A fair governance model that rewards voters


A voting model that encourages and rewards time-vested voting while reducing whale bias.


  • We need a fair voting model which accounts for all participants in SUSHI ecosystem and rewards the time they have spent here
  • We should reward whales with profits proportional to their skin-in-the-game, but reduce their over sized influence on poll results
  • We should bring more value to SUSHI as a governance token
  • The model should be simple enough to implement with snapshot.page and simple contract deployments

We have two existing ways to account for SUSHI voters:

  1. SLP tokens for liquidity providers a.k.a current SUSHIPOWAH
  2. xSUSHI tokens minted from staking SUSHI at the sushibar

What we are not accounting for is time that a voter has invested in the SUSHI ecosystem and intends to invest in future. DeFi is currently dominated by migratory LPs who chase the next highest APY yield farm and move on. I do not think we need to reward such behavior with voting power and a stake at the future direction of this platform.

Our ideal voter should be providing sustained value to the platform by either providing liquidity or staking their SUSHI at the sushibar for a set amount of time before they should be eligible to vote on the direction the platform might take. In return, the platform also must provide sustained value to the voter by rewarding this behavior. This is a difficult balance to achieve. Here’s my solution.

How do we decide who can vote? I propose:

  1. SLPs from all pools in SushiSwap, not just SUSHI/ETH, who started providing liquidity 7 days before a certain vote is cast are eligible to vote i.e. their SLP can be counted towards SUSHIPOWAH.
  2. xSUSHI holders who have acquired xSUSHI tokens 7 days before a certain vote are eligible to vote i.e. their xSUSHI will count towards SUSHIPOWAH.

I’ve kept the minimum voter time value as 7 days as that seems to represent a year of normal person time in DeFi :slight_smile:. I’m open to suggestions on this time period, but would not be in favor of making it really low such as 1 or 2 days.

What benefits do SLPs or xSUSHI holders get for voting on “core” proposals? SUSHI Reward. I propose:

  1. For each “core” proposal, have a voting reward basket allocated from the dev fund. Lets say X SUSHI.
  2. For each wallet that is eligible to vote and does vote, out of N total wallets that voted, reward the wallet with (1/N)*X SUSHI. Everyone voter gets the same share from the voting reward pool.

Voters in community polls do not get voting rewards. However, this encourages community members to have their proposals discussed on the forum and on discord and pushing it through a core proposal funnel and having increased voter engagement for their proposals due to the reward attached for core proposals.

How is SUSHIPOWAH allocated to SLPs and xSUSHI stakers?

While it is fair to say that whales have more skin-in-the-game, they are also making more fees (0.25%) as a result. So their skin-in-the-game is already being rewarded. To be fair to both whales and normies alike, there needs to be a tiered distribution of SUSHIPOWAH. I propose this:

  1. SLP: All SLPs with less than $1000 staked get 1 SUSHIPOWAH. They also get 1 more vote in $1000 blocks i.e. If you provide < $1000 liquidity you get 1 SUSHIPOWAH. If you provide 5000, you get you get 5 SUSHIPOWAH i.e. 1 + (SLP value - 1000)/1000.
  2. xSUSHI: Same principle as SLPs i.e. 1 + (xSUSHI $ value - 1000)/1000.

The $1000 block choice is fairly arbitrary. We could lower or increase based on what the community recommends. However, a tiered voting power model is necessary to balance skin-in-the-game arguments vs. whale bias.

What are the quorum requirements to decide a vote?

We can keep existing minimum quorum requirements as a % of total SUSHIPOWAH for each vote calculated using the metric above when a vote is proposed.

With this model, SUSHI stakers as well as SLPs who have both skin-in-the-game as well as time-in-the-game are rewarded for being in the game and voting for the game to proceed.

The advantages of this model are:

  1. It rewards you to vote => increase voter engagement
  2. The longer you continue to stake or be an SLP => the more chance you can vote for core proposals => the more chance you get a voting reward => increases SUSHI staking and SLP engagement
  3. Whales still get a larger vote, just not that much larger to sway the vote from a single wallet => fair voting
  4. If less wallets vote => more rewards to those wallets that did vote
  5. Migratory whale SLPs or xSUSHI holders cannot simply engage in a vote immediately before polls close => Discourages non-time-vested whales to influence results => Encourages supporters of the platform to have a larger say in its future
  6. With a dev fund voting reward allocation, we cannot have too many “core” proposals i.e. we only vote for ones that have passed through a proposal council and deemed important for a full communinty vote
  7. The dev fund voting reward flows to voters who stick with the platform and help govern it
  8. Doesn’t change the core value proposition for SLPs and stakers i.e 0.025% of fees + xSUSHI 0.05% of fees.
  9. Simple enough to understand and explain. No complicated calculations involved.
  10. Should be able to implement with snapshot.page and a new voting rewards contract i.e. no investment in a new system i.e. Aragon or other DAO systems.

