SushiSwap, an automated market-making (AMM) decentralized exchange (DEX) by total value locked, has expanded to Avalanche, offering users another trading venue in Avalanche’s rapidly growing decentralized finance (DeFi) ecosystem. Users can perform core swaps as they do with SushiSwap on Ethereum, but with lower fees and faster transaction finality.
Since the launch of the Avalanche-Ethereum Bridge (AEB) on Feb. 8, smart contract activity on Avalanche has boomed, with transactions increasing to more than 626,000, and unique wallets increasing to more than 39,000.
Avalanche enables DeFi apps to scale and perform at parity to traditional finance applications. Transaction fees are also just a fraction of the cost. For traders and users of AMMs like SushiSwap, this means better margins, and more time focused on strategy, rather than execution.
Launched in August 2020, SushiSwap is the biggest DEX in DeFi by TVL (total value locked) with more than $4.5 billion on its platform, according to DeFi Pulse.
This growth is poised to continue and even accelerate. At the time of writing, the average gas fee required for an Ethereum transaction (to be settled in less than two minutes) is ~220gwei in terms of ETH (~$20 US)*. These costs also spike higher as the network becomes more congested with high levels of activity, as we’ve seen throughout the DeFi boom, with gas fees costing users hundreds of dollars.
Avalanche solves this problem today, with more enhancements on the way to how the platform handles transaction fees for smart contracts. Smart contract transactions are just a fraction of the cost (~$0.70 US)*.
In the last three weeks, the total value locked within Avalanche-based AMMs has grown from $102 million to $275 million. Avalanche is continuing to integrate more applications and tools to help improve the user experience for its DeFi users.
AMMs provide users and projects with instant liquidity at a known price. This consistency becomes invaluable for projects looking to scale fast. Instant, efficiently priced liquidity allows for more complex DeFi products to emerge.
With more AMMs like SushiSwap looking to benefit from the high performance of Avalanche, the wider DeFi ecosystem will increasingly take notice.
“We look forward to our deployment of Sushi on Avalanche as an important step towards TVL, liquidity, and volume expansion,” said Joseph Delong, CTO of SushiSwap.
*Price was calculated using a contract approval function on each network. More complex contract calls will increase gas fees.
