SushiSwap CEO Jared Grey revealed on Twitter that the decentralized exchange (DEX) lost $30 million on incentives for liquidity providers, or LPs, over the course of the previous year.
SushiSwap currently uses a token-based emission approach to reward LPs, as revealed by Grey, but the current pace is unsustainable.
Grey intends to overhaul the entire bootstrapping liquidity model for the exchange as well as SushiSwap’s tokenomics in order to stop subsidizing LPs with emissions.
Jared Grey stated in a tweet:
“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.”
Grey also engaged on advancing the “Kanpai” governance proposal, which would redirect trading protocol fees received as incentives from SUSHI stakeholders into the SushiSwap treasury.
Jared also added:
“So what does Kanpai redirecting 100% of fees to Sushi’s Treasury do for the protocol & current stakeholders? Put simply, it allows the protocol to rebuild its cash reserves to continue to pay competitive wages, pay for critical infrastructure, & to diversify its Treasury with funds collected in the base pairs of assets, like ETH, stablecoins, etc. Kanpai is a temporary solution helping address the long-term issue of a broken Sushi token & business model, which the above multi-point plan addresses wholly.”
Despite promising to provide complete financial transparency by making public dashboards for DAO & Treasury operations in Q1 2023, Grey has remained quiet for the time being about the design of the new SushiSwap.
Jared Grey responded to a tweet from a Twitter user who inquired about the tokenomics change. Jared said:
“I’ve discussed it at length in the Sushi Discord, on community calls, AMAs, and more. The official whitepaper comes out by EOY. No one is saying, “trust me, bro” I’m saying full details come out at that time.”
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