- More than 58% of votes were in favor of increasing the treasury payout to 100%.
- Out of the 58% of votes in favor, more than 90% of that voting power belongs to two wallets.
- The proposal will add a projected $6M to the treasury over the next year.
Sushi DAO concluded its proposal for increasing the treasury payout to 100% on December 19, with more than 58% votes in favor. The proposal was in the form of a Signal vote, and an implementation vote will follow as per the Sushi Governance Process.
⚡️ The results of the signal proposal "Increase Kanpai Treasury Payout Ratio to 100%" are in!
— SushiSwap (@SushiSwap) December 19, 2022
🗳 With a voter turnout of 18+ mil Sushipowah it passed with almost 60% in favor ✅https://t.co/XBiUUzAis7
Stay tuned for the next step ( implementation proposal), coming very #soon
As per the proposal, xSUSHI holders will not receive trading fees from the exchange for the next year or so, as this reward will now go to the project’s treasury. The current payout ratio to the treasury was 10%, but this proposal will see that ratio increased to 100%. The justification behind this proposal was that Sushiswap is in dire need of funding in the near term as it looks to find a path to long-term sustainability. The revenue to the treasury will be in the form of 50% ETH & 50% USDC with a projection that the proposal will bring in an estimated $6m over the next year.
Community Backlash
The proposal has faced significant backlash from the SUSHI community as it drives away the reward from token holders to the treasury, which is effectively controlled by a few individuals. The contested nature of the proposal also meant that more than 780 wallets participated in the vote, making it one of the highest turnouts for the DAO.
Out of the 11M tokens that were in favor of the proposal, more than 90% of that voting power came from two wallets: one belonging to GoldenChain (the venture arm of Golden Tree) and the other related to Cumberland trading firm. Both parties hold a significant share in the protocol with the former announcing a $5M+ investment in SUSHI a few months ago. The manner in which this proposal progressed highlights some of the challenges of decentralized governance with the voices of the majority possibly going unheard.
A Fresh Start
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.
— I'm Software 🦇🔊 (@MatthewLilley) December 6, 2022
I'd much prefer you give an argument as to why xSUSHI is a sustainable model? 😉
While there have been questions raised about how the protocol justifies a figure of $5M as a runway for the next year, the new team seems to have a plan in place. A lot of the problems that SUSHI faces today have been inherited by the current team, which has done a good job of discontinuing loss-making products like Kashi & MISO, and launching new and innovative products like cross-chain swaps and Trident. Meanwhile, the new management team has done a good job of reducing the operating cost of the protocol from $9M to $5M.
On the Flipside
- The proposal will offer Sushi developers enough runway and time to execute its long-term vision and help the protocol survive the bear market.
- The uproar that the proposal caused shows that there is still a strong community behind the project and should the team deliver on its promise, there might still be a future for the project.
Why You Should Care
Sushi has a long history of suffering from incompetent management, but the new team, backed by new investors, wants to seemingly do right by the community. Some of the actions of the new team do raise eyebrows, and only time will tell whether or not they were the right fit to guide Sushi’s revival.
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