Sushi 2.0: A Restructure For The Road Ahead

Background
Sushi was the darling of 2021, we as a community made a name for ourselves and established Sushi as a central product among our ecosystem. What started as a completely fair launch (90% of tokens released for the public, 10% for treasury), quickly transcended into a team & group of strangers that had no background with each other. We accomplished far more than we set out to in 2021 but the lack of operational efficiency & lack of focused attention towards the long-term was evident in the second half of 2021. Ultimately Sushi took a tumble, major turnover began and both the team and community was left a shell of itself.

What’s happened since the turmoil
With the failed Frog Nation takeover, the remaining team was left to keep Sushi running with major question marks. Community members took the lead to sort out the issues and establish a way forward along with a team motivated to keep Sushi alive. Thereafter, immense change and progress has been made in a short amount of time. Several months have been dedicated to picking up the pieces and working through tough discussions. What came of those trials is a long-term vision for what we believe is a bright future for Sushi and its community.

Product and feature releases during the reorganization:

Organizational progress happening in parallel:

  • A reorganization was conducted and a strong, loyal team has been retained and installed. Additionally, several new team members have been added.
  • Rekindled key stakeholder relationships and an external operations advisor has been appointed.
  • A fair compensation structure has been set-up, proposed, negotiated and completed across all departments.
  • A legal structure (SushiDAO) has been proposed and recently passed snapshot.
  • Emissions have continually been reduced to current levels, where on average Sushi is generating 3-4x in fees across its networks & protocols relative to sushi emissions.
  • Monthly spend from Ops has been cut in half from what was averaged during the previous summer and fall.
  • Prior proposals to introduce stability to the Treasury have been re-hashed, and brought to Snapshot. We’ll be emphasizing a disciplined approach to capital allocation & spend while ensuring requisite funding for innovative product development.

Coming Soon! Reasons to be excited:

  • Long term commitments by a comprehensive Sushi team
  • Executive & leadership search process
  • Increased transparency to budgets & checks via committee & community oversight
  • Concentrated liquidity on Trident
  • Stableswap on Trident
  • Stargate implementation for Omnichain Token Swaps
  • Furo Stream & Furo Vesting
  • Shōyu 2.0 Beta
  • Kashi Optimizer & Improvements
  • Adoption of Sushi 2.0 interface

Proposal Summary
This proposal is the first step to a promising & accountable future for Sushi. The proposal is effectively broken down into three actionable items to be voted on. First, retaining the talent required to bring Sushi into the future covering the entire functional spectrum of Engineering, Design, Business Development, Marketing, Community Engagement, Shōyu, Operations, and Advisory. Second, the establishment of a formal compensation committee to serve as a check in transparency and accountability for all budgetary matters. Third, with implementation of the proposal a formal executive & leadership search process will commence to compliment the team being retained.

Team Retainment
This proposal will earmark 6M $SUSHI with a 4 year time horizon to allocate toward:

  1. Current contributors allocation
  2. Future hire allocation
  3. A portion of the funds to fund future project strategy and leadership.

We will immediately retain a cohesive team over all functional areas required for true value creation. This proposal immediately expands the team from 4 to 10 vetted full time software developers across Sushi & Shōyu:

List of Team Members Retained:
I’m Software - Engineering Team Lead, Compensation Committee
JiroOno - Software Engineer
Sarang - Software Engineer
Chillichelli - Software Engineer
Ross - Software Engineer
Ilya - Software Engineer
CleanUpGuy - Software Engineer
Lufy - Software Engineer
Tangle - Community Manager, Business Development
0xBella - Marketer
Unagi - Marketer
Cabbage - Designer
Kastrye - Designer
Chester LaCroix - Designer
APE - Business Development
Pegbit - Samurai
RSK - Samurai
Maka - Samurai
Trudahmzik - Samurai
Zapacheenie - Samurai
Salman - Shōyu
Masayoshi - Shōyu
H4v1g - Shōyu
fejk/Ryan - Shōyu
Neil - Compensation Committee

We align the community and team with market rate compensation to reward long term value creation over the next 4 years.

