Introduction to Sushiswap Limit Swap Orders

In the cryptocurrency world, Automated Market Makers (AMMs) typically only settle orders at the market price, which is a major limitation compared to order book-based exchanges. However, SushiSwap addresses this critical point of AMMs with the launch of the limit order feature launched in October 2020.

In fact, more recently, SushiSwap decided to upgrade the system with Limit Order v2, which enhances the functionality of the legacy limit order by increasing capital efficiency, reducing the need for reliance and improving the overall effectiveness of the limit order function. One of the other nice things about Sushiswap's Limit Order is that Sushi's limit order function is decentralised and untrusted, meaning that there is not necessarily one specific agency fulfilling limit orders, but rather many different, autonomous entities. This differs from placing limit orders on the centralised exchanges Binance and Kraken, where when a limit order is placed on a centralised platform, these agencies determine for themselves how they want to fill limit orders.

How do SushiSwap limit orders work? Limit orders on SushiSwap work in a completely decentralised manner, without the need for any centralised authority as mentioned above. The system consists of two contracts: OrderBook and Settlement. On the one hand, OrderBook stores the limit orders that users have submitted. Anyone can call up and create a limit order with a quantity to sell and a minimum price. On the other hand, Settlement takes care of exchanging tokens for orders. Anyone can call up and fill an order taken from OrderBook.

More information about Limit Order can be extracted from the Sushiswap official docs here: https://docs.sushi.com/products/limit-order-v2

In this dashboard, we are gonna analyze how popular is the limit order functionality in sushiswap, calculating how many users have used it so far by placing limit orders and taking into account the number of limit orders that have been placed in comparison to the total number of transactions.

Methodology

To track the Limit Swap Order function usability, I have carrried out to main analysis: an analysis of the usage over time, as well as a global analysis about some statistics to get complete metrics tha tmay use to obtain some important info about the the functionality and the number of unque wallets that are using it.

To get the corresponding information, I have taken a look at the Ethereum dex_swaps table filtered by Sushiswap platform, and I have taken a look as well at the Ethereum udm_events table. The second one filtered by events name like 'limit order' as well as platform like 'sushiswap'.

The first table will get as the total number of transactions done in Sushiswap, while the second one the total number of limit orders done in Sushiswap. Then, we will compare both numbers over time and in a global manner.

Results

As a results, we can see how among the 15k DEX swaps, only 15 are limit orders. However, going deeper, it seems like the difference between total swaps and limit orders depends on th timeframe we study. During the beginning and during the final of the study, the amount of limit orders have increased not only in numbers but only with respect to total swaps. If we take a look at the last chart about the ratio of limit orders, there are more during June 2021 to August 2021 and January 2022 to March 2022. However, within August 2021 to December 2021, the number and ratio decreased a lot.

For the daily users who put limit orders, the situation is similar as the previous analysis in terms of number of limit orders. The best moments are at the initials and finals of the period analyzed.

Finally, taking a lookg at the global numbers, we can see how from the total of 3.78M of swaps done so far, only 1356 are related to limit orders. This is an average ratio of 358mu.

However, from the total Sushiswaplp users, almost 25% of them have placed some limit order.

Conclusion

In this dashboard we have seen one of the main functions on Sushiswap, which are the limit orders. This is a characteristic not totally explored for the users, so the usabiility is low for what it pretends. I think more marketing could be maid for this funciton in order to propagate the growth in terms not only of number of limit orders but number of users using it.