Proposed by: Trantor (plus community feedback)
Thank you to all of the wonderful sushi supporters and community members who have reached out to me in private to voice their support for this proposal and to make helpful comments and feedback. This RFC attempts to take that feedback on board and move forward in a more productive and measured way.
Establish a Sushi governing council comprised of 5 members, who have been elected by the Sushi token holders, to decide on the future of the Sushi DEX and the Sushi token. The implementation of any new tokenomics, incentives or other strategies for the DAO moving forward, will be discussed and proposed by the council for decision by the DAO. Establish the Sushi chefs as Service providers to be funded by the treasury in accordance with the decisions of the council. Cease Kanpai 2.0 and implement 100% of fees to staked Sushi holders.
Since the inception of Kanpai 2.0 in December of 2022, the Sushi token has lost its primary purpose namely receiving the generated fees earned by the protocol. Instead, 100% of fees taken now go to the treasury to build up the treasury reserves. In addition, the emission of sushi tokens has nearly completed with remaining emissions scheduled to end in the next few months(Nov/Dec 2023). Whilst this may have helped in ensuring that the treasury received funding, the token holders have lost a significant portion of their utility. Much of this has been a result of the difficulties of managing a DEX during a period of declining crypto interest throughout the recent bear market. Therefore, due acknowledgement must be given to the Sushi team for their work thus far and their commitment to reducing costs.
A review of tokenomics and forum discussions over the past 12 months indicates a serious lack of community engagement and interest. With limited new features or updates of note being implemented by the core team of Sushi since the inception of Kanpai 2.0, this has created an environment where community voices are rarely marshalled in sufficient quantity to make a difference. (As a counter to this point please see the responses in Discord from Jared where he discusses CL, xSWAP and smart pools)
Simple analytics suggest that the TVL on Sushi has declined from peak TVL from over $8B down to a current TVL just above $400M. Whilst this may be understandable in a bear market, it has also seen a significant decline in the total fees, TVL and active users over the past 2 years, especially relative to peer competitors such as Uniswap, Balancer, Curve, Pancake swap etc. This has seen a relative decline from a top 5 DEX to 17th by trade volume and a significant decline in token price and user activity. Please refer to defillama for more details.
Many of these markers of poor relative performance may be as a result of the initial tokenomic weakness of sushi swap or a result of turbulent governance. Whatever the reason, the community has the ability to alter the course of Sushi and to decide on the strategy to take us into the future. Please note, that the work done to increase the value of the treasury has provided Sushi with significant benefit and runway to support operations. This proposal is not suggesting that anything has been nefarious, but instead is implying that sushi has the right to govern itself as a DAO and to “choose its own adventure”.
The above statements may appear overly strong, but without a closer look behind the scenes and clarity on future designs, plans and options for the sushi token and the DEX, it is impossible to maintain blind faith in the team and what has been achieved so far. Instead, the true design imperatives of the DAO should be adhered to and the importance of token holder decisions needs to be centre most to the future of the DEX.
I have named this proposal Sengoku-Jidai, after the Japanese warring states period, to reflect the importance of Sushi marshalling our resources for the challenges ahead!
Enable the Sushi DAO community to take ownership of their own destiny to capture greater market share, trade volume and new tokenomic designs. This can only be achieved through empowering Sushi token holders and allowing the DAO token to find its own true value based on the tokenomic design. This design must be decided upon and discussed by the DAO through the mechanism of the token holders.
- Immediately cease Kanpai 2.0 and revert to the previous model with 100% of fees going to xSUSHI stakers.
- Establish the Sushi Governing Council through direct elections.
On approval of this proposal, implement an interim governance solution where all DAO activities are to be voted on using snapshot in a direct governance model. This will cease once a governing council has been elected and a more representative style of governance can be implemented.
No later than 15 days after the approval of this proposal, post a vote to elect a new governing council of 5 members who will have the following responsibilities:
a. Establishing a new governing constitution
b. Publishing a state of the DAO to cover expenses and treasury,
c. Confirming the roles, responsibilities and funding of the Sushi team,
c. Publishing a roadmap for discussion on new tokenomic models,
d. Manage votes and snapshots and define criteria for when decisions need to be taken to vote or handled by the council.
This governing council should only serve for a total of 6 months to allow for rapid implementation of any new ideas and to ensure that sushi swap is best placed to make changes and adapt to the impending bull market. After the initial 6 months is completed, the governing council are to facilitate another round of elections to ensure the council remains relevant and representative of the DAO desires. This proposal does not align with the recent tokenomics upgrade proposal and would seek to put that discussion and design on hold for decision by the governing council.
Membership of the governing council:
The purpose of the governing council is to act as representatives of the DAO and to act in the token holder’s best interests at all times. There should be no daylight between the desires of token holders and the governing council, and where differences exist, token holders can vote to remove councillors. The purpose is to push the DAO towards a more decentralised model and to focus on innovation and capturing market attention and value.
The 5 person Sushi governing council, will be made up of individuals who have volunteered to serve in their roles and have been elected by xSUSHI holders. Anyone can apply to become a council member before the initial vote by applying before 31 December on the Sushi forum (date TBC, 15 days after proposal adopted). There are no exclusions and core team members are also eligible to apply. Notably, the purpose of the Governing council is to represent the entire DAO as manifested by the token holders and every other aspect of Sushi operations and governance must be subordinate to this group.
I would once again like to thank the community for the many notes of support in putting this proposal together and for amendments to both the tone and the scope of this RFC. For clarity, I have accepted a role with RAMSES exchange and at this time will not be seeking a position on the council as there may be a conflict of interest. I do believe strongly however, in DAO governance and the future of Sushi Swap!
For: Implement new interim governance procedures, establish elections for governing council to occur no later than 31 December.
Against: Do nothing/ no change