Compensation Committee
The Compensation Committee will have several main jobs:

  1. Compensation negotiations
  2. Track TWAP and as well as approve the Roadmap based vested Sushi once the Roadmap is complete/or when individual items on the roadmap are complete.
  3. Help with compensation negotiations on future hires
  4. Observe the establishment of formal roles & responsibilities.
  5. Negotiate future compensation plans after the outlined ones expire.
  6. Review individual performance evaluations for pathways to contributor promotion, probation, or termination.
  7. Vet, approve, & disclose budget requests.

Initially we propose Matthew Lilley & Neil to sit on this committee as they have each been helping with the restructuring plan, interviewed all current sushi contributors, and have already begun negotiating Sushi contributor contracts.

The Compensation Committee will use a simple unanimous voting system for all committee matters.

  1. To determine if roadmap items have been completed in a satisfactory manner & in a reasonable amount of time.
  2. For distribution regarding price oriented incentive targets defined by 30 day TWAP price targets.
  3. For validation of performance reviews.
  4. Similarly, a Compensation committee will also support a unanimous voting system in the event a contributor relationship requires formal termination & offboarding.

Leadership Search
Sushi will commence a formal leadership & executive talent search. We believe the road ahead includes great executive talent joining Sushi. Over the next 90 days we’ve ideated a process to allow leadership & executive talent to surface and ultimately be appointed via governance vote. The leadership & exec talent candidate pool will be sourced through the community, through the team, through token holders, or through self nomination in Sushi discord & forums. We have a process to vet candidates and allow them to meet various stakeholders (team, investors, engaged community members) and evaluate for a strong mutual fit. Formally undertaking a leadership & executive talent search will allow Sushi to evolve long into the future and is a necessity for any growing organization.

Allocation for Leadership & Future hires
The 6m block of Sushi will enable Sushi to seek and retain new external talent & executive leadership talent to deliver on Sushi 2.0 Formal roles, responsibilities, budgets and hiring process will be established and approved by the compensation committee. Future hires & candidates for leadership may be sourced via existing contributors, via self nomination on the forum, or by nomination within the Sushi discord.

For community accountability, any contributor relationship including leadership or advisory can be terminated at any time via resignation or via governance vote. Any unvested, unallocated sushi that is not paid out to a contributor will be returned back to the Sushi treasury.

Costs
Forecasted compensation costs (retained contributors + roles needed to fill): 5.75m USDC (annual salaries) + 2.3m multi-year vested $SUSHI outlay (1 time) + 2.4m performance incentive $SUSHI (1 time if deliverables are met).

Though this is a large portion of the treasury, we would argue that there is no better use of the treasury than attracting and retaining talent to contribute to the protocol over the next several years. Currently Sushi has 4 fully employed developers across the Sushi & Shōyu products. A larger team is needed to build out the full scope of the community’s goals.

Expected Impact on Treasury
Current Treasury Balance:

Expected Inflows to Sushi Treasury from block reward: ~800K SUSHI

Expected Max allocation to current contributors, future hires, and future leadership: 6,000,000 SUSHI

Additionally, we believe that Sushi is actually in a healthy position based on remaining treasury and our recent treasury diversification initiatives. Sushi is currently generating, at a conservative estimate, based on last three months of data roughly $41.04 million a year in revenue that is completely being distributed to xSushi holders. With Kanpai, we have the optionality to further optimize our treasury strategy and effectively invest in future profitable growth of the DAO and its products.

With the current implementation of Kanpai that recently passed, the Treasury will have $4.1 million in additional inflow.

Foreword
This proposal addresses the most practical necessities to deliver a promising future for Sushi, enabling Sushi to operate on a multi year time horizon to deliver value for sushi stakeholders. It is not a stop-gap measure. It is the first of a series of proposals and governance matters required to usher in the next chapter in Sushi. This is the starting point for a fruitful road ahead for all Sushi stakeholders & the Sushi community. The expectation to follow is constant progress, operational excellence, long term value creation, and first rate transparency for Sushi & the community.

In addition to this proposal, the team has collectively worked together on a long term roadmap & vision for what we would like to accomplish for Sushi. The roadmap will be located below, and is separate from the three components that will be a part of the formal proposal to be voted on.

