An automated maker market is a type of decentralized exchange, offering liquidity to the platform through which it operates. These automated markets (AMMs) have become all the buzz over the past year.
Why? Because they represent an alternative to traditional exchange-listing processes and limit-order books through algorithm-powered permissionless liquidity pools. AMMs come with notable pros and cons.
One such example is the AMM protocol SakeSwap, which provides more efficient incentive mechanisms coupled with trading slippage capture. Recently, Sushiswap devoured 80 percent of Uniswap’s liquidity.
How did this happen? Through yield farming of the SUSHI token. To address critical issues with Uniswap and Sushiswap, SakeSwap was born.
Keep reading our SakeSwap review for a full breakdown of why this is a company to watch.
What Is SakeSwap?
If you have any familiarity with SUSHI, then the concept of SAKE will prove a cinch for you. After all, both SUSHI and SAKE are very similar. How did SAKE come about?
Following the impressive success of SUSHI, many copies hit the market, promising an equivalent or even better version of the AMM via their decentralized exchange (DEX). Could these companies deliver? Not so much.
The SAKE team has created an AMM boasting better fee capture for liquidity providers (LPs). Sounds good, right?
How has the Asia-based team achieved this? By following in the footsteps of Mooniswap. After all, Mooniswap was the first platform to really tackle how to capture more value for LPs.
In other words, for the same trading volume, you can now earn higher LP fees on Sakeswap than SushiSwap. Of course, this assumes all other factors are equal.
The Sakeswap team’s AMM would prove similar to SushiSwap. How? It would migrate LP tokens to its new exchange. Of course, this represents a risky endeavor.
For this reason, yield farmers must be aware of associated risks. And if the anxiety is a bit too much to handle? They should unstake their LP tokens before migration to circumvent these risks altogether.
How to Purchase SAKE
If SakeSwap’s AMM sounds like the place you’d like to be, you’ll need to start by purchasing SAKE.
Where’s the best place to do this? At the moment, Uniswap remains the highest liquidity pool. That said, how you acquire SAKE will depend on the currency you’d like to use.
For example, if you have Ethereum (ETH) in a Web3 wallet such as MetaMask, the process is a breeze. Just head to Uniswap and convert your ETH into SAKE. It doesn’t get much simpler than that. Find out more about crypto wallets.
What if you’re starting with Bitcoin or another non-ETH token? Head to a crypto exchange platform like Binance to convert these assets into ETH. From there, you can make the conversion at Uniswap.
If you’re starting with a fiat currency, you’ll need to use it to buy ETH through Coinbase before navigating to Uniswap. And if you’ve hot cryptocurrency assets held in a non-ETH token like LEND, SNX, YFI, or LINK, you can convert these into ETH at 1inch.
We hope that 1inch will eventually integrate SAKE natively. If and when this happens, you’ll be able to cut out the need for a middleman and handle everything solely 1inch.
What to Know About Farming SAKE
Since SAKE’s launch, many users are farming it instead of buying it through an exchange. This approach lets you earn SAKE without spending ETH, but how does the process work? Let’s take a closer look.
Before you dive into any form of yield farming, you must realize there’s a delicate balance between the highest rewards and inherent risks resulting from impermanent loss. This observation proves no less true when it comes to the SAKE-ETH pool.
You should fully understand this rick before starting to farm in this pool. That said, if you feel comfortable with the risk, use the instructions above to acquire your first SAKE. From there, you can become an LP in the pool.
SAKE farm comes with the choice of many exchange pairs. While this wide selection reduces the APY for farmers, it also provides them with more options. When farming SAKE, compare the yields to SUSHI, too. That way, you’ll be guaranteed the highest profitability.
What’s one fascinating thing to know about SAKE farming? It started with a five-day “beta” period featuring 0.5x rewards. Since this time, rewards have increased to 10x, representing a dramatic increase in returns and APY.
For this reason, we recommend always keeping your eye on changes in the pools while farming SAKE. What’s the best way to do this? You can join their Discord account to stay abreast of current events and fluctuations.
SakeSwap vs SushiSwap
At this point, you have a much better understanding of what SakeSwap is and why you might wish to farm SAKE. But you may also have questions. For example, what’s the difference between the AMM SushiSWap and SakeSwap?
As already mentioned, there are far more similarities than differences between SakeSwap and SushiSwap. SushiSwap paved the way for the DeFi fork SakeSwap. As a result, SakeSwap relies on elements from both SushiSwap and Uniswap in its staking pools.
That said, APYs will differ for those staking LP tokens. And volatility remains the name of the game. After all, it wasn’t that long ago that NomiChef, SUSHI’s lead developer, effectively tanked the token by selling all of his tokens in one shot.
Changes have occurred since this time, including a derivatives contract implemented by FTX CEO Sam Bankman-Fried. And these lessons have been carried over into SakeSwap. That said, you’ll want to keep a close eye on pools when farming. You’ll also want to regularly check APY differences between SAKE and SUSHI to get the highest yields.
You should also be aware that there are many alternatives to SakeSwap, SushiSwap, and Uniswap. They include 1inch and Mooniswap. Of course, this barely scratches the surface when it comes AMMs.
Spend some time familiarizing yourself with each platform before making a decision on the best one to meet your farming ambitions. Are you looking for other ways to generate revenue with digital currencies? Check out our list of the best crypto affiliate programs in 2021.