this on, you won’t have to confirm transactions with your MetaMask wallet.

To process the transaction, click confirm swap and approve the transaction in your wallet. Note that you will have to pay a gas (transaction) fee, which will vary depending on the network you’re using.

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Borrowing

The borrowing feature on Sushi enables users to gain access to liquidity (i.e. an asset) and diversify their portfolio without having to actually buy the asset.  

To get started, click the ‘lending’ tab, followed by ‘borrow’. Note that at the time of writing this tutorial, borrowing is not currently available on every chain supported by Sushi.

You can use the search bar to look for the money market of the asset you want to borrow. You have two asset icons displayed for each market. The icon on the left will be the asset you are borrowing, and the icon to the right is the asset that you will need to provide as collateral. The ‘borrowed’ value represents the percentage of the pool currently being lent out. You can also see the APR (i.e., the annual interest rate you will have to pay).

Once you click on a market, you’ll be brought to a page that looks like this:.

Your borrowing limit will depend on the amount of collateral you provide. Sushi’s Loan-to-Value or LTV ratio is 75%. This essentially means that you will be able to borrow up to 75% of your collateral.

Once you have decided on the amount of collateral you want to provide and the amount you want to borrow, click ‘approve’ and confirm the transaction in your wallet (and pay the associated gas fees).

You can withdraw your collateral and repay your loan at any time by clicking on the ‘repay’ tab on the same page.

Disclaimer: NOT FINANCIAL NOR INVESTMENT ADVICE. Only you are responsible for any capital-related decisions you make, and only you are accountable for the results.

Comment and share if you found this tutorial useful! For more on decentralised exchanges, check out our Uniswap article and tutorial.