We look forward to everyone working through our proposal, our plan, and the subsequent discussions to follow. The team is highly committed, hungry, and excited to get to work on bringing Sushi back to where it was and well beyond.

私たちを期待してください

Roadmap below:

  • LFG Sushi 2.0
  • Nah

0 voters

11 Likes

Let’s Fucking Gooooooo

19 Likes

Hello,

I am really happy that the team have found this proposal !!

It seems that everyone can be happy with it, and the community will probably follow.

I am 100% behind it, and I wish the best for all people who work for Sushiswap !

18 Likes

Yeahhh boiii, love it! :raised_hands:

14 Likes

great proposal, LFG!

11 Likes

Being a community member & $SUSHI holder that organically got involved to help pick up the pieces…I could not be more excited.

This is a team that has been solving extremely hard problems without pay.
This is a team that knows where Sushi has been and what potential can be realized.
This is a team that is embracing bringing in new leadership & new talent.

The best days are ahead for Sushi. Retaining a team that is already familiar with the Sushi products, partnerships, and codebase makes this a huge win. This is a team that is capable of shipping the next generation product suite & everything that goes with it. The commitment to growing & evolving & making constant improvement is electrifying.

Now the hard work begins but I could not be happier to see this group work to take Sushi into the future.

11 Likes

Love to see it ! Great proposal and very detailed roadmap.
Let’s go sushi :sushi: !

6 Likes

I’m hopeful. Let us know how the community can help achieve these goals.

There is one thing, that I don’t quite see in this proposal, but it feels like it would be helpful long term. Some way to include a SUSHI buyback campaign. Maybe streaming, where the treasury is gaining sushi over time.

Maybe this is part of the Kanpai proposal. But it would give stakeholders some greater faith in the system if Sushi was accumulating. Kanpai: Bear Market Protection with Treasury Revenue.

This suggestion, may be better for future discussion, rather than part of the restructure plan.

6 Likes

You want to ‘earmark’ a bigger half of the treasury for a non-binding promise of future performance that doesn’t really depend on any deliverables.

What are you going to do, when sushi price reaches 1$ (and it will, if btc revisits 20k+). Are you going to sell the allocation now, to secure USD value of salaries proposed?

How can you be sure, that the fees generated in the last cycle can be replicated within current environment that lacks irrational exuberance of a bull market?

How can you expect people to agree to give you so much money before even demonstrating the mechanism of accountability and transparency you claim to implement ‘some time in the future’? Do you get to enjoy the monetary reward all the while such mechanisms are ‘being developed’? In that case, that development has no incentive to reach fruition.

So you want to plunder the treasury within two years, because ‘no better use for it’?
Seems like new wonderland guys had a tame proposal in comparison.

I guess this is the time to congratulate our establishment friends. They truly got what they wanted in the end.

6 Likes

Very detailed post. Would love to have seen more actual release dates. Overall seems like a positive restructure and that sushi is headed in a positive direction. Looking forward to seeing some results.

2 Likes

Great proposal! Really happy to see this finally coming to fruition.

Questions on a few aspects:

  1. Can we get some color on who the outside advisory is and how that will fit into the organization?

  2. Are there any plans to improve transparency into the organization for Sushi tokenholders? Thinking along the lines of

    • Standardized financial and KPI reporting
    • Quarterly comprehensive update calls with reports from key divisions and Q&A
    • Tokenholder board of directors or appointed, trusted community members that can act as proxy for the average tokenholder

Love the progress made in the last few months of turmoil. Keep it up Sushi friends.

4 Likes

Thank you for the thoughtful proposal! A Compensation Committee is a great governance mechanism to ensure efficiency, reduce voter fatigue, and incorporate expertise, as long as it is well-designed.

Will there be an election of additional community members? It is important for the majority of the Committee to be made-up of elected community members. This ensures accountability and independence.

Will compensation for executive leadership be disclosed and approved directly by the community? It is critical to define which positions are entirely under the Committee’s purview and which are subject to direct community vote.

Until the Committee is independent (i.e., mostly community members) and elected, you should disclose the details of the individual compensation package so the community knows what they are approving (rather than aggregate levels). Can you share those details?

Kudos on the use of performance-based incentives! We would be interested in understanding the details and mechanics of the performance incentives.

