Sushi's Treasury Multisig xSUSHI Allocation

Context

The sushi treasury multisig currently has 15k xSUSHI and 11.6M SUSHI.

Just around 0.155% of the usd value is staked which seems super low if staking some of the treasury’s SUSHI is a goal (I don’t know if it is).


Background

If followed most treasury discussions here in the sushi forum (ref: Treasury portfolio - A suggestion for Diversification; Conduct token swap with OlympusDAO; and the now famous Sushi Phantom Troupe - Strategic Raise) and have gone through the sushi docs but couldn’t find any info on the current treasury split between xSUSHI and SUSHI allocation of the multisig.


Discussion

My initial guesses of what the reasoning for the current split may be:

  1. Guess: Staking a lot more would drive down APY on xSUSHI which would be a disincentive for other SUSHI holders to stake (thereby raising liquid SUSHI supply which in theory could drive down price);
    1.1 Counter: The total amount of SUSHI currently staked is 88M [ref 1], which is 8 times the amount of SUSHI on the treasury multisig. Because of this, any amount of SUSHI the multisig would stake wouldn’t meaningfully dilute the APY.

  2. Guess: Possible fear from the community from the treasury multisig gaining too much voting power with more SUSHI staked.
    2.2 Counter: This one seams relatively easy to solve by simply abstaining (or even perhaps delegating like a16z does) additional voting power.


I think I may be lacking context and/or missing something so I’d love some pointers, any comments or info on this topic from the community!

References:

  1. xSUSHI’s market cap and contract;
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Interesting observation. I was unaware that so little of the treasury was staked. Would enjoy more discussion on what this is the case and what the pros and cons of staking more of the actual treasury holdings.

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This would dilute the xSushi yield for other community members but I think it is worth exploring providing more of the Sushi in the treasury on platform like Kashi, Yearn (vanilla Sushi) for yield, Cream/IronBank, Compound & potentially Aave if we can get it listed.

Yearn is currently at current day % around 9% APY and all the revenue accrued could go to xSushi holders.

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Thanks for the reply @0xMaki.
Some follow-up information regarding my understanding of the treasury staking SUSHI:

  • The xSUSHI contract currently holds ~86M SUSHI tokens and the average APY over the last month is 9.13% (which I recognize is higher than normal so let’s assume 7% for the calculations below).

  • The sushi treasury multisig has ~11.5M SUSHI which is around 13% of the total SUSHI in the xSUSHI contract.

  • Thus, the maximum possible amount of xSUSHI APY dilution would be ~13% (which means the assumed 7% APY would come down to 6.2% APY).

Since, obviously, much less than the 11.5M SUSHI would be staked, I think we can look at the xSUSHI APY dilution as a negligible in this case. (For example, staking 3M SUSHI would only dilute a 7% APY to 6.75%).

I may be missing something so really appreciate all the feedback!

Regarding the other opportunities you mentioned for the SUSHI treasury:


Yearn:

The vanilla SUSHI yearn vault is very small with currently under $1M in TVL so if the community viewed using it as an option I’d heavily suggest doing a smaller experimental deposit (0.1M SUSHI maybe) to test how the vault’s strategy APY would perform with more than double the TVL.


Compound:

Lending SUSHI on Compound is yielding almost 0% so it probably isn’t a good option since we’re not looking to use it as collateral there.


Aave:

I’d be happy to help get vanilla SUSHI listed in Aave and suggest it to the community/governance. Let me know if that would be helpful!

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