On July 21, SushiSwap launched its crosschain DEX (decentralized exchange) XSwap. The protocol called the new feature the “first-ever” automated market maker (AMM) exchange enabling cross-chain swaps.
SushiSwap (SUSHI) is trying to reverse its declining market share by enabling cross-chain swaps across seven major blockchains. According to an official blog post, XSwap allows traders to swap assets across Sushi’s deployments on Ethereum, Optimism, Arbitrum, Fantom, Binance Chain, Avalanche, and Polygon. Sushi said the feature would support additional chains in the future, and the protocol is live on 14 different chains.
Automated market makers (AMMs) are the underlying protocols powering decentralized exchanges by allowing assets to be traded against a liquidity pool rather than using a traditional order book of buyers and sellers.
The new feature is based on the Stargate cross-chain liquidity protocol from Layer0, a Web3 development team. The protocol allows Sushi to find the cheapest routing for transactions across its supported chains.
SushiSwap is an Ethereum-based decentralized exchange that lets you swap a vast array of tokens, as well as engage in other financial services. It has no centralized authority or middlemen. Instead, it relies on smart contracts – or code that automates processes – and liquidity provided by other users to complete trades. SushiSwap is similar to Uniswap, which also runs on Ethereum, as well as the Binance Smart Chain-based PancakeSwap.
As of May, trading volume on decentralized exchanges (DEXs) amounted to $91.3 billion. Uniswap continues to dominate the non-custodial exchange market, accounting for 61.1% of total turnover. The second DEX by trading volume is Curve (21.4%), followed by Balancer (6.5%) and SushiSwap (5.1%).
According to DeFi Llama, SushiSwap has a total value locked (TVL) of $919 million and ranks as the fifth-largest decentralized exchange by cross-chain TVL. Meanwhile, leading DEXes Curve and Uniswap command $6 billion and $5.8 billion, respectively.