Sushi

This proposal expects to produce a community signal. Full details and discussions thus far can be found at: https://forum.sushi.com/t/rfc-deploy-new-tokenomics-for-sushi/12513/1

Synopsis: Restructuring Sushi’s token model will help cement its role in the protocol’s ongoing success and contribute to its growth. Since its launch, Sushi has been at the forefront of tokenomics with initiatives like MasterChef and xSushi. We aim to present a token model that sets us on a sustainable growth path and long-term strategy. In January, we published an initial draft, which, thankfully, generated meaningful feedback from the Sushi and DeFi community, and we believe this final draft represents the best model curated from that feedback.

As Kanpai expires in December of this year and Sushi’s current distribution model quickly approaches full distribution, our new proposal outlines our vision for a revised Sushi token model crafted to ensure stability and sustained value for all stakeholders. The model builds on three pillars: protocol sustainability, token utility enhancement, and treasury diversification. We invite you to review the proposed changes showcased in our paper, which will synergize to support a resilient token economy.

Below is a brief overview of the new model’s mechanics and goals.

Challenges and Solutions We’ve identified several challenges through thorough analysis. Here’s a brief on what we’ve found and our proposed solutions: We aim to improve rewards efficiency, reducing the annual cost of Sushi emissions. Establish a balanced approach to its emissions distribution. Currently, the emissions-to-Sushi-Bar income suggests a 1:1 ratio. Financial Stability: Address the current emissions-to-income ratio. LP Incentives: Sushi LP incentives need recalibrating to remain competitive. Staking Mechanisms: Revise xSushi staking to serve high-conviction participants better. xSushi Distribution: Align xSushi staking to provide fairer distribution among participants.

Economic Model Our economic model scales strategically via innovation, such as: Trading Fees: A primary revenue source from LP transactions Routing Fees: Income from trade fees via aggregation Staking Fees: Potential revenue from staking rewards Partnerships: Strategic partnerships

Stakeholder Considerations Align our tokenomics with the interests of our key stakeholders: Liquidity Providers (LPs): Aimed at ensuring long-term incentives. xSushi: Stable supply, non-dilutive rewards, and governance. Traders: Offer an improved trading experience with low slippage. Token Projects, DAOs: Building long-term partnerships. Sushi Treasury: Ensure diversified and sustainable income.

Goals for a Redesigned Token Model The revised proposal has several objectives: Promote decentralized ownership. Amplify liquidity. Encourage sustainable growth. Enhance the protocol’s sustainability. Bolster $SUSHI utility. Diversify the treasury for robust financial operations.

Our model aims to enhance liquidity, offer non-dilutive token rewards, institute a balanced supply, and ensure competitiveness.

TL;DR: Voting for this snapshot will accomplish the following: Begin the work to enact the proposed framework in the paper. Reshape Sushi’s token model to promote its ecosystem goals. Increase decentralized ownership via the DAO. Optimally realign stakeholders where the current model is limited. Promote ecosystem growth with sustainable emissions and value.