[Withdrawn] Sushi Phantom Troupe - Strategic Raise

Don’t mind a lurker sounding out

Notice the poll earlier heavily skewing towards

  1. the strictest possible vest
  2. the lowest possible upside
  3. the lowest possible allocation and number of partners

The fact that there is no zero partner/zero discount choice is very telling of the choices given to the community, almost as if ‘im going to do this whether or not you agree’

Sushi’s strength was in its community, and this move seems to be punishing the community for the sake of unpromised value by ‘institutionals’. I’m afraid this is the endgame for me

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Future Fund are absolute chads. balls deep in sushi

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@0xMaki Stacker Ventures (stacker.vc) is interested in finding out more - krom@stacker.vc

Just checking in to say selling to VCs at a discount is total bullshit and always will be. The gall of said VCs to turn up and say that they really deserve a 60% discount and that 30% is generous is emblematic of where defi is at this point.

Smooth talking tradfi suits trying to schmooze themselves into buying your bags at a discount only to dump on you in 6 months. Thanks but no thanks.

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i think it can be worthwhile to raise from a select few vc’s with the embedded call option token. this gives sushi liquidity now and that sushi will not be staked for xsushi for x years (3-5). also, why not carve out a portion of the raise for community? launch x% of embedded call token on miso to whitelisted addresses (say sushi or xsushi holders with positions under a certain amount).

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Thank you to everyone who has provided constructive feedback to the original proposal. After observing from the sidelines, DeFiance would like to clarify several assumptions being made and provide further context for this capital raise.

Firstly, we acknowledge that the current capital raise of ~$60m is too large. When initially proposed, we believed that a deal size of $20m would be ideal given Sushi’s Treasury size and Sushi’s financial requirements. However due to overwhelming investor demand, the deal size was enlarged. we do not feel that the number of VCs involved impacts the quality of the round, as long as individual VCs value-add are clearly communicated.

For this capital raise, DeFiance’s involvement was limited to the recommendation of certain VCs and the price discount considerations. DeFiance held no part in the final allocation process. However, to signal support, DeFiance committed a token sum to the capital raise.

In light of the latest conversations with respect to DeFiance’s market activity and the possibility that this is some form of deal arbitrage, I would like to emphasize that the accusations are completely false. DeFiance has been original supporters of Sushi since October 2020 when Sushi was < $1.00 and till today, we remain one of the largest SUSHI holders. We have provided support to the Sushi team throughout this time period and fully intend on doing so for the foreseeable future. As a crypto investment fund that holds liquid positions, our mandate requires us to not only buy tokens but occasionally sell them as well. We do not think that there is a need to explain every action we take to the public.

After reviewing the alternative recommendations to the proposal, we believe that a discount to the 30D TWAP price is necessary in order to offset the illiquidity premium of the purchased SUSHI. Considerations as to how much of a discount or how long the vesting should be for the purchased SUSHI are openly debatable by the community.

Moving forward, DeFiance will not participate in this capital raise in order to remove any concerns of conflict of interest. We hope that the Sushi community focuses on the benefits of a large stablecoin denominated Treasury, which will provide the SushiSwap team with a meaningful war-chest of financial firepower in the years to come.

Best,
Wangarian
DeFiance Capital

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This is an incredibly arrogant response. You do not think there is a need to explain dumping 8 figures of Sushi within days of putting together the proposal? You don’t think you could have chosen a better time, or just refrain from dumping while this is going on?

Your role in selecting which of your buddy VCs gets tokens at a massive discount is deeply unwelcome - we all know how the world of VC back scratching works.

Good riddance “Defiance” Capital

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I barely have a position in SUSHI but this response still rustled my jimmies. Just dismissing your very conveniently timed sells as: “yeah man we also need to eat, you know?” I know I’m being childish with how I’m wording my response, but it doesn’t make it have any less weight.

And to address this:

After reviewing the alternative recommendations to the proposal, we believe that a discount to the 30D TWAP price is necessary in order to offset the illiquidity premium of the purchased SUSHI. Considerations as to how much of a discount or how long the vesting should be for the purchased SUSHI are openly debatable by the community.

Do you just like @Franklin-Pantera think that the only market for SUSHI is the SUSHI/ETH market on SushiSwap? Because that seems to be a big reason for justifying the discount. A very small amount of DD confirms that most of the liquidity for SUSHI is NOT on SushiSwap and in fact does not even account for 10% of the daily traded volume!

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I am extremely disappointed with the team to bring such a proposal forward. There is absolutely no reason why the VCs should get such a huge discount, I would even argue there is no reason why they should get a discount at all. The token already trades at a discount if you look at all the metrics that VCs care about (p/e ratio compared to trading volume etc.). If they believe in the longterm growth of the protocol, they should absolutely love this price right now.

