Sushi Phantom Troupe - Strategic Raise


As part of the broader Treasury Diversification plan, we propose that a portion of the ~51m SUSHI that is currently being held by the Sushiwap Treasury be used to onboard institutional investors. SushiSwap has been a DeFi Community darling since inception and at this juncture we feel that it’s ready to welcome established crypto funds and cement SushiSwap as a household DeFi blue chip. Coming off the back of Sushi’s greatest month to date(insane volume across ETH and Polygon), Sushiswap boasts extremely resilient fundamentals with an attractive pipeline of upcoming releases.

Deal Size: Up to $60m (25% of Developer Treasury) with up to 10m allocated to community members.

Vesting Terms: 6-month cliff followed by 18 month linear vesting

Base Case Price: range of 20-30% discount to 30-Day TWAP (ending day of snapshot proposal if accepted)

2021-07-07 21.08.07

Additional note: Purchased SUSHI will be converted into xSushi and receive xSushi yield whilst vesting

Use of Proceeds:

Deployed into productive assets via safe yield solution:

  • yearn vault (profits redirected to xSushi holders)
  • LP in a stable pool on Sushi to generate liquidity, fees, arb opportunity to xSushi holders
  • Seed liquidity in key Kashi markets


We deem it most efficient to soft-sound interested parties privately and confirm allocations ahead of a governance proposal. Most interested parties already have stakes in SUSHI and voting through this capital raise via governance should be a formality.

We would also offer a public segment of up to 10 million for community members willing to participate.

Both would be executed via Miso provided we can get the new vesting module formally verified and audited in a timely manner otherwise we would fallback on similar contract to Lido for vesting and release schedule.

Please see MCDEX’s latest capital raise which progressed smoothly as precedent:

Minimum Investor Ticket Size: $250k (uncapped)

Confirmed Strategic Investor List (in no particular order):

  • Lightspeed Venture Partners (co-lead)
  • Breyer Capital
  • Spartan (co-lead)
  • Divergence
  • Dragonfly Capital
  • Polychain
  • True Ventures
  • Pantera Capital (co-lead)
  • Jump
  • 3AC
  • DeFiance
  • Parafi
  • Hashed
  • Zee Prime
  • Multicoin Capital
  • Blockchain Capital
  • Future Fund
  • Rockaway
  • Coinfund
  • CMS Holding

Co-written with Wangarian :bird:


Reviewing from a strictly quantitative perspective, some of the calculations and assumptions presented in this proposal are underestimated.

Current 30day twap with 30% discount is approximately $5.70/sushi (napkin math). At a max subscription of $60m this would effectively sell 45% of the dev treasury, not 25% posed in this proposal.

Additionally it’s not clear where the 51m sushi number is quoted from- a majority currently in the treasury (which should only be 9% of total emissions) is earmarked for vesting and therefore not available to sell.

The proposal could be adjusted to appropriately target a max subscription of $15m - $23m to align proposed assumptions.


I agree with the arguments brought forward by Omakase and believe the size of this round should be reduced.
Additionally, I believe that investors should be chosen by their strategic non financial contributions and their alignment with SushiSwap’s mission. When offering significant discounts on the spot price this should be a main focus.


If they are that interested in obtaining a stake, surely they could just twap into it off the market themselves or through numerous OTC providers.
Oh wait, it won’t secure them the discount they could safely realize with a dump after lockup ends.

Is sushi team hurting for funds? No.
Is this risk-free gift for FIs essential for the development of sushi projects? Doubtful. We managed without them so far.

So what’s with the recent strain of cefi-like proposals (milk LPs and now gift FIs portion of the treasury that was build by the people without any discounts)?

Computer says no (c).


Here I agree with @OmakaseBar in that the proposal should be adjusted to lower the max subscription. And I also think @Clearwood brings up a good point, why would these investors benefit from a discounted price if the SushiSwap ecosystem has nothing to gains from it other than funds?

