When users make trades on the SushiSwap Exchange a 0.3% fee is charged.
0.05% of this fee is added to the SushiBar pool in the form of LP tokens for the relative pool.
When the rewards contract is called (minimum once per day) all the LP tokens are sold for Sushi (on SushiSwap Exchange). The newly purchased Sushi is then divided up proportionally between the xSushi holders in the pool, meaning their xSushi is now worth more Sushi.
It started as 1 Sushi = 1 xSushi, but just like LP tokens, the price of xSushi changes over time depending on how many Sushi rewards are in the pool.
If you want to have an idea of the current APY, you can check out https://analytics.sushi.com/bar
The Sushibar is accessible on our main UI via https://exchange.sushi.com/#/stake