Decentralized exchange SushiSwap’s treasury has less than 1.5 years of runway left, according to a Dec. 6 proposal put forth by Jared Grey, the DEX’s CEO. He indicates that the “significant deficit in the treasury threatens Sushi’s operational viability, requiring an immediate remedy.” Grey explains that SushiSwap’s annualized operating expenses amounted to roughly $9 million in October, but that has since been reduced to around $5 million.
“We made the reduction possible by renegotiating infrastructure contracts, scaling back underperforming or superfluous dependencies, and instituting a budget freeze on non-critical personnel and infrastructure.”
To remedy the situation, Grey proposes setting SushiSwap’s “Kanpai,” or the amount diverted to its treasury from fees, to 100% for “one year or until new tokenomics are implemented.” This would come at the cost of SUSHI (SUSHI) stakers, who typically earn trading and protocol fee rewards in return for locking their tokens. In addition, Grey illustrates why it isn’t feasible to simply use SUSHI tokens to fund expenses:
“However, as previously stated, Sushi is currently near full distribution of its token supply and has yet to capitalize on opportunities to diversify its Treasury and provide the necessary liquidity for ongoing operations.”
Going forward, Grey calls for the implementation of “a holistic token model that allows for the rebuilding of the treasury and delivers value for all stakeholders while reducing the fiscal liability carried solely by the protocol.” The CEO then warns that such measures “will take time to implement” and may not come online until the third quarter of 2023. Like similar projects, SushiSwap has been hit hard by the ongoing crypto winter, with its SUSHI tokens losing 79% of their value over the past year. It is currently ranked the 10th-most-popular decentralized exchange, with a 24-hour trading volume of $42 million.
Sourced from cointelegraph.com.
Written by Zhiyuan Sun on 2022-12-07 17:35:19.
