According to a new publication On Twitter from SushiSwap CEO Jared Grey, the decentralized exchange, or DEX, saw a $30 million loss in the past 12 months in incentives for liquidity providers, or LPs. As Gray explained, SushiSwap currently employs a token-based issuance strategy to incentivize LP, but the current rate is “unsustainable.”
“We commissioned Flipside to create dashboards to display these results, which we will make available before the end of the year.”
Going forward, Gray plans to rework SushiSwap’s tokenomics so that LPs are no longer subsidized with issuance and redesign the entire initial liquidity model on the exchange. “In Q1 2023, we will bring innovation to scale exchange volume and prioritize TVL. As LPs experience a more profitable exchange experience, others should migrate to Sushi”wrote the DEX executive.
Sunday @SushiSwap thread. I want to readdress the chatter regarding the Kanpai proposal & highlight upcoming tokenomics improvements. I want to emphasize key factors in Sushi’s business model & how we plan to improve it in Q1 ’23. 1/
— Jared Gray (@jaredgrey) December 11, 2022
A Sunday thread from @SushiSwap. I want to return to the talk about the Kanpai proposal and highlight the upcoming improvements to tokenomics. I want to emphasize the key factors in the Sushi business model and how we plan to improve it in the first quarter of 2023. 1/
Gray also dedicated himself to promoting the “Kanpai” governance proposal, which will divert trading protocol fees earned as rewards from SUSHI stakers to SushiSwap’s treasury. Earlier, Gray revealed that SushiSwap’s treasury only had 1.5 years left to run.
“In a nutshell, [Kanpai] It allows the protocol to rebuild its cash reserves to continue paying competitive salaries, pay for critical infrastructure, and diversify its treasury with funds raised in base asset pairs such as ETH, stablecoins, etc. Kanpai is a temporary solution.”
Interestingly, Gray has remained tight-lipped about the design of the new SushiSwap for now, stating that it will provide “full financial transparency by publishing public dashboards for DAO and Treasury activity” in Q1 2023. When a A community member asked him about it, Gray replied:
“I discussed it extensively on the Sushi Discord, community calls, AMAs, and more. The official whitepaper is out on EOY. Nobody’s saying, ‘trust me bro,’ I’m saying full details are out then and there.”
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