I’m sure better models exist. This is by no means the best. But I do think that this is better than what we have now and we can keep improving it. Until we move to a formal DAO, and we can decide on if we should, this model could work well for us.

I welcome your thoughts in this poll as well as your support and/or criticism in comments.

  • I like this model as specified.
  • This model needs minor improvements.
  • This model needs major improvements.
  • I don’t like this model and would prefer whales to continue having an over-sized influence on polls.

0 voters


I agree that other liquidity providers outside of SUSHI/ETH should also get SUSHIPOWAH, however, the liquidity providers of SUSHI/ETH should still receive more SUSHIPOWAH than the other liquidity providers as they are the ones with more skin in the game in regards to the value of SUSHI.

I think the hierarchy of voters should be:

  1. SUSHI/ETH liquidity providers (as they take on the most risk. locking their ETH at the mercy of SUSHI value)
  2. xSUSHI stakeholders (they take on less risk because they do not lock up their ETH)
  3. Other liquidity providers on SushiSwap. (they take the least amount of risk because they could easily just dump the sushi rewards they earned from farming, while maintaining the non-sushi assets in the liquidity pools).

The weight distribution of the votes could be discussed later.

All SLPs are risking IL.

SLPs in pools that are not incentivized i.e. not reward pools are also sacrificing an extra 0.05% of fees they would have otherwise received on Uniswap.

Giving them an equal voice to SUSHI/ETH SLPs increases the likelihood of them continuing to provide liquidity.

SUSHI/ETH SLPs are here more as a function of SUSHI reward APY than their governance aspect. In this model, they would get an additional reward for voting as well. And the SUSHI they earn and stake in xSUSHI gets more rewards and more SUSHIPOWAH.

Allowing all Liquidity providers an equal voice in governance shows how much we value LPs on the platform regardless of whether they are SUSHI/ETH SLPs. More SLPs, more TVL for the platform.

I see this as a win-win for all SLPs including the current SUSHI/ETH SLPs.

I agree all SLPs are risking IL (and they are already rewarded with SUSHI for the risks they take).

However, all non-sushi SLPs are not incentivized to hold the sushi rewards they receive, whereas the ETH-SUSHI SLPs are vastly dependent on the value of SUSHI and therefore are discouraged from dumping the SUSHI they receive.

A lot of yield farmers are naturally incentivized to sell their harvest as soon as possible if they want to maintain and lock in the profits that they’ve earned. This would in turn reduce SUSHI price, and would greatly increase the risk of IL for the ETH-SUSHI SLPs. That is perhaps the reason why SUSHIPOWAH has historically only been given to the ETH-SUSHI SLPs and not the other SLPs.

And for that reason, I think governance should primarily given to those that have a greater exposure to SUSHI and those that are heavily dependent on the price and success of SUSHI.

All SLPs are not rewarded with SUSHI. Only those in reward pools are rewarded with SUSHI.

Yes, I was mostly talking about the reward pools. But my thought is the same with non-reward SLPs.
They could be given voting rights, sure, but they shouldn’t have the same voting power as our primary SLP providers in the ETH-SUSHI liquidity pool.

I’m not entirely sure what this means. ETH-SUSHI SLPs are bullish SUSHI, accumulate more impermanent SUSHI when SUSHI price drops. Get rewarded SUSHI as it is a reward pool. There is nothing encouraging or discouraging them to buy/sell SUSHI on the market or stake SUSHI in the bar. As I’ve mentioned before, SUSHI holders now have their SUSHIPOWAH balanced by having both SLP and xSUSHI contributing for SUSHIPOWAH.

A 250M hardcap for SUSHI has passed the vote. Those who are short-term yield farmers sell their SUSHI to long-term holders and day traders. Hardcap = scarcity. Scarcity = value => number go up. Few understand :slight_smile: with hardcap in place, SUSHI bottom might soon be in IMO. LPs should know the IL risk. Having larger SUSHIPOWAH is probably not the main motivation for LPs.

There is little financial incentive for LPs to start pools that are not incentivized on SushiSwap at this time. They can earn 0.05% more fees on Uniswap for the same IL risk. This proposal paves the way for them to at least have a governance incentive, for whatever that is worth.

Is there any way for you to increase the leverage of a vote to give more value to a longer commitment to Sushi? For example 7-30 days 50% Vote, 31-90 days 75% Vote, 91 days+ 100% vote? Not sure on the difficulty to implement, but might provide a better hedge against short term greed versus long term commitment.

I’ve thought about this and wanted to mention it in the proposal. A Z time factor that increases based on time staked or time as SLP. Just not sure its possible with snapshot.page so left it out for this proposal.

If devs confirm it to be possible, I could add it in. We could even do this later once this 1st proposal is implemented after improvement.

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