Finally, while I like the idea, I would also like a grants system to be put in place. Similar to how Uniswap issues grants, where there is a form and an elected few can chose to approve grants or not for each request. Part of the grants requirements would of course be that it benefits the SushiSwap ecosystem/community. I think this would benefit the ecosystem a lot more than just having new institutional investors.


Agree with the purpose of treasury diversification.
But as pointed out by the community/core devs, I think the allocation should be reduced.

Also, I’m not totally aware of the current SUSHI/voting power distribution but selling up to 45% (following Omakase calculations) of the treasury at a discount to VCs not particularly aligned with SUSHI feels quite risky as a DAO point of vue.

Edit: After listening to the sushi forum and talking a bit with the community, it seems the voting power is already quite centralized so having several VCs on board could lead to the opposite of what I originally thought and help a bit in decentralizing the governance.


Agree with the need of treasury diversification but value proposition brought by them needs to be made clear before providing such steep discount and like Keno said their alignment with Sushiswap mission should also be taken into the consideration.


Given that the main use cases listed for the raise involve providing liquidity while diversifying treasury and onboarding institutional investors - I wonder if the same ends could be achieved by a special liquidity mining campaign where premium rewards would be distributed to select, whitelisted investors.

For example, whitelisted addresses (vetted crypto funds) could be eligible for 1.5x normal SUSHI rewards with vesting while LP-ing in select pools or seeding Kashi. This would help get more institutional buy-in while providing direct liquidity and utility to the platform.

Short of that possibility, agreed with @OmakaseBar and @Clearwood on reducing round size and only working with investors who can add a lot of value beyond capital.

I’d love to see this done via MISO and I think it’s worth waiting if need be. Would be great for MISO brand awareness and SushiSwap for it to be done via native app.


I strongly agree with the idea of wanting to see what we get in return from these investors from a strategic point of view. Also, feel like a 30% discount is a bit too high for an asset that is already considered pretty much like blue-chip.


To be quite frank, what’s the logic behind doing a strategic raise, giving a rough 30% discount to these hedgefunds, for them to possibly dump the tokens which hurts the protocol and price? To put it bluntly, these investors will not contribute anything significant in terms of development wise, to SUSHI. As Clearwood stated, “investors should be chosen by their strategic non financial contributions and their alignment with SushiSwap’s mission.”
Hence I can’t really see this any other way than raising funds at an unnecessary aggressive rate, the benefits of the fund raising are not clear. ( As to how it will help SUSHI in the long run )
SUSHI treasury already has a substantial amount to last a bear market and there was a discussion recently, about changing the xSUSHI’s structure to include a percentage of the yield that goes to the SUSHI treasury ( to further build up the treasury funds for a long bear market ).
To summarise I don’t see the point of going after additional funds this aggressively, is the team that in need of funds?
To do a strategic raise of this size after SUSHI has been around for quite sometime
( many see SUSHI as a bluechip already ), and essentially selling SUSHI at a 30% discount to investors, who won’t contribute anything significant ( in terms of development ) and will almost certainly sell their sushi regardless of price once the vesting is up, causing a huge supply outflow ( judging by the size of this fundraise proposal plus the 30% discount), is NOT a good idea.


I echo concerns raised above. Two other, IMO, downsides of proposal are 1) substantial dilution of staking rewards (adding ~13mm xSushi to the current ~9mm currently staked) and 2) concentrating voting power at discount (h/t.

To suggest a few alternatives, anyone willing to convert treasury sushi to xsushi for benefit of venture should be willing to do so for benefit of treasury.

Treasury can use this xSushi to either generate cash flow and invest yield in diversified income streams and/or take advantage of Aave to tap into equity and invest in diversified income streams.

In short, I don’t see the need to sell equity at discount to achieve goals of liquidity and diversification. Alternatives provide benefits without many of the disadvantages.


