Despite facing opposition on social media, the team behind the decentralized exchange SushiSwap may push forward with their controversial proposal to change the platform’s treasury structure.
On March 26, the SushiSwap team made a governance proposal to adopt a Labs model, aiming to enhance operational efficiency and accelerate protocol development. However, the proposal includes a contentious tokenomics overhaul that involves transferring around 25 million tokens worth approximately $42.5 million from the decentralized autonomous organization (DAO)-controlled Sushi Treasury to Sushi Labs.
As part of the proposed changes, 25 million tokens would be minted and granted to Sushi Labs, and a 1.5% APR (baseline) would be introduced to strengthen liquidity, incentivize participation, and fortify the Treasury. Currently, the maximum supply of SUSHI tokens under the existing tokenomics model is 250 million.
Furthermore, Sushi Labs would become the sole recipient of future airdrops from protocols and partners. Voting on the proposal began on April 3 and will conclude on April 10. Currently, over 29 million SUSHI tokens have been pledged, surpassing the quorum requirement.
Initially, the votes for and against the proposal were evenly matched, but recently, the “yays” have gained the upper hand. So far, only 9.7 million tokens, equivalent to a third of the votes, have been lodged against the proposal. Notably, the Sushi Labs team, which proposed the changes, pledged 5.5 million tokens in favor, while a prominent opponent pledged 4.4 million SUSHI against it under the address “sushicitizens.eth.”
Former SushiSwap contributor Naïm Boubziz has alleged that the team voted for themselves using the protocol’s multisignature wallet, claiming they had previously attempted to withdraw 4 million SUSHI from the treasury multisig in early March.
Accusations have also arisen suggesting that the Sushi team took out a loan to vote for their own proposal. On April 4, Boubziz stated that they “borrowed money for a few hours to add liquidity in order to double their voting power for snapshots.” In response to these allegations, Sushi “Head Chef” Jared Grey defended the team, stating that they added liquidity and voted with the multisig Ops address to protect against a hostile takeover.
SushiSwap has a history of power struggles, having surpassed industry leader Uniswap following a vampire attack in 2020. However, its founder, known as “Chef Nomi,” reportedly attempted a rug-pull shortly after, leading to controversy, internal conflicts, and ongoing chaos within the protocol.
As of the time of writing, SUSHI is trading at $1.70, a 93% decrease from its all-time high in March 2021.