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In a new post by new SushiSwap CEO Jared Grey, he admitted that DEX has lost $30 million in the past 12 months due to liquidity provider (LP) incentives.
As explained by Grey, SushiSwap currently uses a strategy of using the level of token issuance in circulation to incentivize LPs, but the current rate is unsustainable.
In the past 12 months, Sushi has experienced a 30M USD loss in its emissions-based reward strategy to bootstrap liquidity & incentivize LPing; Sushi spends more on emissions than swap volume generated. 3/
— Jared Grey (@jaredgrey) December 11, 2022
Therefore, in the future, Jared Grey plans to redo SushiSwap's Tokenomics and redesign the entire startup liquidity model on the exchange to solve this problem. Accordingly, SushiSwap promises to bring many innovations in terms of solutions in Q01/2023 to expand the scale of swap volume and prioritize focusing on total lock-back value (TVL).
According to Jared Grey, this direction will bring capital efficiency to DEX, making SushiSwap more competitive to regain market share from competitors.
This multi-pronged value realignment will bring capital efficiency to the DEX, making it more competitive to recapture market share from its competitors. Governance is essential to tokenomics, & creating more equitable outcomes is paramount to a successful DAO like Sushi. 12/
— Jared Grey (@jaredgrey) December 11, 2022
Jared Grey also paid special attention to promoting "Kanpai," SushiSwap's new governance proposal to redirect transaction fees earned as SUSHI token rewards to participants who stake into SushiSwap's coffers amid the platform's financial challenges.
Simply put, "Kanpai" allows SushiSwap to rebuild its cash reserves to continue paying competitive salaries, critical infrastructure, and diversifying its treasuries with proceeds in underlying trading asset pairs such as on ETH as well as stablecoins. However, the new CEO SushiSwap said Kanpai is only a temporary solution.
Put simply, it allows the protocol to rebuild its cash reserves to continue to pay competitive wages, pay for critical infrastructure, & to diversify its Treasury with funds collected in the base pairs of assets, like ETH, stablecoins, etc. Kanpai is a temporary solution… 16/
— Jared Grey (@jaredgrey) December 11, 2022
Source: Coin68
