SushiSwap (SUSHI) is the native token of the SushiSwap decentralized exchange, a trading platform that allows users to swap any Ethereum-based token for another without the need for an order book or counterparty.

The SushiSwap protocol is designed to be fully decentralized, using a trading model known as an automated liquidity protocol. This method rewards users who provide their own assets as liquidity into a pool others use to trade.

Users who stake their SUSHI (deposit tokens into the protocol’s staking smart contract) receive a reward for every block confirmed on the blockchain, with the total rewards per block decreasing over time. Additionally, 10% of SUSHI rewarded is given to a multisig-controlled developer fund. SushiSwap initially began supplying 1,000 SUSHI per block for staking in liquidity pools. As the tokens continue to be rewarded, the amount of SUSHI given to staking participants will eventually decrease to 0 when the hard cap of 250 million SUSHI is reached, which is expected to be in November 2023.

SUSHI hit an all-time low of $0.4737 in early November 2020 in the aftermath of a liquidation of $14 million in SUSHI and disappearance of the project’s lead developer, Chef Nomi. At the time of the disappearance, SUSHI dropped 73% within the first couple hours and continued to decline following rumors that SushiSwap was a “rug pull.” A week later, Nomi said he’d made a mistake and returned all the funds.

SUSHI hit an all-time high of $23.38 in March 2021 following China’s crypto ban and a high period in the general crypto market. As crypto traders in China looked to trade cryptocurrency in the light of an expected ban on crypto exchanges, users moved into decentralized finance (DeFi) exchanges, causing a spike in activity on the SushiSwap network.

SushiSwap is an open-source, decentralized exchange (DEX) on the Ethereum blockchain that was initially launched as a copy (or fork) of another DEX, Uniswap. The SushiSwap exchange uses an automated market maker (AMM) protocol, meaning it doesn’t need an order book in order to operate. Instead, SushiSwap uses liquidity pools and smart contracts to execute trades without a centralized authority. Liquidity pools are tokens stored by other users, who stake their tokens in return for rewards.

SUSHI holders are able to participate in SushiSwap’s on-chain governance and receive a portion of fees from user transactions.

In addition to its decentralized exchange and liquidity pools, SushiSwap also offers several other features including yield farming and lending. For example, SushiSwap features BentoBox, which offers token vaults that generate yield. With the creation of BentoBox, SushiSwap was able to launch The SushiBar: a yield farming and staking service that lets users gain xSUSHI tokens that appreciate in value from fees on the platform.

SushiSwap was launched on Aug. 28, 2020, by two pseudonymous users, Chef Nomi and 0xMaki. The project was launched as a fork of Uniswap, but added liquidity mining and a governance protocol via its SUSHI token. Although initially launched as an independent project, it was quickly acquired by Andre Cronje’s Yearn Finance (YFI) to utilize Sushi’s automated market maker system.

SushiSwap quickly rose to popularity with over $1.2 billion locked within its first week of launch. Just a week and a half after the launch of SushiSwap, however, Chef Nomi sold all of SushiSwap development fund tokens for 37,400 ether (ETH) (about $14 million), immediately dropping the token’s price 73% from $4.44 to $1.20. In his sudden departure from the DeFi protocol, Chef Nomi additionally transferred control over the platform to SushiSwap investor and FTX CEO Sam Bankman-Fried.

In the fallout of what appeared to be a “rug pull,” 0xMaki told CoinDesk that he was incredibly disappointed in Chef Nomi’s action and dispelled rumors alleging Bankman-Fried was the other pseudonymous co-founder. Shortly after the interview, Chef Nomi returned to SushiSwap, apologizing for his actions and returning the $14 million in ETH to the SushiSwap treasury.

In the following year, 0xMaki maintained his position as a co-contributor and de facto CEO of SushiSwap until they announced their departure and stepped back into an advisory role in September 2021. Although it appeared that 0xMaki had left on his own terms, an anonymous Twitter user tweeted screenshots of an internal SushiSwap telegram chat showing Chief Technical Officer Joseph Delong had, in fact, pushed 0xMaki into the advisory role. Later that month, it was uncovered that the anonymous Twitter user was SushiSwap Asia lead “AG” who was subsequently fired for the series of Tweets.

Further tensions, misspending and internal arguments with Delong and other core members began to circulate throughout 2021, prompting AG to come forward and claim the internal struggles was causing SushiSwap to fail. On Dec. 6, Delong threatened to leave his position as CTO over concerns the SushiSwap core team lacked sufficient compensation and autonomy. To correct compensation concerns, Delong proposed a one-time payout of 200K SUSHI (about $964,000) to each core team developer, totaling $18.3 million. Two-thirds of voting participants disapproved of the proposal and Delong resigned two days later.