I agree with everything you’ve said except the first sentence.
In what world is ‘Sushi performing well despite the market condition’? Maybe as a team member you’ve got in early, but not everyone did. I wouldn’t call a coin which price is 1/17 from ATH, as performing ‘well’.
And before you mention other projects are faring similarly, no they are not. Curve, which has comparable marketcap to Sushi, is 1/8 from ATH currently.
It’s a bad attempt to clean up past bad decisions.
Instead of focus on volume, on your product, you will penalize all long-term believers on $SUSHI just to be sure you can have your salary again one new year. It’s the only reason I see to spend $5M USD.
Paying $300 / year by employee ( without bonus ) just to add some effect on the UI, sponsoring a lot of crypto - events around the world ( + travel cost etc… ), IS NOT A GOOD WAY TO SPEND MONEY !!
If I remember correctly, here is the last data I had about the cost that Sushi need to pay :
1 470,00 $US
13 133,50 $US
1 867,32 $US
1 219,60 $US
19 874,94 $US
With this table completed, I believe the cost is less than $200k / year .
So, guess where is the $5M needed ?
Of course, you are depriving ALL old-long-term holders . How can you say the contrary ?
Tell me a strong reason why people will buy $sushi if they can’t make money with xSushi + if the volume is bad ( compared to others dex, not because of the bear market )
You will lose too much people, the damage will be irreversible.
So, you have time to improve Sushi, from now to Dec. 2023 .
And by improving, I mean attract more volumes, because Sushi lose the war. It’s catastrophic. Even in a bear market, the market share against other dex is decreasing quickly.
Aside from a reduction in wages and shipping more competitive products, I would like to add one thing Sushi can easily do which seems to have been neglected: Grow TVL on other chains where there is little/no existing competition. With Sushi’s established reputation as a safe platform, others would trust it over other no-name emerging AMMs on other chains.
Sushi is a market leader on the Arbitrum chain which I have to commend the team for achieving. However, what about other promising chains like Optimism? We let other newer AMMs like Velodrome conquer market share when Sushi could have easily seized it had it been a priority.
I’m glad you mentioned Arbitrum, this was a great archievement in doing a lot with a little, and taking full advantage of first mover.
Unfortunately, previous leadership soured the relationship with Optimism and we lost our chance at a first mover advantage there. Relationship has been rekindled and Optimism recently approved an eco-system grant to bring LM to Optimism for Sushi, so we expect to make some ground there shortly.
The capital return from operations is a primary reason I am invested in SUSHI and even more so why I am holding during a bear market so that I can accrue while prices are low. If you remove this, it largely removes one of the main reasons people hold SUSHI.
As you can see from the underperformance today alone, investors will not appreciate this. I am against.
If this pass, it will be the end of Sushi.
Please take the time to learn on the protocol and see where it come from and why it exist.
Sushi was a Vampire attack on Uniswap to kill the corporate idea of the AMM.
The xSushi idea was the core of the protocol to redistribute a part of the revenue to the believer of the protocol. If we remove the fee to the xSushi, it will push everyone to sell their Sushi which will bring even more pression on the tokenomics.
Just review the wages and please stop paying random dude 500k USDC per year. It’s ridiculous.
The temporary Kanpai fee adjustment is a necessary requirement.
Sushi has four primary problems:
The treasury value presents a barrier to onboarding new partners.
The treasury is not diversified. As such, if Sushi has to market sell the native coin it will cause a vicious downward spiral.
Sushi is a growth company that requires strong R&D to succeed.
The xsushi mechanism is broken.
Put simply partners don’t want to take solvency risk. Any business partner, integration partner, large LP, institution, etc. does not want to take solvency risk with 1.5years of runway. This alone serves as a headwind against sushi that should be solved. It has nothing to do with the team, or market, or product this boils down solely to the psychological impact of numbers on a screen. We should solve this problem & the Kanpai adjustment does just that.
PS: I’d reckon we’ll see $sushi trade at a higher multiple with a more stable balance sheet so that the value of $sushi appreciates.
Right now the treasury wallet consists of: 12.3M $SUSHI. There’s around 200k in USDC as well. The ratio of native coin to stable is appalling. There should be a significant stable reserve & it’s poor management no one has previously worked to get the treasury diversified. Selling $sushi to make ends meet is the exact opposite of being confident in the native coin. So we shouldn’t do it & seek out efforts that prolongs or ensures that never has to happen. Kanpai adjustment helps this with the inflow of stables & ETH.
Uniswap has $1bn+ treasury, $100M+ from vc raises, and 100+ employees. + paradigm and other sophisticated backers trying to push it forward.
Sushi meanwhile has a CEO & 6 devs, 2bd, 1 marketer, 1 designer.
We aren’t in a Disney movie. Sushi needs the ability to fund R&D + rapid product development.
The xSushi payout is siphoning resources that should be used for R&D & product innovation.
This doesn’t mean the end of value for the 20% of holders who partake in xSushi instead it means investment in great product will deliver & the price of $sushi likely appreciates. Will there be short term sell pressure? Perhaps, but the effect of which is overstated.
Xsushi is a terrible mechanism especially in the environment we’re in right now. Stakers market dump their served $Sushi in an attempt to recoup their losses. Idle $sushi is not used & of course it siphons away $$’s that could be better invested.
Xsushi serves as a headwind to growth and should be temporarily paused while it is reworked and the above problems are solved.
Honeslty im shocked and a little (a lot?) disappointed that I took some time off from all this nonsense and i come back to see we spent all this money to bring in a new chef who just argues for the same old stuff.
