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Head Chef Jared Grey has proposed that the 100% of xSUSHI revenue be allocated to the treasury wallet for the next 12 months.
Head Chef Calls For Immediate Remedy
The decentralized exchange is discussing this proposal to provide financing for its operations and extend its runway beyond the next year and a half. It proposes directing all the fees paid to the xSushi holders into the treasury wallet for the next year.
The exchange has been facing a severe funding crisis and other indications of declining fortunes. Newly appointed Head chef, Jared Grey, is attempting to turn the company’s fortunes around and extend its lifespan, which according to him, has been reduced to just 1.5 years.
His proposal states,
“I propose setting Kanpai to 100% of fees diverted to the Treasury multisig, for one year or until new tokenomics are implemented, helping return Sushi’s fiscal resources to a competitive level.”
According to Grey, the company needs $5 million to remain operational in the bear market. While putting his plan forward, he stated that the significant deficit in the Treasury was the biggest threat to SushiSwap’s operational viability and needed an immediate remedy to ensure proper funding.
No Rewards For xSUSHI Holders
The crux of the plan is to take all the funds generated by trading fees on the exchange. Now let’s understand how that would work. One of the methods of earning rewards on the SushiSwap platform is by staking the sushi token and receiving the xSushi in return. For each swap, xSushi holders receive 0.05% of the transaction fees, 10% of which is directed to the SushiSwap treasury wallet. Now according to Grey’s proposal, the percentage of funds allocated to the treasury should be increased from 10% to 100%. This would mean no more token rewards for the xSushi holders.
A core developer at SushiSwap, Matthew Lilley, believes this could be a temporary solution to help the exchange. He said,
“The timeline is 12 months, if nothing has changed after 12 months it will default back to the original model. Hopefully it can be ended early if tokenomics revamp is concluded before.”
SushiSwap Community Not Pleased
The proposal has been put up for voting in front of the DAO. 75% of the 28 members who voted at the time of writing supported the proposal. However, there has been some pushback from the community otherwise. Many users believe that if the reward fee for xSushi holders is taken away, they will not have any incentive to hold on to the SUSHI tokens. Some users have claimed that the reward fee was one of the reasons to hold on to the SUSHI tokens even in a bear market. Without the incentive to do so, many users might just dump the token. These speculations might have some value, as the SUSHI token had dropped by 6% in the 24 hours following the news.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.