- Developers of Sushiswap have presented the community with a new governance proposal.
- The plan calls for transferring all fees made on the platform to Sushi’s multisig.
- Sushi’s multisig would be supported by the funds for a year or until new tokenomics were introduced.
Sushiswap, the company behind the decentralised finance (DeFi) protocol, has presented the community with a fresh idea. The proposal states that for a year or until new tokenomics are implemented, all fees generated on the platform would be directed to Sushi’s multisig.
This most recent cryptocurrency report coincides with Sushiswap’s current significant treasury deficit. The protocol’s long-term operational viability is in jeopardy due to the deficit.
Jared Gray, the head chef, made the following proposal:
“After reviewing expenditures, it’s clear that a significant deficit in the Treasury threatens Sushi’s operational viability, requiring an immediate remedy. In my original proposal, Sushi operated with an annual runway of 9M USD. However, after my detailed review, we reduced that requirement to 5M USD. 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.”
Even though the annual runway requirement for the project was decreased from $9 million to $5 million, the Treasury still only has funding for about 18 months of runway.
The creators are now advocating for the implementation of the fee-diversion protocol Kanpai. If approved, 100% of fees will be diverted to the Treasury multisig for a year or until the project’s new token distribution and reward schemes go into effect, whichever comes first.
Sushiswap’s fee-diversion strategy is a short-term measure
The proposal, according to the developers, is only a short-term fix for a serious issue. The proposal was made because it will take time to implement new tokenomics.
The chief stated;
“Kanpai is a temporary solution to a long-term problem, and a new tokenomics proposal is on the horizon, which will help address the long-term value proposition of Sushi for stakeholders. Sushi must implement a holistic token model that allows the rebuilding of the Treasury and delivers value for all stakeholders while reducing the fiscal liability carried solely by the protocol.”
The Sushi team also claimed that it increased its funding by securing several multi-million dollar partner deals in addition to Kanpai.
To secure Sushi’s future, the developers added that relying on business development agreements is only one component of a successful business model. GoldenTree Asset Management invested $5.2 million in Sushiswap in October.