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DeFi protocol SushiSwap has announced it would be shutting down its lending protocol, Kashi, and its token launchpad, Miso.
The company stated that it had come to its decision due to a number of reasons, including poor execution, poor design choices, and a lack of resources.
A Slew Of Changes
The latest move by SushiSwap comes after the protocol’s CEO had proposed new tokenomics for increased liquidity and better decentralization. The new tokenomics model would see the introduction of time-lock tiers for emission-based rewards. It would also introduce a token-burning mechanism and liquidity lock for price support. CEO Jared Grey hopes the new tokenomics will boost liquidity and decentralization on the platform, help strengthen treasury reserves and ensure the continual operation and development of the protocol.
Grey took to Twitter, asking the community for questions and feedback.
“I am excited to share the vision for @SushiSwap’s new token model. I’ve posted a brief tl;dr write-up on the Sushi forum & linked the entire proposal. We look forward to your questions & feedback.”
Kashi And Miso Shut Down
Now the DeFi protocol has announced that it is shutting down its lending protocol Kashi, and its token launchpad, Miso. Elaborating on the rationale behind the move, Matthew Lilley, SushiSwap CTO, stated that Kashi had several issues, including several design flaws, a lack of resources, and considerable losses. However, in the larger picture, the team had to prioritize and improve their most prominent offering, the SushiSwap DEX.
“We made the decision to deprecate Kashi (Sushi Lending) and Miso (Sushi Launch Pad). 1. Kashi, for a number of reasons, had a number of design flaws, ran at a loss, and had a lack of resources to dedicate to it. 2. MISO had a lack of resources.”
Lilley assured the community that they do plan on launching new staking and launchpad products in the near future to replace the soon-to-be-defunct services as soon as additional liquidity becomes available. However, for now, the team’s focus would be on the DEX, which he described as the “breadwinner” of the company.
“We have the plan to launch successors of these products in the future once we have the resources to dedicate product teams towards them, but believe that requires focusing entirely on the breadwinner at the time being, which is inarguably the DEX.”
An Expected Move
The move to shutter the two platforms did not surprise many, with developers having already announced in mid-December that the Kashi 1.0 interface would no longer support deposits or borrowing. According to the announcement, the original UI would remain online, but the markets would not be updated. It also stated that MISO UI would be accessible indefinitely, but no further support or development would be provided.
SushiSwap’s Recent Financial Woes
SushiSwap has made the decision to shutter specific offerings against the backdrop of significant financial stress over the past few months. In an update shared in December, the firm revealed it had only 1.5 years of operating costs in hand, and the situation required immediate attention and action to ensure that the firm had sufficient resources to ensure seamless operations.
CEO Grey had stated that the company was pursuing a strategy that would see it renegotiate infrastructure contracts and cut back on underperforming and superfluous dependencies. It would also enforce a budget freeze on non-critical personnel and infrastructure as it looks to cut back on expenses. Gray also revealed the company had made a loss of $30 million over the past 12 months.
“In the past 12 months, Sushi has experienced a 30M USD loss in its emissions-based reward strategy to bootstrap liquidity & incentivize LPing; Sushi spends more on emissions than swap volume generated.”
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.