Ondo Dreams of Sushi

Ondo Dreams of Sushi

Assembling the Poke Bowl: a DAO-led coalition to support Sushi

Summary

We are proposing the creation of a new development collective to align Sushi with long-term builders in the space. The proposed collective – called the Poke Bowl – would be comprised of DAOs and other ecosystem groups, organized by Ondo Finance. The proposed leadership would be composed of uncompensated volunteers: we believe in Sushi’s role as a public utility in the DeFi ecosystem, and want to align its execution with its long-term success. One of our first action items would be to form a formal on-chain DAO and a legal entity for Sushi, both governed by SUSHI holders. We have additionally collected preemptive donation indications for the Poke Bowl amounting to $15m to fund Sushi’s development and compensate its contributors.

Sushi is well-positioned to be the strongest multi-chain hub for DeFi activity with a top-tier team, community-oriented brand, deployments on all major chains, diverse product offering, and the upcoming release of Trident. To achieve this vision, Sushi would benefit from partnering with long-term-oriented DAOs and leaders in the space. We have taken the initiative to put together a coalition of top-tier projects that have strong synergies with Sushi to steward its success. Joining us are Frax, Synapse, UMA, NEAR, and some exciting other partners we will disclose soon.

Ondo Finance is an open, permissionless, and decentralized investment bank. Ondo’s core mission is to service and connect various stakeholders in the emerging DeFi ecosystem — including DAOs and increasingly institutional and mainstream retail investors — through fully on-chain services. Ondo has built a variety of products and services on top of Sushi that can extend its utility and reach. You can read more at our docs.

We have assembled a group of DAOs providing products that are highly synergistic with Sushi, and we plan to leverage this group’s offerings to amplify the reach and utility of Sushi. Stablecoin powerhouses like Frax can inject liquidity into Sushi through Ondo’s liquidity-as-a-service offering, Synapse and cross-chain Ondo vaults can solve for Sushi’s fragmentation of liquidity, and UMA can build customized financial products for DAOs in the Sushi ecosystem. Together, we can help Sushi realize its vision of creating a community-driven DeFi suite of complementary products and services.

Proposed Structure for the Sushi DAO

At the time of writing, Sushi has not yet formed a true DAO governed by SUSHI holders. The Poke Bowl initiative would formalize Sushi’s commitment to decentralization by formalizing a DAO with direct on-chain control by SUSHI holders. SUSHI holders should be able to propose, vote on, and implement contract changes without as much reliance on multi-sig holders.

Further, off-chain assets that belong to SUSHI holders such as the Discord server and Twitter account are held by a variety of current and in many cases former core contributors. It is imperative that the Sushi DAO have control over these assets. To that end, we’re proposing to create an off-shore legal entity that would hold all off-chain assets and manage off-chain activities, acting only to facilitate the Sushi DAO’s interactions with the off-chain world according to the wishes of SUSHI holders.

Now, let’s turn to why we at Ondo are well-positioned to help steward Sushi through some of these necessary changes.

Why Ondo

  • Shared vision for DeFi’s potential. Ondo and Sushi share a similar vision of bundling various DeFi products and services, with Ondo specifically contributing some new services geared towards DAOs like liquidity-as-a-service.
  • Ondo can help unify Sushi liquidity. Sushi liquidity is fragmented across many different L1 and L2 blockchains and Ondo vaults will soon be able to aggregate this liquidity and match it to a wider set of investors.
  • Ondo’s team is public and vetted. Sushi has struggled with getting rugged by anons and would benefit from leadership by a doxxed team funded by top tier crypto investors such as Pantera, Genesis, DCG, CoinFund, The LAO, Chapter One, CMS, Stani Kulechov, Richard Ma, and many more investors who will soon be announced as part of a subsequent financing round.
  • Sushi Development Fund. The current Dev Fund requires a community vote to pay devs. This has unfortunately led to contentious, very public votes on developer pay and core devs leaving the protocol. We are proposing a dedicated fund for devs that would allow Sushi to compete more aggressively for dev talent.
  • Proven Hiring Abilities. The Ondo team has approximately doubled in the last two months, growing from 7 to 15 individuals, with new joiners from top protocols and web2 giants. We can help to reverse the drain of talent that Sushi has recently experienced.
  • Ondo brings new investors into Sushi. Institutional and mainstream retail investors are moving into DeFi and the Ondo team has the products and relationships to build on Sushi’s status as a hub of DeFi products and services.
  • Improved treasury management. Ondo can help promote proper management of the multisig dev treasury by ensuring a mix of assets including stablecoins are available to pay the developers and the community, and help reverse the recent trend of core developers leaving Sushi for higher compensation elsewhere. We can also help Sushi to invest the treasury to ensure its sustainability. Any changes would follow governance votes approved by the community.
  • A broad and united coalition to help ensure Sushi’s future. Ondo has assembled a coalition of support from leading DAOs, investors, and other ecosystem participants aligned in bringing more transparent and long-term oriented governance to Sushi and in expanding and solidifying Sushi’s influence in the ecosystem.

