SushiSwap: ecosystem taxation with Sushi, xSUSHI and Trident

SushiSwap was born in 2020 as a fork of Uniswap v2 with the novelty of distributing a part of the trading fees to the holders of the SUSHI token. Over the years it has evolved into multiple DeFi products with their own tax implications.

The story of the vampire attack and the LP migration

SushiSwap started by migrating liquidity from Uniswap. If you were a Uniswap LP in 2020 and migrated your LP tokens to SushiSwap:

• Migration: may have been executed as Uniswap withdrawal + Sushi deposit → two tax events.
• The exchange rate in EUR at any given time determines the possible GPOs.

SUSHI: the ecosystem token

SUSHI is the governance token of the protocol. SUSHI Sources:

• Liquidity farming emissions: you receive SUSHI for providing LP on SushiSwap.
• Fee distribution: 0.05% of trading fees go to the xSUSHI pool.

SUSHI taxation received:

• By farming → return on movable capital.
• By airdrop or specific reward → General base GPO.
• For subsequent sale of SUSHI → GPO savings base.

xSUSHI: token staking

The unique Sushi model: you can stake SUSHI on SushiBar to receive xSUSHI, which automatically accumulates 0.05% of all trading fees.

xSUSHI Taxation:

• SUSHI → xSUSHI: possible transmission of SUSHI (SUSHI GPO).
• The fees accumulated in xSUSHI are implicit in the xSUSHI/SUSHI exchange rate (similar to Compound cTokens).
• When withdrawing xSUSHI → SUSHI: difference between SUSHI received and SUSHI deposited = return on capital.

Farming on SushiSwap (MasterChef)

SushiSwap uses the "MasterChef" contract to distribute SUSHI to the LPs in its pools:

• You deposit LP tokens in MasterChef → you receive SUSHI periodically.
• Each SUSHI claim = date of receipt + value in EUR → movable capital.

The complexity: SushiSwap operates on 20+ blockchains, so registrations must be made per chain.

Trident AMM and Concentrated Liquidity

SushiSwap v3 introduced "Trident" with concentrated liquidity (similar to Uniswap v3):

• LPs create positions in specific price ranges.
• Fees are distributed only when the price is in the range.
• As in Uniswap v3, each position is a unique NFT.

Taxation: Same as Uniswap v3 (see specific article). The NFT position is the asset, and the fees are accumulated or claimed.

Kashi Lending (deprecated)

SushiSwap had a lending protocol called Kashi (no longer active):

• Users who deposited into Kashi and did not withdraw before the closure may incur losses.
• The official protocol announced its deprecation → pending losses are capital losses if the funds are not recoverable.

The saga of Sushi hacks

SushiSwap has suffered several exploits (e.g. RouterProcessor2 in 2023, which resulted in losses of ~$3.3M for some users):

• If you lost funds in a Sushi hack → deductible capital loss.
• Documents the hash of the exploit transaction and the hacker's address.

Multi-string: the registry problem

If you have used Sushi on Ethereum, Arbitrum, Polygon, BNB Chain, Fantom, etc.:

• Each chain has its own transaction history.
• Tools like Koinly support multi-chain import of Sushi.
• The challenge: the same LP token on different chains has different contracts.

SushiSwap Tax Summary

Updated: April 2026 | Fiscal year: 2025