SushiSwap team treasury takeover looks likely, despite heated debate

The team suggesting a contentious modification to SushiSwap’s treasury system is moving forward with their plan, despite strong backlash against it on social media.

On March 26, the SushiSwap team suggested a contentious plan for the platform’s governance. This proposal aimed to transform SushiSwap substantially by implementing a “Labs” structure.

The goal is to reorganize the existing structure in order to improve operational effectiveness and speed up the process of creating new protocols.

Despite this, the update involves a contentious change to Sushi’s tokenomics that intends to transfer management of approximately $42.5 million in Sushi Treasury assets to Sushi Labs using DAO control.

“We request that Sushi DAO award a grant of 25 million Sushi tokens to Sushi Labs, including assets from the Arbitrum airdrop, business development, and partner grants, Kanpai 2.0, Sushi 2.0, rewards, stablecoins, and “Sushi House” funds.”

“The revisions will involve giving Sushi Labs a single mint of 25 million tokens and implementing a baseline Annual Percentage Rate (APR) of 1.5% to boost liquidity, encourage engagement, and strengthen the Treasury,” the statement continued.

There is a current maximum supply of 250 million SUSHI tokens under the existing tokenomics model. 

An extra perk is that Sushi Labs will be the only recipient of upcoming airdrops distributed by protocols and collaborators.

The voting process started on April 3 and will conclude on April 10. A total of approximately 29 million SUSHI tokens have already been committed, exceeding the necessary amount for reaching the required threshold.

The support for both outcomes had been quite balanced up until now, but more recently, the ‘yes’ side has gained a notable advantage.

At the moment, only a third of votes — 9.7 million tokens — have been lodged against the proposal.

The Sushi Labs team, represented by some “whale” voters, put forward a proposal and committed 5.5 million tokens to support it. However, a significant opponent with the handle ‘sushicitizens.eth’ countered by pledging 4.4 million SUSHI against it.

Naïm Boubzis, a previous SushiSwap collaborator, alleges that the team made self-serving transactions using the protocol’s multisignature wallet following their declaration of attempting to acquire 4 million SUSHI from the treasury multi-sig in early March.

SushiSwap team treasury takeover looks likely, despite heated debate

Along with the allegations against the Sushi team, it was claimed they obtained a short-term loan to amplify their voting influence during snapshots on April 4. Boubziz admitted to this action, stating that they borrowed funds temporarily to boost their liquidity and voting weight.

In a defense posted on X on April 8, Sushi Labs’ Head Chef Jared Grey countered accusations that the company manipulated the vote by introducing liquidity right before the voting process and subsequently withdrawing it, erasing snapshots, and casting votes using the multisig Ops address.

“Based on the advice of our lawyers, I instructed the operations team to carry out the YAY vote using our OPs wallet and its assets, as we faced the possibility of a unwelcome takeover,” he explained.

SushiSwap team treasury takeover looks likely, despite heated debate

In simpler terms, power disputes are common in the world of decentralized exchange protocols. For instance, SushiSwap, which emerged in 2020, experienced rapid growth and overtook Uniswap as an industry leader after a “vampire attack” event occurred.

Nevertheless, it’s been reported that the anonymous creator of this protocol, known as ‘Chef Nomi,’ tried to swindle investors in a scheme called a rug-pull soon after stirring up controversy, disagreements, and ongoing turmoil within the project.

At the moment of this text, SUSHI tokens were priced at $1.70 on the market, marking a significant decrease of 93% from their peak value in March 2021 which was three years prior.

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2024-04-09 08:24