Sushi Bar is a feature of Sushi that allows users to stake their SUSHI tokens in exchange for xSUSHI, representing their share in the Sushi Bar. As an xSUSHI holder, you are entitled to a share of the platform's trading fees, specifically 0.05% of the 0.3% standard trade fees on the Sushi v2 AMM. In short, it is a revenue-sharing model for SUSHI holders.
Although fee accumulation was temporarily halted due to the Kanpai 2.0 proposal, it's now revived, which is why the Sushi Bar is back in action.
Check out the tutorial here or see the video tutorial below.
2. What is xSUSHI and how does it work in Sushi Bar?
xSUSHI represents staked $SUSHI tokens in the Sushi Bar. When users stake SUSHI tokens, they receive $xSUSHI, which not only accumulates value over time as the platform collects fees but also entitles them to a share of those fees collected.
xSUSHI, representing staked SUSHI tokens in the Sushi Bar, serves two main purposes.
Value Accumulation: Its value increases as the Sushi platform earns trading fees, a portion of which is distributed to xSUSHI holders, enhancing its worth over the original SUSHI.
Revenue Sharing: Holding xSUSHI entitles users to a share of these fees, with the value rising as the platform's activity grows.
xSUSHI also enables holders to participate in governance decisions, integrating financial benefits with a role in the platform's community-driven direction.
3. How does staking in the Sushi Bar work?
To stake your SUSHI tokens, access the [Stake] tab on Sushi, enter the amount of SUSHI you want to stake, and approve the spending limit before staking. Your SUSHI tokens will be converted into xSUSHI, representing your staked amount and your share of the protocol fee earnings.
4. How does the revenue sharing work in the Sushi Bar?
In Sushi v2, a 0.3% trading fee is charged on each transaction. Of this fee, 0.25% is allocated to liquidity providers (LPs) as a reward for supplying liquidity, and the remaining 0.05% goes to the Sushi Bar for revenue sharing among xSUSHI holders. This 0.05% fee from each pool is used to buy back SUSHI on the open market. The purchased SUSHI is then distributed to xSUSHI holders, proportionate to their stake in the Sushi Bar. This system ensures a continuous cycle of reward distribution and value return to xSUSHI holders.
5. How does the $SUSHI/$xSUSHI exchange rate work?
The SUSHI/xSUSHI exchange rate is determined by the value of each token and the earnings accrued from the platform's trading fees. For instance, if 1 SUSHI is valued at $1.03, it could equate to 0.7376 xSUSHI, also valued at $1.03. Like the example below, if you stake 5 SUSHI, you will get 3.6 xSUSHI back. This rate indicates that xSUSHI has gained additional value from the trading fees collected by the platform.
See below for more detailed explanation:
As xSUSHI earns a portion of the platform's trading fees, its value increases over time. Consequently, more SUSHI will be required to acquire the same amount of xSUSHI in the future than at present.
When you unstake XSUSHI, the returned amount of SUSHI is generally greater than the amount initially staked. This increase is due to the additional value your xSUSHI has accumulated while staked, attributed to its share of the trading fees. Therefore, the longer your SUSHI is staked and converted into xSUSHI, the more value it gathers, leading to a higher return in SUSHI when you decide to unstake.
6. Why are the prices of SUSHI and xSUSHI different?
The price difference between SUSHI and xSUSHI results from their distinct roles. When you stake your SUSHI tokens in the Sushi Bar, you receive xSUSHI in return, based on a specific exchange rate. xSUSHI is a yield-bearing token, which means its value increases over time as it accumulates a share of the trading fees generated by the platform.
This accumulation of fees makes each xSUSHI token more valuable compared to SUSHI. As a result, the amount of SUSHI you can get back when you unstake xSUSHI is typically more than what you initially staked. This is because xSUSHI appreciates in value over time, reflecting the accumulated fees and making it more expensive to acquire as time progresses. In essence, the constant value growth of xSUSHI, driven by fee accumulation, leads to a price difference between SUSHI and xSUSHI tokens.
7. What are the benefits of staking SUSHI for xSUSHI?
By staking SUSHI for xSUSHI, you earn a share of the protocol trading fees generated on the Sushi platform. This sustainable reward is generated based on the trading volume and is a loyalty reward for token holders. The current distribution rate is an APY of around x%.
As a liquidity provider providing liquidity and farming SUSHI rewards previously, this also serves as a multiplier for your SUSHI rewards.
Additionally, you gain voting power in the platform's governance, known as SushiPowah. The more xSUSHI you hold, the greater your voting power becomes. This system enables active participation in governance proposals, with successful proposals requiring a minimum of 5 million SushiPowah to pass. Your involvement as an xSUSHI holder is crucial, allowing you to directly influence the platform's direction and contribute to its evolution as a decentralized, community-driven ecosystem.
