As the DeFi market continued to mirror the rally in the crypto market, more innovations were introduced into the ecosystem. In today’s news, SushiSwapthe sixth-largest decentralized exchange (DEX) by 24-hour trading volume, has passed a proposal to transfer 100% of its trading fees to SushiSwap Treasury for maintenance and expenses.
SushiSwap presents a new update
This new update comes after CEO Jared Gray warned that exchange cash stability is numbered as it only has “a year and a half of cash trail” left, despite spending cuts to annual holdings of $9 million to $5 million during the current crypto winter.
According to a governance presented proposal by the developers of the decentralized exchange SushiSwap, which was adopted on January 23, the SushiSwap exchange will now expand the use of trading fees by redirecting them to the exchange’s treasury to improve the operation and maintenance of the exchange. exchange over the next year.
The proposal noted, “Treasury revenue will be 50% ETH and 50% USDC, with a projection of approximately $6 million earned over the next year if this proposal were to pass.” In another proposal passed the same day, approximately 99.85% of voters voted in favor of “reclaiming” 10,936,284 unclaimed SUSHI tokens ($14.8 million) to be rewarded for early liquidity providers at the launch of the DEX in 2020.
SushiSwap Painful Loss and Recovery
Undoubtedly, the crypto winter has hit most projects in the industry, including Challenge platforms such as SushiSwap. Last December, SushiSwap CEO Jared Gray revealed that the DEX had suffered a $30 million loss in the past 12 months on liquidity provider (LP) incentives.
To counter this loss and start the recovery, Gray revealed plans to refine the tokenomics of SushiSwap so that LPs are no longer funded by emissions and to redesign the entire model of seeding liquidity on the exchange.
The “Kanpai” governance proposal, which seeks to transfer trading protocol fees to the Treasury, was also mentioned by Gray when he illustrated plans for updating the SushiSwap exchange.
“Simply put, this (Kanpai) allows the protocol to replenish its liquidity reserves to continue paying competitive salaries, paying for critical infrastructure, and diversifying its treasury with funds raised in core asset pairs, like ETH, stablecoins, etc. Kanpai is a temporary solution,” Gray said.
Speaking of SushiSwap, the protocol’s native token, SUSHI, has been on a rally, following the rest of DeFi sector.
SUSHI jumped over 40% in the last 30 days; meanwhile, at the time of writing, SUSHI is trading at $1.34, down 1.4% over the previous 24 hours and with a trading volume of $58.6 million over the same period.
Featured image from BlockchainReporter, chart from TradingView