- Sushi CEO Jared Grey proposed setting Kanpai’s fee to 100% after revealing that the exchange’s treasury has less than 1.5 years of runway left.
- Kanpai is a fee-diversion protocol that redirects specific amounts of trading and other fees to the treasury.
- Stakers of SUSHI would be most affected by the proposal since they would no longer receive any trading fee rewards.
- While almost 70% of voters have wanted in favor of the proposal, many have expressed frustration about it.
- SUSHI reacted to the news by dropping more than 15%. It currently trades at around $1.20.
Decentralized exchange Sushi (SUSHI) is facing serious financial troubles amid the deepening crypto winter, its CEO Jared Grey revealed in a proposal posted on Tuesday.
Grey’s proposal stated that Sushi’s treasury has less than 1.5 years of runway left, despite having reduced the annual operational costs to $5 million from $9 million in October.
Grey said a “significant deficit in the treasury threatens Sushi’s operational viability, requiring an immediate remedy.”
Grey’s proposed remedy is setting Kanpai’s fee to 100% for “one year or until new tokenomics are implemented.” Kanpai is a fee-diversion protocol that redirects a certain percentage of trading and other fees to the treasury. This means that stakers of SUSHI (who hold a derivative token SUSHIx in exchange for SUSHI) would no longer receive any trading fees as a reward.
So far, almost 70% of voters favor Grey’s proposal.
However, most users seem to be against Grey’s proposal. One user responded by saying that the proposal would deprive SUSHI stakers of “the fees they are entitled to, [which is] a breach of primary covenant before the community.” Grey responded, saying that the proposal needs to be passed to “save the project.”
“No one is depriving anyone. It’s an agreement to redirect the fees to save the project. It’s that simple,” said Grey, who joined the decentralized exchange two months ago and has already been accused of participating in scam projects.
To make matters more ominous, he was even accused of inappropriate relations with a horse, allegations which he strongly denied.
Another user said that Sushi has no competitive advantage over its competitors like Uniswap and Curve, and that its only goal now should be to catch up with them. The user said that a limited runway is “a great motivator” to do that.
Sushi’s native token dropped by 15% on the news. It’s currently trading at $1.20, which is 95% down from its all-time high of $23.38, according to data from CoinGecko.
Susi is the sixth largest decentralized exchange, with $420 million in total value locked, according to data from DefiLlama. It has significantly fallen behind its main competitors like Uniswap, Curve, Balancer, and others.
Sushi’s financial problems come just two months after asset management giant GoldenTree disclosed a $5.2 million investment in the company. The investment announcement came days after Grey joined Sushi as the new CEO, fueling the rumors that the real party controlling Sushi is GoldenTree.
On the Flipside
- It’s unclear what the operating costs of Sushi are comprised of. Some speculate that the majority of the $5 million needed to run Sushi goes to salaries.
- Sushi has been having trouble since the beginning. Most of its CEOs, or Head Chefs, exited the exchange scandalously.
Why You Should Care
Sushi is one of the largest decentralized exchanges in the industry. It would be a big blow to the industry if it went under. The community, which has suffered from inadequate management since the launch of the exchange, would have another opportunity to question the actions of the new CEO and his team.
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