8. How do I unstake my SUSHI from the Sushi Bar?
To unstake, go to the same staking tab where you staked your SUSHI. There, you can choose to unstake your xSUSHI, which will be converted back into SUSHI tokens.
9. What was Kanpai 2.0, and how has it impacted the Sushi Bar?
Kanpai 2.0 was a temporary initiative implemented during the 2022 bear market to support the Sushi DAO by directing 100% of xSushi protocol fees towards it. As of January 23rd, this initiative has expired, and the Sushi Bar has returned to its original xSushi model.
10. What changes with the expiration of Kanpai 2.0?
With the expiration of Kanpai 2.0, the Sushi Bar has reverted to its original model. This means xSushi holders now earn a share of the Sushi DEX’s trading fees again, as initially intended. Since Kanpai 2.0, Sushi has extended swap on 30+ chains, increasing the protocol fee earnings potential and staking APR %.
11. What tokens do I earn from staking in the Sushi Bar?
When you stake in the Sushi Bar, you earn SUSHI tokens. This is because the 0.05% fee collected from each trading pool on Sushi v2 is used to buy back SUSHI from the open market. The SUSHI thus purchased is then distributed to xSUSHI holders in proportion to their stake in the Sushi Bar. This process ensures that your earnings from staking are paid out in SUSHI tokens.
12. What happens if I lose my xSUSHI?
xSUSHI represents your staked SUSHI and your share of the earnings in the Sushi Bar. If you lose your xSUSHI due to accidentally transferring it or a protocol hack, you unfortunately lose your stake in the Sushi Bar and the associated earnings. It's crucial to manage and store your xSUSHI; lost xSUSHI cannot be recovered and you won't be able to claim back your original SUSHI without it. Always ensure the safety and security of your xSUSHI to maintain your stake and continue earning yields from the Sushi Bar.
13. Is there a risk to staking in the Sushi Bar?
As with any DeFi platform, there are inherent risks, including smart contract risks and market volatility. It’s important to do your own research and consider your risk tolerance before staking.
14. Can I stake SUSHI from any blockchain?
Sushi Bar primarily operates on the Ethereum blockchain, so you’ll need to have your SUSHI tokens on Ethereum to stake in the Sushi Bar.
15. Does the length of time I stake SUSHI affect the rewards I receive?
No, the rewards are not directly influenced by the duration of your stake. Whether you stake your SUSHI today or just before the next distribution, your rewards will be proportional to the amount of SUSHI you have staked at the time of distribution.
16. Is there a long-term benefit to staking SUSHI early in the Sushi Bar?
Yes, in the medium to long term, staking SUSHI early can be more beneficial. Early stakers can participate in more distribution events and might benefit from more favorable exchange rates over time. While immediate rewards might not differ greatly between early and later staking, the cumulative benefit over time can be significant for those who stake early.
17. If I stake my tokens today, will I receive rewards based on the current APR, or will the rewards be based on the APR at the time of distribution in the Sushi Bar?
If you stake in the Sushi Bar today, you will be eligible for rewards - trading fees accumulated until the next distribution, as well as the current APR. This means that even though the APR might be low now, early stakers will benefit from any future increases in the APR due to the accumulation of trading fees.
As the platform continues to collect more fees over time, the APR is expected to potentially rise. It's important to remember that the APR in DeFi platforms can vary due to factors like trading volumes and market conditions. Therefore, by staking early, you are positioning yourself for future gains as the platform's fee accumulation increases and the APR rises.
18. What determines the APR in the Sushi Bar?
Two key factors determine the Annual Percentage Rate (APR) in the Sushi Bar:
Trading Fee Collection: The primary contributor, where a portion of the trading fees from the platform is allocated to the Sushi Bar.
Volume of Staked SUSHI: The more SUSHI that is staked, the more the rewards are distributed across these tokens, impacting individual APRs.
Other factors include market conditions influencing trading volume, buybacks, and more.
19. When will the first distribution from the Sushi Bar be after the Kanpai 2.0 expiration?
The first distribution of trading fee earnings to xSUSHI holders in the Sushi Bar, following the expiration of Kanpai 2.0, is expected to be scheduled a few weeks after January 23, 2024. Starting from this date, the 0.05% fee will begin to be allocated to the Sushi Bar. This period allows for the accumulation of the 0.05% trading fees from Sushi v2 trades, which will be used to buy back SUSHI tokens for distribution. Keep an eye on official Sushi channels, such as on Discord or Twitter, for the latest updates and announcements regarding the distribution schedule.
20. How often is the distribution?
In the Sushi Bar, the distribution of rewards to xSUSHI holders does not follow a fixed schedule. This approach is intentional to prevent predictability and gaming of the system. By making the distribution events random, it ensures a fairer and more secure process for all participants. This strategy helps maintain the integrity of the reward system within the Sushi ecosystem.
21. Where can I learn more about Sushi Bar?
For more information, please feel free to reach out on Discord or Twitter.
