DeFi Protocol SushiSwap Proposes 'Immediate' Action to Support Its Treasury

Developers proposed to divert 100% of fees generated on the platform to Sushi’s multisig for one year or until new tokenomics are implemented.

AccessTimeIconDec 7, 2022 at 7:50 a.m. UTC
Updated Dec 7, 2022 at 3:51 p.m. UTC

SushiSwap, a decentralized finance (DeFi) protocol, is facing a significant deficit in its treasury that threatens its long-term operational viability, according to a governance proposal from project developers.

After reviewing expenditures, the project's annual runway requirement was reduced from $9 million to $5 million, but the treasury still provides for only about 18 months of runway, developers said.

To address the deficit, lead developer Jared Gray proposed setting Kanpai, a fee-diversion protocol, to 100% of fees diverted to the Treasury multisig for one year, or until new token distribution and reward schemes are implemented.

The proposal is a temporary solution to a long-term problem, and new tokenomics will take time to implement, developers said.

Community members showed mixed reactions to the proposal. Some said that depriving users of the “fees they are entitled to” felt like a breach of the project’s primary objections, while others criticized the “sensationalized” tone used by developers to highlight the urgency of the situation.

Developers, however, maintain that the proposal is to ensure the long-term operations of SushiSwap.

“Bear market environments present multiple challenges for projects and teams, and recently we’ve seen many notable projects lay off substantial personnel or go bankrupt,” Gray noted in the proposal.

“It makes little sense for Sushi to follow a similar path when it has an opportunity to capture its singular significant source of revenue and direct it back to the treasury for the benefit of all,” he added.

The Sushi team had increased its funding by securing several multi-million-dollar partnership deals, Gray said, cautioning that relying on such business development deals is only “part of a successful business model to secure Sushi’s future.”


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Shaurya Malwa

Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.

Read more about