Decentralized exchange SushiSwap has recently undergone a rebranding, transforming into Sushi Labs, an autonomous entity that will replace the protocol’s decentralized autonomous organization (DAO). Despite this change, the SushiSwap name will still be used for its decentralized exchange (DEX) operations. The purpose of this rebranding is to address issues of slowing growth and liquidity, which have been impacting the protocol.
The new business model introduced by SushiSwap under the name Sushi Labs will now operate under a “council structure” similar to that of derivatives protocol Synthetix. This new structure will consist of four councils: the Sushi High Kitchen, the Treasury Council, the Grants Council, and the Ambassador Council. The Sushi High Kitchen, made up of six to eight members, will act as the central governing body overseeing a multisig setup for transactions.
Jared Grey, who has been appointed as Sushi Labs’ managing director, emphasized that the new organizational structure, budget, and utilization of successful products like Route Processor will help boost liquidity on the Sushi DEX. Grey believes that by leveraging these tools, Sushi Labs will be able to address the stagnated growth and liquidity issues that the platform has been facing due to LPs migrating to other DEXs in search of better yield.
As part of the transition, Sushi Labs will introduce a multitoken product suite, which is intended to distribute product costs and provide more reward opportunities for token holders. While some members of the community have criticized the new council structure for its centralized nature, Sushi maintains that these changes are essential to overcoming financial challenges and enhancing liquidity management within the protocol.
In May 2023, SushiSwap generated $1.62 million in fees, representing a significant decrease compared to its performance in previous market cycles. The protocol’s evolution into Sushi Labs and the adoption of a new organizational structure mark an important step towards revitalizing the platform and addressing the issues that have been hindering its growth and liquidity. Despite some resistance from the community, Sushi is optimistic about the potential of these changes to drive improvements in the performance and attractiveness of the decentralized exchange.
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