[Withdrawn] Sushi Phantom Troupe - Strategic Raise

Selling 9,000,000 $SUSHI ($60M~) would instantly result in a -43% price drop on Sushiswap and net only $34M USDC.

Even if you TWAP’d it over time, your price impact would be larger than the discount you are offering to VCs and it would come on the backs of community liquidity.

Plus if you were going to sell it at the market, people would pull their listings off book ahead of time making thinner liquidity.

Which means the price drops more, and the Sushi treasury gets less.

Part of the reason for private offerings is to both get supportive expertise but more importantly to specifically not sell on an open market.

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Please at least be serious with your replies.

There is obviously no need to cash it all out as a single transaction. It could be done in small amounts over the course of a year if need be.


Current voting figures are effectively a rejection of the proposal, as no VC that can offer anything worth while, is going for that.

I think the community is right to be extremely cautious, if not now then when.
I also believe there is merit to this proposal.
If we can decide on a small group of VC’s that have been vetted and prove committed to Sushi, offering a reasonable discount with extended vesting seems like the smart approach.

I think Adam said it well, and feel as though points #4 and #5 maybe going somewhat unconsidered by the least receptive.

Currently I would support:


So then we get back to the issues of:

  1. Time value of money and Sushi being unable to deploy into hiring until they have funds in hands.

  2. Time and effort being spent on the additional treasury management.

  3. 4.5% of the supply constantly being sold creating heavy downward pressure on a market that isn’t all that liquid because of secondary lockup tokens.

  4. Variable unclear price capture by the treasury.

  5. No added benefit from buyers.

Also, you seem to be stuck on the “selling at a discount” part, which I’ll refer you to my large post on:

You are comparing the price of two entirely different asset classes and opportunities.

If there is a banana that costs $1 and an apple that costs $0.70, buying the apple does not mean you got a 30% discount on a banana. It means you bought an apple at the price of an apple.

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@AdamSCochran with >= ~100m ADV for Sushi across last two weeks, a simple multi-day VWAP (offered by OEMS providers that these VC funds are onboarded with), would easily saturate the expected raise so perhaps the discount should be priced with respect to that metric, which seemingly would be much less than the discounts mentioned above.

Also, FWIW, if the mandate with which these VC funds are making bets is on the 5-10 year time horizon, as they indicated during the call, and are in the business of expecting 50-100x on their investments, then ~no discount should be immaterial to them, or even a premium given net-net on that timescale the premium should be a tiny percentage of the win case.

On that basis, not even sure an embedded call option should even be considered (or frankly any sweetener) by the community. Just my thots. And, even if it is, why are we tying that to UMA itself- it’s great they suggested the idea (but they also just pivoted from range tokens), seems they’re searching for PMF which is fine, but we should probably disentangle wanting to structure this as an embedded call option deal and using UMA to do so- two different things.

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The product has started to grow a bit fractured, and the new launches like Kashi and MISO are less known and less used.

100% agree with you, especially on this take.
I think interested institutional investors could tell us (the community, much less technical than crypto professionals/full-timers) what would they do to improve usage and awareness on Kashi, for instance.

You, for instance, have already pointed out a few things which it’s safe to say could have been done better.

The product has started to grow a bit fractured, and the new launches like Kashi and MISO are less known and less used.
There are also still challenges to overcome, outdated docs, no links to governance on the main site, fractured domains, two analytics sites, slow farm pages.

If we got this kind of feedback from institutional partners, I’m pretty sure the community would agree in “paying” the discount.

I think it’s safe to say Kashi has underachieved (given its potential and the amount of capital it unlocks).
I’m pretty sure if we had launched it with a separate token (together with an aggressive liquidity mining program), it would have raised at the very least 500-600M$ in liquidity.
But again, I’m by no means a crypto professional. This is just my gut feeling and you can’t (always) run a business by listening to your guts - you need a strong evidence to take this kind of decisions.
And this is what I expect from a good institutional partner: evidence, research, market insights and in general everything a capable full-timer can do that a naive part-timer cannot.


@0xMaki first of all, thank you for being so transparent and inclusive throughout the process. I was originally against this proposal but after listening to the forum call and the opportunity to provide a warrant/call option if the price performs well vs the discount, I think this could be very beneficial for sushi if we do the 4 year lock up and if it’s sized appropriately. I feel like it would make sense to do another poll now since the other one was presented before we had a chance to listen to the call and get more context. It would be interesting to see if sentiment around it has changed now.

I think Sushi should focus more on these kinds of proposals here rather than going back or forth about whether discounts are reasonable or not. It’s obvious that a big part of the community isn’t happy about VCs snatching discounts with the mere hope they’ll actually bring something useful to the table. UMA has the ability to create almost any kind of KPI options to ensure that all parties are incentivised to reach the same goal.

These success tokens are a good example of making this work. If you don’t like the details of this particular example, UMA has the tools and experience to create the perfect KPI options that you will like. So, why not focus more on these kinds of invectives instead of deciding how much of a discount is reasonable?

UMA is obviously willing to help. And they’re really good at what they do. So why not focus more on solutions like this?

  1. Not quantified and no SIPS on it so quite a non-issue?
  2. Putting tokens on sale on Miso takes very little
  3. It s not that heavy, the community can discuss to accept the hit, those that see upside will buy
  4. It s very clear how much you get when you sell if you put a good gas price, is this answer serious? Or similarly so on CEXes
  5. Especially so when VCs get stock on the pennies and community buys at full price

If they want to buy and want success they can do say no thanks to the discount or make it a premium to help the project even more. Would you agree with that or are you on the side of the maximizing stockowner wealth?

Thoughts here.

To compound on this, I think from inside this thread per Wangarian / others, there is excessive interest in doing such a raise.

As such I see 0 reason why extending Cliff/Vesting timeline doesn’t help self-select VC groups interested in long-term goals aligned with the Sushi community. Haven’t had time to read this entire thread, but I would be interested as to what schema determines 6month cliff + more?

I feel that there has been a lot of discussion already that similar such timelines are too short on the topic of crypto raising.


@AdamSCochran would love to know this too.


I am read your expounding on the time value of money.

But this is without consideration the value of purchasing such a large amount of sushi OTC.

If we are to argue

Selling 9,000,000 $SUSHI ($60M~) would instantly result in a -43% price drop on Sushiswap and net only $34M USDC.

There would be similar value gained if applied vice versa right?

My two cents https://twitter.com/hasufl/status/1416101813389086722?s=20


A discount is still material given the time value of money being used else where.

A 30% discount equates to still buying it actually at a markup when you factor in that time value.

Also, the 5-10 year time horizon is a nice thing to say, but given that this is being allowed to be staked I’m surprised that a longer lockup/vest period isn’t advocated for.

I didn’t hear the call but if the VCs are actually in it for 5 years, then a 2-4 year vest should be no issue for them.

Perfectly put, and much of what I believe @AdamSCochran is missing here.

I believe the only way for Sushi to 10-100x, as @AdamSCochran suggests, or even just not get completely usurped by the competition and ultimately become irrelevant, is through innovation in its design and mechanisms (research). All other discussion is irrelevant and futile IMO, and Sushi can’t be looked at as another startup because it’s not. I expand on my views here and here.

Not sure what you mean, I personally argue for a longer cliff.

The only trade off is that in our industry because projects have liquidity, you have to change for the time value of money when you extend the cliff.

You don’t want the lockup to be too long though as closed-ended funds need to return money and may be hesitant to deploy into anything that is long if they are later in their lifecycle.

Liquid funds would be increasing their calculation of the time-value of that capital for every additional year its locked.

Essentially time is one of the factors in what makes this offering competitive.

Right now most users are thinking of it as a one way thing ‘how do we get the most useful VCs with the best offer for us’

It actually has to be a two way street in thinking through what also makes this offer just attractive enough to get the best VCs involved.

A good negotiation is one where neither side get a perfect deal.

Sushi absolutely needs more technical innovation, which comes with a price tag of top technical talent.

But, it is also competing against others in the space who have shown they have some of the best tech design chops in the business.

Sushi’s expertise isn’t in the AMM side. It’s in product, community and an ecosystem product line.

Competing on making the best AMM/CLOB puts them directly against some of the best in the business (classically called a ‘Red Ocean Strategy’).

Whereas, Sushi could choose to instead focus on building out their product line, providing more polish and simplifying the UX to go after more mainstream users.


Leading AMM Uniswap has actually increased their product complexity to be an LP.

CLOBs are more complicated both for makers and takers.

Means there is a ‘Blue Ocean Strategy’ of building a product ecosystem that focused on the mainstream users who are more fee agnostic as well.

Either of those paths require technical talent for innovation, as well as other senior talent to continue to improve the experience and the business process.

All of those paths require finance.

So I’m not sure what I’m missing?

While Sushi should lay out clearly what they need and want to use the capital for, we can’t just sit people in a room and say ‘just innovate new system mechanics’.


I think you raise an important point. It’s much better to have one or two highly motivated partners with a large stake than many small ones who see you as “just another investment”.


What attracts LPs to Sushi is [and what did in the first place was] the opportunity to earn meaningful SUSHI rewards on top of swap fees. Sushi dominates in this space because even that is a heavily network effect reliant design, as the value of rewards is related to the liquidity for SUSHI & the value of SUSHI is tied to overall liquidity which is tied to usage (fees), or vice-versa. In other words, Sushi’s success has been predominantly a result of LPs wanting to make more money.

Sushi’s ecosystem products haven’t seen any network effects. IMO, Sushi is in the business of designing and researching mechanisms to ensure those who bring liquidity to its platform make the most money, with as little cost to the tokenholders that it’s design relies on.

Optimizing in other areas has its place for sure (though they’re definitely areas with weaker network effects), but ‘just innovate new system mechanics’ is a very big space with a ton of work to do in (with also a ton of different directions to go, it doesn’t need to be Uniswap-style or Balancer-style, for instance!), and is what most of the competition seeking to attack Sushi’s liquidity in the future will innovate in.

Sushi absolutely needs more technical innovation, which comes with a price tag of top technical talent.

how much and for what doe?

A good negotiation is one where neither side get a perfect deal.

someone ought to write a treaty on why folks ought to negotiate with vcs that co-raise with price terrorists that short the asset prior to attempting to legitimise the discounted sale of the asset

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