Also it is pretty suspicious that we get this proposal after the UNI education fund in such a short timespan. I would say this is no coincidence and the VC funds realized that they can misuse governance for their own purposes. Just open a governance proposal and make it look legit, while the VCs can switch every vote in their favor with their huge Sushi stack. Just remember the Sushi/Solana proposal and how much influence Sam had over the outcome of the vote.

Additionally there is no mechanism to make sure that the VCs actually fulfill their promises. They get access to Sushi at a discount without actually being forced to do anything. Again this is similar to the DEFI education fund, they get the money and they can do whatever they want (insta dump it). It is absolutely rekkless to not include any meaningful mechanisms (except vesting) that protects Sushi holders.

As a crypto investment fund that holds liquid positions, our mandate requires us to not only buy tokens but occasionally sell them as well. We do not think that there is a need to explain every action we take to the public.

This is nice marketing talk for: “Hey we need to make money and occasionally dump on you guys.”

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First of all, @Wangarian appreciate you guys not participating this round. Personally, this gives me comfort that there’s probably no arb happening.

“As a crypto investment fund that holds liquid positions, our mandate requires us to not only buy tokens but occasionally sell them as well. We do not think that there is a need to explain every action we take to the public.”

However, can’t help but feeling this sounds a little defensive.

IMHO, related parties should also recluse themselves from voting and we should whitelist only funds that have not sold in the past 1 month.

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I like the standard hedge fund talk used in this reply, makes you look serious you know.

Just like Hisoka seemed serious about his Phantom Troupe participation before going against Chrollo.

Also I’m curious since DeFiance is a sub-fund from 3AC, does this mean they are also opting out? Otherwise its all semantics and theatrics to look good because in the end not much changes in effect.

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Do you just like @Franklin-Pantera think that the only market for SUSHI is the SUSHI/ETH market on SushiSwap? Because that seems to be a big reason for justifying the discount. A very small amount of DD confirms that most of the liquidity for SUSHI is NOT on SushiSwap and in fact does not even account for 10% of the daily traded volume!

Nah they leave this part out conveniently, you want to tell me a VC investor doesn´t know this? If this really is the case:

  • You lack all the credibility to be involved in the deal
    If it is not the case:
  • You used a disingenuous argument to push your position, which is an even bigger no-go for an involvement in the deal
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Also I’m curious since DeFiance is a sub-fund from 3AC, does this mean they are also opting out? Otherwise its all semantics and theatrics to look good because in the end not much changes in effect.

Yea bit interesting. As they (3A) were the ones dumping on Binance.
0x085af684acdb1220d111fee971b733c5e5ae6ccd is 3A’s Binance deposit address.

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Hi Everyone,

It’s Future Fund here. Just wanted to say hello and thank everyone for their ideas above.

We’re here to help the sushi team and push the sushi ecosystem forward.

Here are some of our contributions that you may or may not know about.

We paid a few mill for the sushi.com domain and gifted it to the protocol with no strings attached.

We’ve recently invested in a brand new NFT team to help co-develop the new Shoyu NFT platform. We’ve pulled together two of the top design companies in the world: Stockholm Design Lab and Tendril to create a world class brand and “metaverse” for Shoyu.

$SAK3 is another project we helped utilise bringing in BIG Architects (Bjarke Ingels Group) and award winning brewery Bunraku to create whats going to be an award winning sake and a potential netflix documentary into the world of NFTs and tokenized products.

We see SUSHI.COM becoming more than just a AMM and more of a decentralised internet company of the future.

We’ve had the fortunate experience to work with almost every talented sushi contributor on the team, these gentleman and ladies are bright, intelligent and full of passion.

About this round, we kindly accepted this as respect to our good friend Maki, but to be honest we would rather politely decline. We were one of the early investors of sushi and we’re here to help with no strings attached, do what others dare not to do, and really collaborate and innovate.

Everyone should get the opportunity to invest in this team. I would say have a portion of the tokens to be up for auction on MISO. Do a similar model to Binance launch pad, staked xsushi over an x period of time, raffle to be able to purchase sushi at a discount plus add in vesting period.

Sushi started as community grass root project, this is what makes it truly unique. It’s the essence of crypto and decentralisation.

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Hello everyone.

Some thoughts here :

" Don’t be evil " → VCs don’t have the reputation to be a tiny cute cats, but the comparison will be more exact with sharks. I really don’t think they have all a good attention, even more if they are still not involved, they had the time I think. I’m intimately convinced that they just want one thing : more money, in a short term, in a middle term and in a long term. They don’t care about us, about the community, for at least 30% of them. They will say the opposite, but hey, don’t be naive.
We need to be very cautious with the conditions , and why not add something like a termination clause of rupture.

