According to a new proposal dated Dec. 6, Jared Grey, CEO of decentralized exchange Sushiswap (SUSHI), disclosed that the project’s Treasury has less than 1.5 years of runaway left, and the “significant deficit in the treasury threatens Sushi’s operational viability, requiring an immediate remedy.” Grey explained that Sushiswap’s annualized operating expenses amounted to roughly $9 million in October, however, 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 proposed setting Sushiswap’s “Kanpai,” or the amount of fees diverted to its Treasury, to 100% for “one year or until new tokenomics are implemented.” This would come at the cost of SUSHI stakers, who typically earn the trading and protocol fee rewards in return for locking their tokens. In addition, Grey illustrated why it wasn’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 called 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 warned 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.
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