Since December 12, theDeFi ecosystem pays particular attention to the decentralized exchange protocol SushiSwap. The latter was imposed a vote on his community, involving radical changes, calling into question the legitimacy of the platform. The result fell last night, no offense to some…
An annoying decision
At the end of 2022, the platform SushiSwap, the flagship product of decentralized finance, is at the heart of several debates. Welcoming Jared Grey, as the new “Head Chef », the platform first experienced a radical change last October. But, it was in this month of December that the platform attracted particular attention, imposing a climate of concern around it.
It will all start with This article posted by Jared himself, on the official SushiSwap forum. An article describing the current situation of the protocol and in particular the health of their treasury. In this bearish period observed on the cryptocurrency market, the protocol says it can assume its proper functioning until mid-2024. Date on which the platform will be insolvent either, with empty pockets!
“Cash is currently sufficient to ensure ~1.5 years of operation. Therefore, the situation requires immediate action to ensure sufficient resources for uninterrupted operation. »
With a governance token, the Sushi, having reached a maximum quantity (max supply), the creation of value is no longer ensured and must be rethought to ensure the funds of the Treasury. From this step, the Head Chief will reduce the costs of the platform, the infrastructures, the team… going from 9 to 5 million dollars annually, but that will not be enough. Thus, it will impose a radical voteproposing the redistribution of the rewards initially allocated to the holders of the token xSushi, to the treasury. Rewards collected through protocol fees, enticing users to come staker their tokens on the platform.
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A less surprising result
A vote that will end 7 days later with a majority decision of 58%. That of applying the plan proposed by the SushiSwap team, in order to save their cash. Initially planned at 10%, it is now 100% of fees who will go towards it, over a minimum period of one year.
Thus, no more utility is associated with their second flagship token, the xSushi, of $62 million of total capitalization, sidelining more than 17,000 holders. Holders who have come to generate passive income that will no longer be part of it. A situation that will fall the price of the Sushi token of 39% in just 13 days.
A DAO called into question
The vote will, logically, have been imposed and voted on by the community in the form of a CAD. A community holding the platform tokens, perceived as dividends, which will have agreed on the acceptance of the new model Kanpai. But can we really speak of a unanimous vote?
When we look closer, we can see inequalities through the votes. Some, holding a huge amount of tokens, will have a much larger voting power than others, thus making it possible to monopolize the vote and the resulting decision. Holders, described as whales, of which we know neither the identity nor the intentions.
Beyond that, the team will disclose, via a document handed over publicly, that the team’s salaries would exceed the $4 million, year round. A large sum came to question the legitimacy of the project, seeking to consolidate their cash flow via the rewards initially perceived by the holders.
Following this decision taken by the team and the investors, the future of the protocol will be strengthened in this period of Bear Market, despite cutting off all rewards to holders of xSushi, a token valued at over $60 million. What will be the consequences, and how will the protocol and its token behave, given a reluctance of its users?
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