- SushiSwap CEO proposes contrversial solution amid treasury projected to run out of funds in the next 1.5 years
- Grey proposed the diversion of all fees to SushiSwap’s treasury
Grey, the man that came to the rescue of popular decentralized exchange SushiSwap shed light on some distressing financials. The CEO or as the Sushi community refers to this title “Head Chef” actively analyzed the DEX’s expenses and liabilities. The analysis of the last two months have led the CEO to put forth a rather controversial proposal.
Proposal to divert all fees to SushiSwap’s treasury
Head chef Grey revealed that SushiSwap was currently operating with an annual runway of $5 million. That figure has been brought down from $9 million. However, the bear market paired with the DEX’s expenses still posed a considerable threat to Sushi’s operations in the future. According to the CEO, with the ongoing rate, SushiSwap’s treasury is projected to run out of funds in 1.5 years.
To address this problem, Grey proposed that the portion of fees sent to the exchange, or the Kanpai, be increased to a whopping 100%. This move would provide the DEX with the liquidity required to sustain its operations in the future.
Additionally, this will also eliminate the need to sell SUSHI in the open market. According to the proposal, the token was currently near full distribution of its supply. While the diversion of all fees from the exchange to the treasury will likely come at the expense of Sushi stakers, it will also avoid the market selling of SUSHI. This is expected to offset the damage to stakers to some extent.
“In addition to Kanpai’s revenue, the Sushi team increased its funding by securing several multi-million dollar partner deals. Yet, relying on business development deals is only part of a successful business model to secure Sushi’s future” the head chef stated.
New tokenomics for SushiSwap
Head Chef Grey clarified that the Kanpai solution was a temporary one. The diversion of fees was proposed to last for a year or until new tokenomics could be implemented. While Grey indicated that a new tokenomics model is in the pipeline, he noted that such a plan may take a while to implement.
The CEO further estimated that considering the development of a new model and the time required for it to pass the governance votes, new tokenomics may come into effect between Q2 and Q3 of 2023. The proposal received mixed reactions from the community. While 68% have shown support for Grey’s proposal, 32% have voted against it.
Data from CoinMarketCap showed that SUSHI dropped more than 15% since the proposal came out. The token, at press time, was trading at $1.20.