Decentralized Crypto Exchange Sushi Swap To Divert Users’ Funds
Developers of DeFi exchange Sushi Swap propose to divert 100% of users’ funds in trading fees into its treasury. Following the proposal, Sushi’s native token, SUSHI, fell by 1.5% to $1.23.
Key Takeaways
Decentralized exchange Sushi developers propose to divert fees from users trading fees into its multisig wallet.
The proposal seeks to give Sushi a more extended runway of over a year amidst threatening expenditure problems.
In the issued statement, the developer refers to the proposal as a “temporary solution to a long-term problem.”
What Developers Proposal Means
The proposal tagged “Kanpai,” according to the statement issued, is set to convert trading fees belonging to users into the DeFi protocol multisig treasury wallet.
Head Chief of the protocol Jared Grey calls this deficit threatening, saying a “significant deficit in the treasury threatens Sushi’s operational viability, requiring an immediate remedy.”
The decision comes after realizing the current annual spending of Sushi is between $5–9 million, limiting the brand’s survival chance to just 18 months. If the proposal is accepted and implemented will give Sushi a longer runway of about 12 months or until it launches its new token distribution and reward scheme on its roadmap. The announcement came with a fall in Sushi’s native token, SUSHI’s price, by 1.5% to $1.23.
A Longterm Approach For Winning
The proposal is said to be a temporary solution to a long-term problem, developers say. And to address the long-term value proposition, a new tokenomics on its horizon will serve as the hotfix – a process that might be delayed and not the perfect option.
“Sushi must implement a holistic token model that allows the rebuilding of the Treasury and delivers value for all stakeholders,” the developer added.
Sushi currently relies on partnerships as a part of its business model and has increased funding after securing partnership deals worth millions of dollars. However, Gray warned against it, saying it’s just a “part of a successful business model to secure Sushi’s future,” not providing any guarantee.
Bottom Line
Sushi sees this as a chance to regain market share and stance in the chaotic bear market environment filled with staff layoffs and bankruptcy after falling behind competitors, including Uniswap and Curve. Being the Sixth largest DeFi exchange and with plans to lead, Gray employs stakeholders to “seize the opportunity to secure the future of Sushi by acting in its best interests together,” regardless of the current market cycle.