I agree if the justification and need for this proposal is liquidity and diversification then this proposal is not the best solution. If justification is to bring in vc/funds because of the strategic benefits they can bring (which can be worth just as much as money), then what are the strategic benefits so we are able to somewhat determine their worth?

Side note: One way to diversify treasury funds if that is the need for this proposal, Sushi keeps the sushi bar fees (that is collected in other crypto) and distributes equal amount in sushi from treasury. This can be done piece meal or on select pairs as not to cut off open market buy orders completely.


Love to see everyone input and stirring discussion here just a small summary and precision to orient the discussion further and will add some polling options in 24h depending where this is going.

  • Lower the max cap of 60m transparently based on a 30% discount we have 50m confirmed by all the funds listed up there.

  • Discount being too steep if we lower the discount they will most likely lower their allocation which would hit 2 birds with 1 rock.

  • The value is mainly in onboarding strategic partners that will contribute positively to the Sushi ecosystem we are already seeing some of these interaction with the recent Kampai proposal and gather even more support in the future.

  • Some of the firms actually inquired about a longer vesting schedule 4 years 40% discount, all the terms are flexible and up for discussions, I gathered interest fairly quickly and they are all aware of how the community works at Sushi.

  • These funds already have a stake in Sushi but aren’t displaying it publicly this is just how we are perceived at the moment part of the “liquid” allocation instead of a portfolio company. This is one way to scale and participate.

  • Very keen to have some talks revolving around the UMA range tokens instead of just taking whatever is written directly this is meant to be improved and fine tuned : Treasury Diversification With Range Tokens | by Kevin Chan | UMA Project | Jun, 2021 | Medium

  • Sushi team isn’t hurting for funds but we can have a bigger ROI by adding long term partners that will bolster our ecosystem with their other projects involvement.

  • if xSushi yield is a blocker we could have the vested Sushi stay vanilla.

  • Voting power this would diversify the current landscape which isn’t bad per se.

  • It would be very interesting to see funds come publicly with what they wish to add so everyone can realize the plus value.

  • The whitelisted addresses for LP is a very interesting point by @Bento

  • DeFi_Ted did a small intervention in the Sushi Forum call on Discord to potentially have Ruler Protocol help structure a Bond potentially too.


Thank you @0xMaki for clarifying.

As originally posted, the proposal was part of the diversification plan. The clarification says the “value is mainly in onboarding strategic partners”.

@Bento, Kampai proposal, and my reply above are all, IMO, better ways to achieve treasury diversity.

Re: Strategic partners

  1. “These funds already have a stake in Sushi but aren’t displaying it publicly…”

1.a If capital funds have already invested stakeholder $, our incentives are already aligned. Not only ethically (for sake of stakeholders), but also financially, they would want to engage in partnerships that help Sushi, let alone ones that are mutually beneficial with other portfolio companies.

1.b “…Instead of a portfolio company” How does this benefit Sushi?

As you say, Sushi is already a “blue chip” protocol, widely recognized as successful, innovative, etc. We should (and do) work to make Sushi an obvious choice in partnerships, not because we are a “portfolio company of x” but because of the value we contribute (see recent partnerships with Harmony, Polygon, etc.).

  1. “It would be very interesting to see funds come publicly with what they wish to add so everyone can realize the plus value” - I don’t understand - It seems there is a soft promise to do x to benefit Sushi.

2.a Does this mean they are unwilling to partner with us without the preference (30% discount) outlined in the proposal (despite already owning a stake?)

2.b More directly, why should we not expect explicit commitments on how these “strategic partners” benefit protocol? Would these benefits be exclusive to Sushi? For how long? (echo others above)

2.c The cited example of Kampai proposal as a benefit of “strategic partner” is, IMO, a poor one.

Understanding of finance none withstanding, there is nothing in Kampai proposal I see that is dependent/unique to capital funds. It is a very well outlined idea, crouched in a broader and ongoing interest in better stewarding treasury funds across protocols.