Looking forward to learning more about the Committee structure and scope! Happy to assist Sushi and the community on any compensation issues.

C3: Crypto Compensation Consulting

1 Like

I agree partly with Graine’s cynical view.

I don’t believe BTC will revisit 20k, but Graine points out some significant concerns.
The last few months have shown a lot of uncertainties. Uncertainties in SushiSwap’s future, uncertainties in the team (especially with the Joe fase) combined with the lack of transparency and the increased backrooms talk.

Please don’t get me wrong. Transpercay is improving (I like @Trudahamzik notes), but it can be better with a proposal like this am I curious who contributed to what part of the proposal. I personally want to see how the members of the Compensation Committee will measure/track their work and how to prevent conflict of interest and friend politics. I also want to see IF Compensation Committee become a thing; how are they going to rapport their work, I am asking this because if person A disagrees with Committee’s conclusion I want to read that.

Furthermore, I agree with @Graine that the market is uncertain and that we cannot be sure that the fees will be similar. Therefore, it would be a good idea to create multiple revenue streams and improve treasury management to increase treasury growth; this would benefit SushiSwap in the long run

3 Likes

Taking a stab at answering these questions:

The committee should evolve over time, however finding folks willing to do so, without conflicts of interest is going to take a real process. To discuss my commitment: it includes staying conflict free on the investing or operating side, a list of high level deliverables geared around learning & understanding all ops, & implementing the processes to facilitate objective performance evaluation, + having a background in tech startups etc. I had no prior affiliation with any members of $SUSHI or large holders which was extremely important.

Any leader/exec hire should be voted in via the governance process. All businesses and contributors at this time including exec leaders should report under the committee.

This is an interesting request as practically it makes contributors targets for scams, phish, etc. it’s all on-chain and my personal pov on this matter is it should not be secret but some level of privacy should be allowed. The community could always throw up a proposal to require this to be entirely transparent and if it’s a popular idea would be followed.

2 Likes

Use a fresh address for the sablier stream.

Using phishing/scams - something that comes already from the numerous exchange hacks - as a pretext to obscure spending, huh. Is that the new and improved transparency this proposal seems to introduce?

The community has always lamented the lack of transparency, especially within backroom compensation deals. But knowing the current quorum issues, some big wallets might back your view.

How convenient and totally not coincidental, eh

5 Likes

100% echo this sentiment, some things never change with sushi. Lack of transparency and backroom deals (in which more times than not are terrible for sushi) continue to be the norm.

1 Like

Amazing - this is a great step forward

2 Likes

Who’s Neil? and how did he get installed on the compensation committee? Seems like quite a powerful position.

  1. What’s his expertise?
  2. Why is he being sandwiched in this proposal instead of a separate proposal vote where the community can due to proper due diligence?
  3. Is this the same Neil who was asking for 1 mil in compensation for each 1 bil sushi goes up in mc? Regardless if mc increase is the direct result of his own doing or general market improvement? That Neil? lol

Like come on…

4 Likes

I’ll tackle this point by point:

You’re getting a comprehensive team that has shipped the products that have made sushi what it is today committing to the next 4+yrs at market wages & alignment via vested sushi, roadmap completion sushi, or $12 strike sushi. The alternative is sushi under pays and contributors go to projects that pay market wages or you get pump & dump commitments from groups looking to make a quick buck.

There’s sufficient runway without having to sell a single $sushi. Although, you touch on a great point. Treasury management in bull & bear markets is crucial.

Continuing to diversify sources of revenue is important. Positioning Sushi to operate at the tip of the spear & innovating on the features & products is the only way to ensure the business doesn’t become commoditized.

Paying market wages is essential to retaining talent & the talent is essential to running a business. Sushi has had to rely on volunteer work & contributors keeping the lights on without pay. As a community member, that’s a big failure by the community. Spend is broken down in the plan – I don’t see any indications of “so much money”. This is market wages for great contributors ready to build sushi 2.0 over the next 4 years.

the team you build is the company you build, if you see hiring and retaining talent with market wages for the next 4 years being useless…we simply do not see eye to eye.

1 Like

Sorry you forgot one:

Pocketsquare - lead fanboi

10 Likes