Sushiswap Parachain

Hi all, I represent Parity Technologies, one of the development houses behind Polkadot, and am a fan and friend of the Sushi community. This is a proposal for a joint effort between the Sushi community and the Parity team to create a blockchain specifically for the Sushi ecosystem.

:books: Summary

SushiSwap has created amazing products and market share in a short amount of time. The SushiSwap community has also been a leader in understanding the vision of cross-chain product implementations. However, the current cross-chain implementations of SushiSwap have largely been identical copies of products such as the Sushi DEX and SushiBar tailored towards various ecosystems.

We believe that it would be greatly beneficial for Sushi to have a standalone implementation that aggregates many of potential features of Sushi into one dedicated platform without competing with existing implementations. A Polkadot parachain would be a strong platform for such an implementation, boasting forkless upgrades to accommodate rapid iteration of latest features, interoperability to support interactions with different Sushi implementations, and performance to sustain high activities. The result is a product where the newest features are released and tested first, and one that aggregates the efforts across multiple blockchains into a more powerful ecosystem.

:brain: Motivation/Rationale

Current implementations of Sushi products across multiple ecosystems have largely been EVM-based replicas of the Sushi DEX and SushiBar for multiple ecosystems. This allows for different ecosystems to utilize the functionalities of Sushi, but beyond liquidity mining incentives, there are currently no unique features of these implementations that take advantage of the particular ecosystems implemented.

Polkadot offers unique opportunities for the Sushi ecosystem. We believe a suitable way to build within Polkadot is as a parachain. Parachains are blockchains within the Polkadot network with its own chain-specific code for specific use-cases. This would introduce two major benefits for the broader Sushi community and the Polkadot ecosystem as a whole:

  1. The Sushi parachain is suited to be the home to test new products and changes for the Sushi ecosystem.

The Sushi ecosystem includes a broad range of products such as Kashi, Bentobox, Trident, Miso and more. In current smart contract implementations, upgrading existing products and introducing new products can prove to be challenging. With Substrate’s flexible runtime upgradability through WASM, we are able to introduce product changes and new products easily and rapidly, thus proving a home for the latest and innovation in the Sushi ecosystem. In addition, because it is a parachain, we can implement the products natively in runtime code instead of at the virtual machine level, which would give Sushi products a dedicated space and performance environment to maximize its throughput. This parachain would also support EVM through Substrate’s EVM modules.

  1. Greater support for Polkadot and interoperability without competing against Sushi’s current Moonbeam implementation.

We believe that a sovereign parachain instance will greatly benefit the Sushi ecosystem as a whole. With native bridges to Ethereum, Sushi holders from Ethereum can benefit from the latest functionalities introduced in the Polkadot instance. In addition, the Sushi parachain can work in parallel with Sushi’s Moonbeam implementations since they function quite differently. Moonbeam currently has running code of the proven Sushi DEX, whereas the Sushi parachain will primarily incorporate different and more experimental projects.

As Sushi is a market leader in governance, we believe the finished parachain and its dedicated team (see next section) will be a great early example of a strong SubDAO within the Sushi ecosystem, opening up possibilities for similar SubDAOs to emerge if this is proven to be effective.

We do not make any recommendation on whether there should be a native token, as we believe this should be up to the Sushi community to decide. To become a parachain, candidates must compete with other parachain candidates in a process called a parachain auction. One way to win an auction could be through a parachain crowdloan, A crowdloan allows for Sushi community participants to loan DOT tokens to the Sushi parachain to win the auction. The hired team (see next section) should figure out how to best win the crowdloan.

:alarm_clock: Scope & Time

A blockchain requires a dedicated team to build and fully operate. As such, Parity will provide hands-on training for a hired team within the Sushi community to build, operate and update the parachain. This team will be initially co-managed by the key Sushi stakeholders and Parity but will eventually become independent. We have contacted various Sushi community members beforehand and have received their support and enthusiasm for the project.