Better examples would be exclusive partnership, certain technology or capability we don’t possess, or access to markets we are unable to obtain without partnership.

  1. “adding long term partners that will bolster our ecosystem” - Like diversification of funds, there are other ways of accomplishing this than selling treasury funds at a discount. To underline, the sheer nominal amount of discount is 25.7mm (based on 30% discount of 60mm deal size).


To me, the proposal suggests we must bribe our way into these partnerships - that without a discount the “strategic investor list” would be unwilling to form long standing partnerships.

If asked, I’m sure this isn’t the case. a) Many are already invested in Sushi, b) as a consequence, they are already aligned, and most importantly c) Sushi continues to innovate ways to provide value for potential partners - including other protocols these firms have interests in.

We can and should pursue relationships with capital firms + other protocols. We don’t need to do so on these terms nor structure - especially given the total lack of commitment and explanation of what the benefit is, and how/why these benefits are foregone if we don’t pass the proposal.

Additionally, it would be nice to see how the discount was derived, and why we are choosing a timeframe where token price has retraced to January levels. Given our maturity, I would rather us be valued on the merits of cash flow, market position and speed of growth -not whims of crypto market for equity sale.

In short: There are better ways of diversifying funds. There are better ways of establishing long term partnerships.


As @OmakaseBar mentioned, a $60mm hard cap is a ridiculous number, as is 45% of the dev treasury. I agree that the size of this round should at max be in the mid-20 millions. The Sushi Treasury needs to be overweight SUSHI, not overweight stablecoin. Even $25mm is arguably a very large number—if we assume operational expenses top out at $1mm a year (which seems like an overly aggressive assumption), that gives 25 years of runway (excluding the yield that can be generated).

The list of institutions also includes 21 names. To me it seems a bit ridiculous we need 21 different funds to participate. If the point of the sale is to on-board strategic partners rather than to raise money, it is ridiculous to me that adding 21 funds will result in 21 strategic partners that contribute unique value that none of the other funds can contribute. Many of these funds also all know each other and are all big name Crypto focused funds, is the value add they each bring really that different from one another? For instance, just picking two random names, what value can Coinfund bring that Multicoin Capital cannot bring? What about the difference between Pantera and Polychain, they are both crypto hedge funds after all. What about Lightspeed—they don’t even invest in crypto historically, how do we know they won’t just sour on crypto if we get another big bear market?

What kind of help does Sushi actually need from these funds, it’s not like any of them can magically help on-board a ton of users into DeFi. If the core team wants intros, these funds all know the same people, bringing on one or two would be the same as bringing on more of them. Also, how do we know they are not lying when they say they already have Sushi positions? I think the idea of asking these funds to talk about how they can add value will be a great idea and we should totally do that before we give any of these funds any allocation.

We should significantly pare down this list to e.g. 5-7 funds max that we actually believe can bring significant value to Sushi’s ecosystem and who are good partners. The notion that each of these 21 funds will each bring their own value add that none of the other funds can bring is completely ridiculous to me. If we significantly cut down on the number of funds we give allocation to, we can also bring the round size down significantly and this deal would then make much more sense. That is just my 2 satoshis.

Sushi’s greatest strength so far, unlike many of the VC funded projects, has been our strong community who have contributed great ideas like Shoyu and Kashi. We have one of the most active governance forums of any blue chip DeFi project and have the most voter participation. It would be a terrible mistake to push this proposal through as is and alienate the community/small holders of SUSHI.


the treasury address is: 0xe94b5eec1fa96ceecbd33ef5baa8d00e4493f4f3
ops multisig is: 0x19b3eb3af5d93b77a5619b047de0eed7115a19e7

the two addresses have a combined total of 34.3m sushi, not sure where the 51m number comes from. see etherscan:

this shows that the treasury+multisig has a maximum of 21m sushi after accounting for vesting. that big jump on april 5 was simp #3. not sure what happened around june 14 and why the balance dropped from ~49m to ~33m sushi.

with a hard cap of $60m of sushi sold at $6.05, this = selling 9.92m units of sushi. if the treasury has roughly 21m sushi, 9.92m is 47.2% of its total sushi holdings, which is a retardedly high number.