$15m+ USD Contribution for a Sushi Development Fund + Other Incentives

We have gathered preemptive indications for an initial $15m donation to the Sushi community to compensate developers and other contributors. Frax and some soon-to-be-announced contributors would be generously providing these funds. These funds would be earmarked for spending over an approximately four-year period. The primary goal of these funds would be to better compensate contributors and to expand the core team. None of these funds would be distributed to leadership from Poke Bowl or its governing members.

In addition, Synapse is committed to providing $SYN incentives to create deep cross-chain liquidity on Sushi to double down on Sushi’s leadership in expanding to many blockchains.

Product Synergies To Revitalize the Ecosystem

A close partnership between Sushi, Ondo, Synapse, Frax, UMA, and others brings together a full menu of DeFi offerings for DAOs. Ondo has been working closely with Sushi since Ondo’s launch, is already built on top of Sushi LPs, and is ready to work with the core Sushi team on integrating future offerings.

We outline in the following sections how Ondo is positioned to dramatically enhance Sushi’s offerings.

Ondo’s Structured Products Extend the Benefits of SushiSwap’s Onsen

Ondo’s products extend the utility of Sushi’s LPs and allow for deeper liquidity and wider adoption in a cross-chain environment. Ondo’s structured products aggregate SushiSwap LPs together to transform them into various return profiles suited to different sets of investors, thereby enabling more investors to provide liquidity to Sushiswap.

As part of its cross-chain expansion, Ondo is working on building vaults that provide a single point of access for an investor to provide liquidity to many different Sushiswap LPs across many different blockchains. This dramatic simplification in managing cross-chain liquidity is crucial for Sushiswap to continue its cross-chain expansion and dominate the AMM landscape.

Liquidity-as-a-Service Pairs Well with Sushi

Ondo’s liquidity-as-a-service pairs naturally with Sushi to enable DAOs to launch, distribute ownership, and establish decentralized exchange liquidity in their tokens. An issuer can create a vault through Ondo’s liquidity-as-a-service so that some minimum amount of liquidity is effectively guaranteed for the life of the initial vaults and the community knows that liquidity cannot be rugged.

Ondo has meaningful deployed and committed liquidity and rewards from stablecoin issuers Fei, Frax, and Reflexer that can be deployed into brand new LPs on Sushiswap as part of liquidity-as-a-service. You can read more about these launches and commitments at the following links:

Fei liquidity-as-a-service announcement
Frax-as-a-service announcement
Rai-as-a-service announcement

Kashi Improves Capital Efficiency for Ondo Vault Investors

Ondo will soon enable tokenization of its tranches so that investors can trade them on secondary markets. In addition to trading on Sushiswap, these tranche tokens could be pledged as collateral inside of Kashi lending markets so that investors could lever up their positions in Ondo vaults, ultimately getting liquidation-free leverage on Sushiswap LPs. With Frax’s unique AMO design, Frax will be able to mint newly generated FRAX directly into Kashi, allowing users to borrow against their collateral at competitive rates. This novel use case with seeded liquidity will bring life into Kashi, establishing it as a core Sushi product and revenue generator for SUSHI holders.

Partner DAOs & Groups

We are putting forth a temperature check to gauge the community’s interest in embracing this initiative. The DAO-led coalition organized by Ondo would include communities like Frax, Synapse, UMA, NEAR, and more.

Poke Bowl members have consulted with the Arca team would plan to keep many of the items they suggested in their previous proposal especially around product teams. A formal proposal after a successful temperature check would include more details.

This proposal primarily seeks to assess community support for the establishment of the Poke Bowl and formal on-chain governance by SUSHI holders in an on-chain DAO. We welcome ideas, thoughts, and other feedback.

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The Ondo team (and partner DAOs) will be here to answer any and all questions! We’ll also be watching the Sushi Discord(s) and will be available there.

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How much Sushi is currently owned/held by the members of the collective?

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Before addressing any structural change that may impact decision making process, we need to ensure that a new Board of Directors (or equivalent Governance Group) with multi-stakeholder representation lead ad-interim the change (see https://forum.sushi.com/t/board-of-directors-of-guarantees-for-interim-governance).

With the regards to legal entity for off-chain assets imho it should:

  1. be a not-for profit entity, pursuing a higher level social mission, made up by guarantee board and dissolution clauses that guarantee continuity of SUSHI “whatever happens”
  2. it must be incorporated in a country with very high standard of legal efficiency (e.g. Norway or Switzerland), not in an offshore jurisdiction

An operational Legal Entity, could be on-purpose-built off-shore one, required to carry on practical operations such as paying salaries, etc, etc.

Fabio

Thanks for putting up a proposal. I feel it could have been timed better. We have just learned from the previous process, that piling into a ‘partnership’ without dd is not the wisest.

