SushiSwap CEO proposes new tokenomics for liquidity, decentralization

According to the proposal, Jared Gray, CEO of decentralized exchange Sushiswap, has plans to redesign the tokennomics of the SUSHI token. introduced On the Sushi’s forum on December 30th.

As part of the newly proposed tokennomics model, a time-locked tier will be introduced for emissions-based rewards, along with a token burn mechanism and a liquidity lock for price support. The new tokennomics aims to strengthen “financial reserves to ensure continued operation and development” as well as promote liquidity and decentralization of the platform.

In the proposed model, liquidity providers (LPs) will receive 0.05% of swap fee income, with high volume pools receiving the largest share. LPs can also lock liquidity to earn boosted emissions-based rewards. However, if removed before maturity, the reward will be forfeited and burned.

We are pleased to share the vision of @sushi swapA new token model for . I posted a quick tl;dr article on the Sushi forum and linked the entire proposal. We welcome your questions and feedback.https://t.co/D9TO2Oi8ra pic.twitter.com/GBrQKPzfiH

Jared Gray (@jaredgrey) December 30, 2022

Also, staked SUSHI (xSUSHI) will not receive a share of the commission income, but emissions-based rewards will be paid in SUSHI tokens. Timelock tiers are used to determine emissions-based rewards, with longer timelocks yielding greater rewards. Withdrawals prior to timelock expiration are allowed, but rewards will be forfeited and burned.

The decentralized exchange will buy back and burn SUSHI tokens using a variable percentage of 0.05% swap fee. The percentage will change based on the total Time Lock Tier selected. Note the following in your proposal:

Although timelocks are paid out after maturity, they have a significant deflationary effect on supply as large amounts of collateral are released before maturity and burn occurs in ‘real time’. “

The tokennomics redesign came after SushiSwap revealed to the Treasury that it had less than a year and a half of runway left. As reported by Cointelegraph, Sushiswap has experienced losses of $30 million in LP incentives over the past 12 months due to its token-based emissions strategy, prompting the company to introduce a new tokennomics model. rice field.