Thanks for highlighting the range token @0xMaki. I’m part of the UMA team, but also a personal SUSHI token holder since day one so this topic is particularly important to me. Our team put together a proposal for SushiSwap to use a range token to diversify the treasury. UMA has just raised $2.6MM with a group of well known investors and announced it today. It was just meant to be a small experiment to show how this is done, but the demand and interest was extremely high.

Range tokens can help SushiSwap do the following:

  • Access funds and diversify its treasury without directly selling its native tokens
  • Borrow funds without liquidation risk using the project token as collateral
  • Define lock up terms for the investor in a smart contract
  • Leverage the growth of their protocol to sell tokens at a higher valuation
  • Customize payouts and easily deploy with UMA financial contract templates

If we as a community believe that $SUSHI is undervalued and can rally over the next 6 months, the range token is the ideal solution for raising funds. A range token acts like convertible debt. It will allow the SushiSwap treasury to effectively borrow funds now and determine a price to sell its tokens at expiry (6 months from now). As with many here, I do not like the idea of selling at steep discount. If we are bullish $SUSHI the range token will enable us to bet on the protocol’s success and allow it to raise funds at a favourable valuation.

I put together a 1 page proposal to show what this range token looks like if SushiSwap raised just over $40mm in this way and what the effective prices it would sell $SUSHI to investors given where settlement is.

I am also sharing a spreadsheet that will allow everybody in this forum to play with the parameters of the range token and experiment with its pricing.

The UMA team will launch a live version of this on Monday so that you can see exactly how this works and also show how easy it can be done.

Please let me and the team know your thoughts on this and we are happy to answer any questions.

SushiSwap Range Token Proposal

SushiSwap Range Token Pricing Spreadsheet


Diversifying the treasury portfolio is a good idea I think. Taking 25% and turning it into a mix of stables/ETH/BTC. Not a bad idea.

FYI: Institutions aren’t really taking on much risk if they don’t want to… they can simply borrow corresponding xSUSHI on Aave to lock in the proceeds of the discount regardless of future Sushi price.

Offering to sell OTC at or very close to market price aligns incentives much better. Allows investors to get a large position without moving the price. This also removes the need for complex vesting systems. Allows Sushi to diversify the treasury. Win-win.

If they are sure the price of Sushi will go up, they should be willing to buy at market without slippage. If they aren’t, they will hedge and it’s of no use to Sushi.


But we already voted on the proposal that should cover this (the one with the guy who actively rebalances the funds for 1%/year fee). And it should’ve been processed back when sushi was at $20 and not what may be a bottom for the year.

I can’t help thinking that someone here might have a vested interest to liquidate the treasury to the vulture capital. Wouldn’t be surprised if there’s a finders fee involved.

Are we really at the stage of the IPO, where insiders get to encash their shares and bid the rest of the bagholders a fairwell?


I just liked the idea of using OTC to diversify the treasury vs. market selling, as it keeps the price more stable. There could also be real benefits in getting strategic hodlers. Future Fund as a large holder I think and they have helped Sushi by purchasing and gifting Which I think was a great move that the community couldn’t get done because it seemed expensive.

But if most of the funds in this round are already holders, I don’t see that much benefit. But obviously, if this comes to a vote… since most of the whales are the funds involved, I’m sure it will pass. It would be nice to get some info on each fund suggested and why they are a strategic investor and not just money.

Disclaimer: I’m not involved with Sushi (except socially with some of the team) and I don’t hold SUSHI (except about 2000 SUSHI farming rewards I haven’t harvested and sold yet).