SushiSwap runs out of funds

DeFi platform SushiSwap proposed redirecting all revenues paid to xSushi holders to its Treasury. SushiSwap Head Chef warned of a significant deficit threatening the decentralized exchange.

Newly appointed as Head Chef, Jared Grey told the SushiSwap community:

Over the past two months as Head Chef, I’ve spent most of my time analyzing the operational and budgetary expenses and liabilities to ensure the project’s long-term success. After reviewing expenditures, it’s clear that a significant deficit in the Treasury threatens Sushi’s operational viability, requiring an immediate remedy.

If the Kanpai proposal is accepted, the company will redirect 100% of fees to SushiSwap Treasury for one year or until new tokemonics is implemented. Users who stake Sushiswap governance token SUSHI receive a token called xSushi, which gives them rewards from all trades on the platform. Currently, xSushi holders receive 0.05% of each swap, 10% of which goes to the SushiSwap treasury wallet. In his proposal, Gray recommended that SushiSwap increases the treasury fee ratio from 10% to 100%, leaving no more the reward in the form of tokens for xSushi holders.

Now the ratio of 31 voters is 77% to 31% in favor of securing Sushi’s future with Kanpai.

Yet, not all community members are satisfied. One of them states:

Depriving xSushi holders of the fees they are entitled to is a breach of primary covenant before the community.

You already went to claw back unclaimed sushi, and it wasn’t enough?

Few things are as long-lasting, as those deemed ‘temporary’.

The proposal was made to turn around the declining trend. Once SushiSwap was a competitor to Uniswap. According to CoinGecko, Uniswap (v3) is on top with $583.033.906 in 24 hours trading volume, while SushiSwap is in 9th place with $16.192.078.

Still, Jared Gray is optimistic that he’ll be able to turn the tide, just as a new CEO can revive a dying company. He told in the interview with Block:

I would say that’s exactly what I’m focused on doing — a kind of wartime CEO methodology right now. Like where can we cut? Where can we lean out?