Community first → I believe the community MUST be a part of this deal. We can probably reserve $10M ( less or more, it depends the final amount ) for the community, and let only all xSushi / sushi holders having the possibility to buy with the discount. Or build a call option for them.

Discount & Lock → Sorry for the vulgarity, but please, don’t play with our balls. Don’t be unfair with us and with the community. NO ONE can ask a discount of 50% , even more for just $10m , it’s ridiculous. But I agreed with a range of 15%-20%. Why not a discount in relation of the lock ? , example : 2 years lock → 10% , 3 years → 15%, 4 years → 20% .

At the end, I just want to say that the discount, if we go through this plan, must be benefits for the holders, and not for the opportunists.

B.Naïm

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Dear @0xMaki & Sushi Team,

When the most prominent Sushi advocating Fund, namely FutureFund, which provided with distinction the most visible value without strings attached, is recommending against providing a discounted sale, even declining to participate, you should rethink the benefits of this proposal. Also note, that the initiator, @Wangarian from Defiance, has withdrawn from participating.

Please consider deliberately including the entire community when you deem treasury diversification is necessary. FutureFund is the best example that value-add VCs, which you seek, will contribute to the success of Sushi without demanding something in return.

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As a long time lurker and sushi supporter, i would just like to point out how unfortunate the timing of this proposal was placed. I personally think, if sushi was trading at 50 usd per token, this wouldnt have garnered as much hate.

The underlying purpose is to align incentives. Can the allocation of sale not be done in tranches at different times?

The sushi team can say allocate 20% of their treasury to VCs but instead of having all the tokens bought today, cant the buys be spread out over say a 18 month period every 3 months or so.

Then we can see who is really committed long term. This also means this proposal no longer looks like a sort of ‘distressed’ token sale.

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Some final thoughts on this:

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I am in favour of a strategic raise. Sushi is massively undervalued compared to other DeFi blue chips, diversifying the treasury makes sense and adding strategic partner markes sense.

Uniswap has Paradigm. Sushi has SBF and some good 4 but lack a strong research partner.

However, there are quite a few items that need to be though through

(i) What is the goal?
As pointed multiple times, if the goal is to diversify the treasury by inviting long term term investors I would prefer
(i) a smaller cap e.g. $20m
(ii) with a longer lock-up e.g. 2-4 years and
(iii) a vesting with a 12-month cliff

The discount is fine but needs to be adjusted to what these investors will add to the community.

(ii) 21 VCs wtf! Let’s not have a party round but instead a strategic round!
21 strategic investors mean that no one has enough skin in the game to really support the team.

Some VCs in the list have shown in the past they can add real value to a project like Sushi, others look like generalist VCs trying to have a punt on crypto.

This is not a seed or Series A round. Sushi is similar to a growth stage. We need a strategic investor that will add real value not just a logo and some intro to TheBlock team.

Having VCs discussing how they can add value is fine. But what would be much more helpful would be to have each VCs prepare a management committee presentation to the Sushi team to show
(i) they understand what are the opportunities and challenges of Sushi and
(ii) how they can help Sushi

Then the sushi holders would select a lead and a co-lead and maybe 2 other strategics. So a maximum of 4.

(iii) Research partner. Not financial partner
Most of these VCs are either pure financial investors or liquidity providers. The latter does bring some value, the first not that much at this point.

I would emphasise on finding a partner with a strong technical background that can support the team in future development and continue to help with hiring.

Potential next step
(i) Sushi board schedule an investor day in 1-2 weeks where each investors can pitch and present their growth and support plan

(ii) Sushi holders vote to select the strategic partners and also the deals

(iii) Strategic partners are selected

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I see this proposal as having two elements

  1. Value add to Sushi protocol
  2. The transaction

On point 1
Let me ask community members: Are you selling right now? Further to this, what would have to happen to entice you to sell at a 30% discount to market price? I’d like to see something from each of the listed VCs on their roadmap for adding value for their 30% + as a community, we shortlist the most attractive proposals.

On point 2
This proposal isn’t about funding - it’s about onboarding VCs and their channels in order to help better position SUSHI as a Defi blue chip with both retail and get funds talking about its potential. So if SUSHI isn’t desperate for funds, are we desperate for onboarding these players + their contacts? Any decision to sell SUSHI from the treasury at these rock bottom prices seems like an odd decision to me, but we just don’t know what’s on offer quite yet from the party on the other side. Roll on the proposals from VCs and let the community make the decision on whether their contribution is that necessary.

Further to Franklin’s point from Pantera - let’s flip the transaction on its head: if their fund wanted to invest $60m in SUSHI right now, they would also incurr the same 30% slippage, so the benefit works both ways. I’d even argue that purchasing SUSHI from the treasury OTC should be done at a premium, regardless of lockup period + the extra skim from the top could be put to use as the team sees fit, further accruing back to the protocol and SUSHI holders.

Be well,
Gambit

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