SushiSwap To Send Money From xSUSHI To Treasury Wallet As 'Temporary Fix'

Zinger Key Points
  • SushiSwap seeks all money paid to xSushi be transferred to its coffers.
  • Jared Grey, the head chef of SushiSwap, says that the project is running out of money.

Decentralized exchange SushiSwap is mulling a fresh idea that would funnel all fees paid to xSushi holders into its treasury pocket for an entire year in order to fund its operations.

The proposal comes as SushiSwap, now under new management, works to improve its deteriorating financial situation.

Jared Grey, the project's new head chef, claims that the project's runway has been cut to just 18 months, and he is working to extend it.

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"After reviewing expenditures, it’s clear that a significant deficit in the Treasury threatens Sushi’s operational viability, requiring an immediate remedy,” Grey says, adding that the team needs $5 million to keep running.

To provide sufficient funds, SushiSwap needs "immediate action," he says.

The plan is to take all of the money the exchange makes from trading commissions.

A token called xSushi, which grants them a reward fee from all trades on the platform, is given to those who stake the governance token sushi of the Sushi platform.

Currently, 0.05% of each trade goes to xSushi holders, with 10% going to the SushiSwap treasury wallet.

Grey suggested in the proposal that SushiSwap raise the treasury fee ratio from 10% to 100%, eliminating any token benefits for owners of xSushi.

The present fee-sharing structure will be reinstated after a year, according to Matthew Lilley, core developer at SushiSwap, concurred with Grey's suggestion that this would only be a temporary fix.

“The timeline is 12 months, if nothing has changed after 12 months it will default back to the original model. Hopefully, it can be ended early if the tokenomics revamp is concluded before,” Lilley said.

If approved, the idea might have a significant impact on investors.

The reward fee paid to xSushi encourages community members to keep their SUSHI tokens by giving them a second source of income on top of any value growth they may experience.

If the reward fee set aside for xSushi owners is eliminated, that money is lost.

Members of the community have already commented on the plan, with several users expressing their ire at what they saw to be an unjustified action.

“Depriving xSushi holders of the fees they are entitled to be a breach of the primary covenant before the community,” one community member said of the proposal.

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