Nomination for Head of Chef: Werner Jacob

Nomination for Head of Chef: Werner Jacob

Background: Robotic engineer and MBA holder from top French universities
Former International Investment banker in charge of corporate finance structuration and loan portfolio manager, in charge of USD 2 Bn portfolio of emerging markets strategic assets at 29 years old. In addition to have developed and reviewed complex financial models and heavy legal documentation, managing analysts and associates as well as supervising or leading their hiring process, I was regularly exposed to world class corporate lawyers as well as CFOs and CEOs of leading multi-billions organisation or government representatives such as ministers of emerging but also European countries.

I discovered cryptos and Ethereum in 2016 and became really interested by its programmable smart contracts, decentralisation and the opportunities they could offer in emerging markets for instance. I started to invest personally the same year and consecutively created a regulated hedge/VC fund in Q3 2017 generating over 1,500% in return that fiscal year.
Non exhaustive list of investments as part of BC Capital and personal includes Ethereum in 2016, ETHLend (Aave) in 2018, Avalanche at ICO, Trader JOE early farming, a fork of Sushi without governance, among others.

I also advised a founder on the creation of the London based crypto market maker Wintermute in 2017.

From these investments, I retained that the prime focus of a DEX/Dapp CEO, or here HC, should be on identifying sustainable trends, innovations, supervising their implementations by ensuring resources availability to then provide growth and revenues for both the protocol and its stakeholders by matching the former with the correct markets. To be able to understand the technicality behind the protocol is of course a must on which my background as robotic engineer will definitely help, but I don’t think the HC should be involved in any technical developments, Sushi being full of brilliant developers and technical experts. Past mistake with Joseph DeLong was to have placed a CTO, with strong technical expertise but little managerial/organisational experience for instance as a CEO equivalent.

From a strategic standpoint, I believe that Sushi might be struggling compared to Uniswap or CEXs for instance due to several factors including: lack of sophistication of protocol mechanisms, regulatory hurdles, organisational inefficiencies, and market mismatch.

Issues that the following strategy development pillars I identified for Sushi might help to solve:

  1. LP mechanisms deserve to be improved both in term of:
    a) Rewards with the introduction of dynamic fees
    b) Redesigning the AMM far from the X*Y=K formula. It might indeed help to reduce the strong ILs that are more and more difficult to justify in period of low yields.

  2. Exchange mechanisms would deserve an improvement as well:
    a) Introduction of concentrated liquidity
    b) Review of the fees as above
    c) Reduction of the DEX slippage to 0 through review of the order book management

  3. As we saw in the recent bear market, revenues vary greatly between the top of a bull in October last year (USD 4,1Mn on 15/10) and the bottom of the bear in August (USD 164k on 5/8), impacting token holders as well as the exchange operations. A diversification would be in my opinion beneficial in the trend of what have been done until now with Kashi, Onsen and Miso: Undercollateralized lending that would allow participants to take high volume leveraged position on the DEX, NFT platforms seeing globally important revenues or anything else relevant… The idea would be to continue to make Sushi an all-in one DeFi and NFT platform whose different “business units” support each other and streamline general revenues reducing impact from macro cycles volatility.

  4. The excess of treasury, amounting currently to c. 12Mn $Sushi, should also participate to the revenue generation effort. For instance, through discretionary or non-discretionary investments in tokens and equity. A redistribution of the profits generated by these investments to the token holders, on the model of a decentralised hedge fund would benefit everyone.

  5. The restructuration of Sushi hierarchy and its organisation, redefinition of operational processes. Sushi needs to be structured, but shouldn’t be structured as a classic organisation, few excellent DAO models already exist (Aragon, Moloch, Ink…) and some inspiration could be taken from them, setting a new unique DAO standard from scratch could also be interesting and possible. The most important is to keep the organisation as flat and the governance as decentralised as possible. HC/CEO is not above others, it is just someone with a particular set of skills at the service of stakeholders and collaborators.

  6. Redesign of xSushi distribution potentially exposing the protocol to regulatory scrutiny in its current form and to limit the current sell pressure.

  7. Exploration of a regulation compliant entity, institutions are entering the market, they have liquidity and they need a platform on which they can transact without risking their licenses or fines at best:
    a) A first step in this direction would be as discussed to settle a legal entity that would be able to legally hire and deal with its legal obligations, Switzerland, CI, BVI, Bahamas and Dubai are some options
    b) A second step would be through the implementation of non-pool centric liquidity procurement. I had a chat while I was regulated by the FCA with them about LPs on public pool, regulators in general don’t like them too much.
    To be noted that regulation means long delay, expensive costs and extensive work and have multiple complex implications on the general operations of the DEX, it needs to be treated carefully for this kind of protocol and ensure enough resources are available.

  8. Redefinition of market target, expansion to alt L1s and L2s outside of Ethereum is great but not sufficient. I saw that a proposal for Stargate was initiated but in addition, Sushi could also develop the centralisation of liquidity for its alt L1s and L2s ecosystem, the current structure being not optimal.

  9. Funding and investments, if any, should be done by the community and stakeholders through the market only, no VCs unrelated to the project should be backing it in my opinion and no private sale granting investors token prices that not everyone could have access to. Fair and transparent.

  10. Creation of a cashflow tracker: I had a chat with Tokenterminal that offers a good summary of the protocol revenues, but believe Sushi should make something more detailed and in house showing clearly the whole cash cascade of the protocol.

Also, most of the technical developments mentioned above might not need direct hiring or in house teams instead, as mentioned above in 4), Sushi could take advantage of its excess of treasury to invest in projects and start-ups working on these issues and with far better expertise on the subjects. The core market of sushi is DEX operations, new concept developments which might be considered as R&D takes time and money being able to delegate to the right partners will be key in Sushi fast success at first. For projects that haven’t been developed yet, an incubator DAO similar to New Order DAO (or similar to Moloch or Metacartel) that I saw present in the proposals and with which I spoke could be working on this.

I am aware the list is long despite incomplete, making the strategy ambitious but I believe it is what is at least required to have a hope of achieving greatness.

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