The Sushi community should be given time and space to align our team, community and stakeholders before deciding on any partnerships imo. It would be helpful if this wasn’t influenced from the outside this time.

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This is not just a partnership – we’re proposing to take the lead in creating a formal on-chain DAO and legal entity for Sushi. Sushi in its current state and maturity should not be led by a single individual or with centralized multi-sigs.

You have consulted with arca as you said, the community would like input this time imo.

Rushing through an arca backed proposal on the basis of outside help knowing what’s best for sushi didn’t work well last time and I hope we see a more inclusive process this time.

If you have joined the discord server for discussion you will have found that the sushi OG’s are working through establishing all pain points before casting judgment on what will improve and fix these problems. In my mind that is a more sensible approach.

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100% agree. The current organizational situation is less than a week old and we need time to fix the team, pay the devs, find a leader. Having a DAO control another DAO at this point is a level of abstraction we are not prepared for . . .

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Hey, @mountain_goat thanks for the reply! Yes, we definitely want the community on board. I can’t speak for Arca, but nothing is ‘Arca-backed’ just yet. We had an intro call to learn more about Sushi’s status and their thoughts on the best path forward.

I know we’re chatting on Discord now but just wanted to respond publicly here as well. Thanks again!

Thanks for the reply @probatacta! From our perspective (and it sounds like you agree too) there are several problems that need to be addressed. It’s our view that our coalition’s leadership and Ondo, in particular, can help fix the problems you laid out.

We don’t view this as a DAO controlling a DAO. We view it as creating the first true on-chain DAO for Sushi stewarded by Ondo and our partners. Sushi would be our priority.

I do not want to crush this proposal from the beginning. But it does feel similar in effect to the proposal that just fell apart as a result of failed due diligence, failure of leadership, and some level of incompetence on both.

I’d prefer Sushi to get a leadership in place first. A high quality and respected leader with a combination of web3 and business experience would be best.

Once that is in place, that person can work on prospective deals.

I have not read the full proposal as I’m about to get on plane. But I think we got distracted by the last proposal, to the detriment of sushi as a whole. This feels too similar.

I aim for leadership change before what is essentially another merger.

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Without commenting on the merit of this proposal, the timing isn’t right.

Currently there’s a good process underway to chart a way forward for Sushi (the users, community, team and investors). This is currently moving along well and this proposal will have a place in that in the near future, together with all other proposals on how to take Sushi forward.

If this is here as a request for comment to refine the proposal to be ready to be submitted when Sushi is ready to compare different proposals on how to move forward, then that’s great! The more option we have, the better.

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Have to agree with Boring on this - timing is not right.

Having said that Ondo looks super interesting, is this like a ‘web3 version of Open Source Collective?’

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Let’s just ask the community, do you want to hand Sushi over to Ondo?
(please refrain from voting with heaps of alts… we’ll discount those votes anyway)

  • Yes
  • No

0 voters

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These Ondo guys are incredibly aggressive in pushing for a snapshot vote and at the same time avoid giving specific answers to dozens of relevant questions.

They obviously have a whale in their pocket to buy the vote so I don’t think we should provide them with that opportunity.

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I would like to point out that in no way does hiring 8 people in 2 months strike me as “proven hiring abilities”. Unless they literally mean they feel the capacity to email an offer letter is one of their key highlights & accomplishments thus far.

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Strongly agree with @BoringCrypto – the timing is not right.

– SUSHI needs no legal entity at the moment, the benefits are negligible. Probably the other day when we become that huge to deal with off-chain investments.
– The full list of participants is not made open, only few were named.
– Becoming just a party under third-party governance is no-go. We have enough firepower on our own.
– Having a refined on-chain governance model is good. The less depends on human factor the better.
Right now we have a problem that 150k SUSHI needed to get a proposal to snapshot. And snapshot voting strategy does not count for individuals in community but for the amount of money. Thus allowing to buy/borrow xSUSHI buying the vote. This should be changed one day.
– They are ready to invest $15m. Not much. But still appreciated

To sum up, there’s a better approach to partnership. And now is just not right time for big moves.
SUSHI needs to regain its strength first

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Lots of buzzwords like “on chain”, “liquidity pools”,”$15M for devs” etc but I dont know how this proposal actually plans on running things?

  • whos in charge?
  • how are you improving engagement on the platform?
  • how will operations be managed? Hiring, firing, development cadence, payroll?

These are the paramount issues to sushi right now

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I get that we’re all really burned out from recent events, but taking a step back - the combination of this coalition + sushi core + sushi community is insanely powerful.

The framing of this question is absurd and this is not at all what this proposal is seeking to do. We’re disappointed that one disgruntled community figure would misdirect the community like this.

We’re hopeful that the process will play out and that the SUSHI voters will be heard! On to a brighter future for Sushi! :sushi: