This proposal aims to invest fees that Sushi earns into a liquidity pool consisting of Network Gas Token and Sushi, then burning the LP. Network Gas Token is Eth on Ethereum network, Matic on Polygon network, FTM on fantom network, etc. All users of the Sushi ecosystem will be systematically benefited, including Sushi, XSushi, and yield farmers by building a robust well of liquidity creating a theoretical price minimum above 0 dollars.
Protocols have tried burning tokens in the past and it didn’t stop the value of them from dropping to 0. This is because regardless of how many tokens are in circulation, if there is no locked or burned liquidity, the providers themselves can withdraw and sell all liquidity causing the token price to plummet to 0. Using SushiSwap’s fees generated across various blockchains, we can purchase a 50/50 combination of Network Gas Token and Sushi, then pair these as infinitely bounded liquidity and burn the SLP. As long as the network tokens that Sushi is paired with do not drop to 0, then Sushi will have a theoretical minimum price above 0 dollars as well.
Owners of both XSushi and regular Sushi will gain token value and liquidity depth as fees buy and burn LP. Many users have Sushi sitting in contracts and are unable to stake into XSushi. These users have previously seen zero benefit from exchange fees. By changing how fees are spent, we create a bottom-up foundation benefiting the whole ecosystem in aims to create a positive feedback loop, increasing price, liquidity, and volume.
An additional motivation is that we will vastly increase Sushi liquidity depth cross-chain.
The allocation of fees for XSushi will instead be spent on purchasing and burning liquidity once the year’s timeline pause is up. Fees generated on each chain will be spent as shown:
Fees generated on Ethereum will be used to purchase Eth-Sushi SLP and then burn it.
Fees generated on BSC will be used to purchase BNB-SUSHI SLP and then burn it.
Fees generated on Fantom will be used to purchase FTM-SUSHI SLP and then burn it.
Fees generated on Optimism will be used to purchase OP-SUSHI SLP and burn it, and so on.
Fees will be used to purchase and burn multi-chain liquidity
Fees will be used as previously stated.
([poll type=multiple results=always min=0 max=1 chartType=bar]
- I want to gain multi chain-traction! Boost the value of my sushi!
- I’d rather stake XSushi