There is nothing in this proposal but buzzwords and filler. No projections on what a 1 year 100% kanpai would generate for the treasury, nothing about what that additional funds would do for Sushiswap, nothing about what value it would create for Sushiswap or tokenholders in general. Just simply a “hey we need money and this will run for a year or maybe longer bc things are broken and we will have a new plan soon i promise”.
If you told me this would run in a defined time (1/1/23 to 12/31/23), autorevert at the end, raise $5M additional for the treasury and that would go into hiring an additional dev at $300k/yr who would work on producing X product in that has a TAM of Y and we expect to be able to capture Z% of that then ok thats a business proposal. We can spec that out and see how we are tracking on that goal in 3, 6 and 12 months. Instead we get zero detail. Do you really think this has appropriate detail for such a major change? I dont. In its current form all this is, is a grab. (And this is coming from me who previously proposed a compensation accrual here so its not like im against funding comp via swap revenue)
This whole thing is just disappointing and a lot less polished than I would have expected having finally implemented a head chef.
I appreciate that there is a lot of discussion around this proposal and I understand that we are in a really tough position but I hope that the community can come together to help us continue to grow as a community, protocol, and business. Sushi fundamentally stands for open and fair access to financial tools and I know we are all aligned with that goal.
Having worked in VC, traditional tech, and now Web3, I can attest that the overall runway expenses outlined by Jared are pretty much in line with those of any other comparable Series A or B company regardless of market cycle. Whereas salaries do make up a significant portion of expenses, we also lack many other expenses like insurance costs, employee benefits expenses (none of us have healthcare), office space, or even equipment expenses. On top of this, we have a highly specialized product set which requires very specific skills and maintaining our internal talent in an incredibly competitive industry is expensive. We have to compensate talent accordingly because as good as it feels to work on the future of finance, no one works for free.
The Sushi team currently sits at just under 20 full-time contributors who work around the clock with minimal resources to push the protocol to grow whereas our major competitors have magnitudes larger teams and warchests. Right now the runway outlined by Jared allows us to operate Sushi AS IS. This doesn’t factor in hiring new headcount to alleviate our already stretched internal resources, pushing for more marketing content, or even pursuing our R&D roadmap as it gets more complex (x-chain swaps, non-EVM, perps DEX, etc.). For example, we only have two people managing BD whereas Uniswap’s BD team is larger than our entire Sushi team. Meanwhile Sushi only has a marketing team of one full-time contributor and often our integrations get hamstrung by the fact that we don’t have enough engineers on hand to do the technical work. If we want to be able to compete with the likes of Uni or Curve, we need to grow our team so that we can take on more complex, high value initiatives across the space. If we can’t grow we can’t compete. If we can’t compete, what’s the point?
Unfortunately, past leadership’s decisions have left us in a position where our underlying business model is not able to sustainably capture the value that we are creating, and frankly we spend a lot of time here fighting this point. As the BD lead for Sushi, I see this every day when talking with our potential partners, it feels like we have to fight tooth and nail to just be sustainable. While we wait for new tokenomics it makes sense for us to redirect Kampai fees to the treasury so that we can continue to run as a protocol and business (although I do agree with @pocketsquare that more hard numbers are needed in the final proposal). Even if this causes a short-term decrease in $Sushi, it’s far better IMO than us fighting until we run out of money and Sushi goes to zero.
Hello, longtime crypto user and previous contributor here, just want to chime in.
Often projects struggle in market downturns, it’s unfortunate to see that this has happened
Rather than debate over the specifics I think it’s important to focus on the big picture.
Sushi started as a fork and is still little more than a fork.
Evidently, little of value has been accomplished.
For example, Shoyu, Sake, Kashi, Bentobox, MISO - nobody talks about these things anymore; nobody cares about them.
Usage metrics are abysmal.
Come 2023 I think the hard choice should be made to wind down Sushiswap.
Keeping a failed project up is a lost cause.
Endings are not always sweet, but it’s crueler to encourage false hopes.
Reconsider the proposal in this context; don’t drain the community anymore.
The problems are the same problems. Everyone who has come in and got their hands dirty has said the same thing after investigating.
Past management kicked the can down the road, didn’t solve the hard problems and has left a mess. I am happy to see Jared confronting the hard problems head on.
The simple act of pointing xsushi payouts to the treasury is the item that needs to be solved first.
Annualizing current fees will generate approx 6.5M to the treasury. (You’re obv aware this is volume dependent).
That’s the first step that aids the goal of shoring up the treasury. From there, what to do with the $ & how to invest it & when is enough diversification/assets in the treasury sufficient, should be decided by tokenholders.
Thats fine and like I said i’m not against funding additional compensation etc from swap revenue - but this is no different approach to trying to fix it that the broad and directionless proposals from the past. Just saying ‘we need to throw more money at it’ isnt good enough of a business plan for such a major change like this. Things that should have been in the original proposal:
Start and end date (cant have a wishy-washy ‘until we figure out tokenomics’ bc that will turn into nobody ever addressing it and kanpai staying in place forever)
Estimate of funds raised based on projected volumes
What will the funds be used for specifically (ie we need BUDGETS)
What are the deliverables and dates? We need to track that this is successful in doing what we expect it to deliver if you want to renew it for subsequent years
Why 100%? Why not 25%, 50% or 75%? Show us that some thought has been put into this
Also we need to get over this whole “diversification” thing. Having cash + SUSHI is all we need. We dont need to buy other coins. Do companies buy stocks of other companies when they feel like their own stock is undervalued? Why should we remove the implicit buyback from our own token when things are most depressed? I feel like that shows a massive lack of faith in our own project.
Also the whole concept of ‘then we wont need to sell any SUSHI’ doesnt make sense. You would be removing the buyback so that would negate any removal of equivalent sell pressure. You cant just pick the 1 side of the transaction that suits your argument.