SushiSwap is about to provide DeFi devotees with a reason to use Avalanche.
Because of the high demand for decentralized finance (DeFi) products, the network became very congested. As a result, transaction fees are rising.
It is against the background that Avalanche welcomes decentralized exchange (DEX) SushiSwap to its network. Ava Labs developers think that bringing the biggest decentralized exchange by value locked on Ethereum can help Avalanche grow its DeFi offering and challenge Ethereum.
Early this year, developers launched a bridge to Ethereum, which means that DeFi assets like Chainlink, Aave, and Wrapped Bitcoin are now on the network. This is basically the next step.
Decentralized Finance is the term for blockchain-based financial products without the middleman. It encompasses things like loans, interest-bearing accounts, and derivatives trading that happen on a distributed network.
DEX (decentralized exchanges) are a type of DeFi product; they enable people to trade many types of cryptocurrencies. Unlike a centralized exchange such as Coinbase or Binance, decentralized exchanges don’t take custody of users’ coins. Alternatively, they use smart contracts to facilitate peer-to-peer trading. They prioritize security and privacy above ease of use.
But to get on a DEX like SushiSwap and start trading tokens, users normally first need Ethereum, the common currency of DeFi protocols built on the Ethereum blockchain. Now, they’ll be using the AVAX token for their fees and transactions. That can be a boost for the liquidity of the network and the value of the AVAX token.
But he suggested that the intent is not to bleed off users from Ethereum but to tap into new user segments.
SushiSwap’s creation on Avalanche is really a step toward that. SushiSwap began as a clone of Uniswap but it has since evolved and grown to surpass the decentralized exchange in terms of TVL into the platform.
Users are not basically swapping Ethereum for Avalanche yet; the new DEC didn’t have a launch date.
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