Ondo Dreams of Sushi
Assembling the Poke Bowl: a DAO-led coalition to support Sushi
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.
- 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:
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.