In the current decentralized finance (DeFi) ecosystem, SUSHI token serves as an important player, attracting a large number of users and liquidity. SUSHI tokens are not only a medium of transaction, but also an important tool for users to participate in the growth and development of the platform. This article will delve into the charging mechanism, reward system of SUSHI tokens and its importance in the DeFi ecosystem.
Charging mechanism
The charging mechanism of the SUSHI platform is exquisitely designed to attract and retain users and liquidity. Every transaction conducted using the Sushi smart contract will charge a certain fee. These fees are divided into two parts: one part is used to reward liquidity providers (LPs), and the other part goes into Sushi’s treasury to support the continued growth of the platform. and other projects.
The specific charging details are as follows: 0.3% fee is charged for each transaction
0.25% of it is immediately distributed to liquidity providers as LP rewards
0.05% goes to Sushi’s treasury
It should be noted that originally this 0.05% fee was for users who staked $SUSHI for $xSUSHI, but according to the recently passed Kanpai 2.0 implementation plan, this part of the fee will be temporarily transferred to the treasury before December 2023.
reward system
The reward system of the SUSHI platform is designed to incentivize liquidity providers and encourage them to continue to provide liquidity to the platform. The total amount of these rewards is predetermined and distributed in equal amounts daily. The rewards available to liquidity providers are based solely on the number of SLP tokens they hold and their specific percentage in the liquidity pool.
For example, if a liquidity provider holds 3% of SLP tokens in the SUSHI/ETH liquidity pool, then he is entitled to 3% of the pool's daily SUSHI/ETH rewards. Such a reward system allows liquidity providers to earn considerable returns while maintaining active participation.
It is worth noting that the percentage in the liquidity pool is not fixed. If other users further increase liquidity, the original users' percentage of the pool will be diluted. This means that liquidity providers must keep an eye on market dynamics in order to adjust their liquidity provision strategies when necessary.
Funding sources for awards
The rewards for liquidity providers mainly come from transaction fees. In addition, many DeFi project teams will also provide additional subsidies in order to attract more liquidity. When users deposit their SLP tokens into the farm, they may find themselves able to earn two rewards – $SUSHI and another token. This second token is provided by the team responsible for the project, with Sushi providing all $SUSHI rewards. These “double reward” farms are called Onsen farms and further promote user participation.
MasterChef Contract
On the Ethereum mainnet, the management of all rewards is handled by the MasterChef v2 contract. This contract not only effectively distributes rewards, but also ensures that liquidity providers’ rewards are released in a timely manner. In addition, for each Sushi deployed on the L2 chain, there is also a dedicated MiniChef contract to handle the corresponding reward mechanism.
This design not only improves overall operating efficiency, but also ensures that users can get a consistent reward experience across multiple platforms.
Ecosystem of SUSHI Token: The success of SUSHI Token depends not only on its fee and reward mechanism, but also on the ecosystem behind it. As a decentralized exchange, SUSHI provides a diverse range of trading pairs and liquidity pools, allowing users to conduct flexible transactions according to their needs.
community driven governance
Holders of SUSHI tokens are not only users of the platform, but also participants in governance. People holding SUSHI tokens can participate in the decision-making process of the platform, making suggestions and voting on future development directions and policies. This community-driven governance model enables holders of SUSHI tokens to participate more deeply in the development of the platform and enhances user stickiness.
Cross-chain integration: With the development of DeFi, the application of cross-chain technology has become increasingly important. SUSHI Token actively explores integration with other blockchains, which not only expands its user base but also enhances its liquidity. Users can conduct transactions on different blockchains and enjoy lower handling fees and faster transaction speeds.
in conclusion
As an important part of the decentralized financial ecosystem, SUSHI token has attracted a large amount of liquidity and user participation with its complete fee and reward mechanism. As the platform continues to develop and innovate, the future of SUSHI tokens is filled with endless possibilities. Whether they are liquidity providers or ordinary users, they can find their place in this ecosystem and enjoy the convenience and benefits brought by decentralized finance.