The SushiGuardRouterV01 implements MEV Protection at the protocol level for Sushi users. Profits from arbitrage (via backrunning) are collected on chain in a transparent manner. This will enable Sushi to generate and capture profits normally realized by arbitrage bots, in protocol. The profits are split with Manifold Finance for operating the additional infrastructure and maintenance required to operate it. Below you will find the reference soft proposal, the audit, and costs breakdown by category with further details according to the cost subtype.
Unfamiliar with the existing Sushi Guard implementation? Read more at the sushi documentation website, Sushi Guard | SushiSwap
The router implements features such as:
It is gas efficient in all circumstances, meaning trades will always cost less than they do now. The benefit for this is reduced transaction costs.
The back running trades that are executed leverage Kashi/Bentobox (as well as Aaave). This means the Sushi ecosystem will benefit in circumstances in which the router executes a backrun transaction.
The back running trades are made on-chain, and emit an event, ‘Sushi Guard’. This means that users can track how much the router has made from them, which would enable also Sushi to do account specific reimbursements (the original promise of YCabal if you remember).
Estimated Economic Impact
Preliminary numbers range from $420,000 USD to $1,840,000 USD in profits monthly. This includes all chains that it is deployable to (chains in which Aave is also on).
CommodityStream (Manifold Finance’s parent holding company) is willing to help finance the costs of te routing contract, as the benefits will be enjoyed over a life cycle yet the cost is upfront. We submit this outlay as an initial starting point for consideration, though we feel it fair and approximate. This may be of benefit to the yet-formed SushiDAO vis a vie taxes.
The Notion page includes an ‘Omakase’ cost category that should be ignored for now
THESE MATERIALS ARE PROVIDED “AS IS”.
The owners and contributors expressly disclaim any
warranties (express, implied, or otherwise), including implied
warranties of merchantability, non-infringement, fitness for a
particular purpose, or title, related to the materials. The entire risk
as to implementing or otherwise using the materials is assumed by the
implementer and user. IN NO EVENT WILL THE OWNERS AND CONTRIBUTORS BE
LIABLE TO ANY OTHER PARTY FOR LOST PROFITS OR ANY FORM OF INDIRECT,
SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY CHARACTER FROM ANY
CAUSES OF ACTION OF ANY KIND WITH RESPECT TO THIS DELIVERABLE OR ITS
GOVERNING AGREEMENT, WHETHER BASED ON BREACH OF CONTRACT, TORT
(INCLUDING NEGLIGENCE), OR OTHERWISE, AND WHETHER OR NOT THE OTHER
PARTICIPANT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE."
Profit split is 50/50 between Sushi protocol and Fold stakers. It will be up to Sushi to decide how to utilise the profits, some options include incentivising pools, buy back of Sushi tokens and rebating gas costs.
I know sushiguard has already passed through all stages of governance - but I wonder if it may be worth reopening this in hopes of looking for a better solution - particularly given the negative optics that surround Manifold and thought that splitting MEV revenue 50/50 is a subpar deal for the Sushi DAO.
They are catching narrative right now because of whatever announcement today, but I definitely got left with a bad taste after seeing this stream of calling Sam Backa out a few months back. Think the guy also controls almost 30% of token supply too?
Disclosure: I am active in the Manifold community and own FOLD but I’m not part of the team or paid by them etc.
I think this “negative optics” stuff is overblown. There was some truth to it last year but they’ve long been fixed.
Some of the allegations are just flat out wrong though (eg, the Twitter thread saying the founder shills his token. Sam (the founder) is far from perfect, but one thing he absolutely doesn’t do is shill his token - that screen cap selectively picks out one of max 2-3 times the entire year he ever mentioned token price)
From my perspective, most of the “controversy” around Manifold comes down to
a) Bad/nonexistent communications and repeatedly missed deadlines (most Web3 projects are bad at this but Manifold was next-level bad)
b) The bad taste left in the mouth after the minor relay exploit incident when the Manifold Twitter basically refused to take responsibility for it and picked a fight with people who questioned Manifold on Twitter and threw around around some wild accusations.
These two things were actually true. This is why the founder stepped back from using the Manifold Twitter, hired a head of BD/Comms/Strategy to lead on that front. They’ve apologised for their mistakes and fixed the underlying issues - I’m not sure what else the team can do, other than keep going and continue building through the bear market (as they are doing).
Anyone who frequents the Manifold TG knows that things have improved dramatically since James (the new hire) came on board - comms are better, community is happier, and it feels to the community like a lot of stuff that was previously slipping through the cracks is now being handled with James to co-ordinate it and it generally feels like the team is going full steam ahead building and shipping products (not just SushiGuard, but a bunch of other new products).
James’ full apology/explanation here on the Lido forums (since the relay incident mostly affected Lido validators):
Update: I can’t post links, probably since this is my first Sushi post. You can find it on the Lido forums - the topic is called “Reimbursing Validators after Manifold Security Incident”
Sam replied on Twitter to the Vaibhav Chellani allegation - I still can’t post links but it’s the first reply to the tweet in which the allegation was made.
As for the token - if you look on Etherscan you’ll see about 450k FOLD (around 22% of the total supply) in the Deployer contract. From memory what they said on Telegram months ago was that this was collectively owned by the entire team (10-15 people) and not just Sam. This is also the stack they sell from when raising funds etc.