Parity’s internal resources, which would provide initial support for the hired Sushi team to onboard onto Polkadot’s technology, could include:

  1. Eric Wang (Head of Strategic Growth Projects)
  2. Daniel Bigos (Solution Engineer)
  3. Ricardo Ruis (Senior Solution Engineer)
  4. Gautam Dhameja (Director of Delivery Services)

We propose the following order of activities:

  1. The community votes to create a Sushi parachain.
  2. Sushi community members works with Parity Technologies to hire a dedicated Sushi parachain team.
  3. The substrate-based chain will be tested in Rococo, a testnet for parachains. It will also undergo security audits.
  4. The Sushi parachain team, under the governance of the Sushi community, would put the Substrate-based up for Polkadot parachain slot auctions.
  5. Once the parachain slot auctions are won, the hired parachain team will upgrade the Substrate-based chain into a parachain and implement various runtime modules.
  6. Eventually, the Sushi parachain will transition into a SubDAO of Sushi.

With Parity’s help, we believe we can have a production-ready blockchain by Q2-Q3 2023, and we will participate in slot auctions shortly after.

:moneybag: Budget and incentives

To ensure financial alignment, we propose financial rewards to be distributed as follows:

For the Parity team:

  1. 100,000 Sushi tokens for Parity Technology’s runtime engineering and BD teams, which will cover technical assistance, business development support, architecture design, continued advisory and recruitment. Paid fully upon hiring the dedicated Sushi parachain team.

For the Sushi parachain team:

  1. $250k payable in Sushi tokens quarterly for rewards for a new Sushi parachain core team until parachain launch. This assumes an initial 5-7 person full-time team of salaries of ~$110k, costing $137-192k quarterly, with the remaining amount payable for Business Development, acquisition of a small amount of DOT for on-chain testing, etc.
  2. If there is a native token (up to the discretion of the community and the Sushi parachain team), then some percentage of the native token for the Sushi team, distributed over some period of time. This will continually incentivize the parachain team over the medium term while the parachain gains traction and may eventually be transitioned into a truly decentralized DAO.
  3. Up to $200k payable in Sushi tokens for runtime security audits.

:woman_scientist: Target user/groups

The parachain target users include

  1. General Sushi users from other ecosystems
  2. Polkadot-specific users who wish to utilize Sushi’s functionality.
  3. Users who wish to use the latest features within the Sushi ecosystem

:chart_with_upwards_trend: What does success look like?

A successful implementation would mean a live parachain with new Sushi products being successfully introduced within the parachain and increased activity in the Sushi community.

Poll
Should we aim to build a Sushiswap parachain?

  • Yes
  • No

0 voters

:link: Related links

1 Like

This is a nice, highly detailed proposal. Appreciate esp the thought put into activities, costs & benefits.

We’d love to get @JiroOno and @jhoward’s eyes on this in light of the restructuring process.

As first mover, Sushi tapped into cross-chain opportunities and a large number of communities but has not yet managed to aggregate, foster and leverage said community or app developments. At the same time, there are many developments ongoing which need to be finished & brought to market. Many more will come up… This leads us to the question of the long-term Sushi vision and how this proposal could fit in.

  • Ecosystem Approach: Full product suite across chains… but why not focus?

All ecosystems come with unique users (-> make sure to collect & integrate all) but some ecosystems are here for the long-run and come with fantastic network effects.

Next to Ethereum and its upcoming layer 2s, the main ecosystems are Polkadot (+ parachains) and Cosmos (+ main hubs) - and to a lesser degree BSC, Solana and Avalanche as monolithic l1 projects.

Overview of the layer 1 blockchain ecosystem from blockchain-comparison.com.

  • Roadmap integration: Lots of different pieces - how can this parachain proposal add value?

Obviously, the highest priority is finishing products and positioning them well on the market. Nonetheless, we believe a parachain development could make a lot of sense for a variety of reasons

The parachain could function as a central Sushi community, liquidity & development hub and be leveraged for Sushi apps across (para)chains incl. synergy effects with other DeFi, NFT, cross-chain projects in the wider (Dotsama) ecosystem.

In addition to that, in our opinion, it’s also important that the very best projects/teams

  • have some low tech expertise to tackle upcoming blockchain/DEX issues;
  • consider MEV - which can be significantly reduced by running your own chain;
  • think of long-term economics & governance of running own chain vs. being an app on chain xyz (e.g. Blockchain issues in tier 2 chains, costs vs. returns, efficiency of swaps, etc.)

Cheers to :sushi:
Julian from ScaleWeb3