SushiSwap team treasury takeover looks likely despite heated debate

A controversial proposal to change SushiSwap’s treasury structure by the team behind the decentralized exchange looks like it may go through despite vocal opposition to the proposal on social media.

The SushiSwap team made a controversial governance proposal on March 26 to “significantly evolve Sushi by adopting a Labs model.”

It aims to restructure the current organization to “enhance operational efficiency and accelerate protocol development.”

However, it includes a controversial tokenomics overhaul that aims to deploy decentralized autonomous organization (DAO)-controlled Sushi Treasury’s assets — around 25 million tokens worth roughly $42.5 million — to Sushi Labs.

We request that Sushi DAO award a grant of 25 million Sushi tokens to Sushi Labs, including assets from the Arbitrum airdrop, business development, and partner grants, Kanpai 2.0, Sushi 2.0, rewards, stablecoins, and ‘Sushi House’ funds.

“The revisions will include a singular mint of 25M tokens granted to Sushi Labs and the introduction of a 1.5% APR (baseline) to bolster liquidity, incentivize participation, and fortify the Treasury,” it added.

There is a current maximum supply of 250 million SUSHI (SUSHI $1.65) tokens under the existing tokenomics model. 

Additionally, Sushi Labs will be the sole beneficiary of future airdrops awarded by protocols and partners.

Voting began on April 3 and is set to end on April 10. So far, around 29 million SUSHI has been pledged, which is more than enough to reach a quorum.

Voting for either outcome was pretty evenly matched until recently when it tipped in favor of the “yays.”

At the moment, only a third of the votes — 9.7 million tokens — have been lodged against the proposal.

Among the whale voters was the Sushi Labs team, which made the proposal and pledged 5.5 million tokens in favor of it. A key opposer went under the “sushicitizens.eth” address and pledged 4.4 million SUSHI against it.

Former SushiSwap contributor Naïm Boubziz claims that the team voted for themselves using the protocol’s multisignature wallet after reporting that it had tried to get 4 million SUSHI from the treasury multisig in early March.

Source: Naïm Boubziz

There were also accusations that the Sushi team took out a loan in order to vote for their own proposal. On April 4, Boubziz said that “they borrowed money for a few hours to add liquidity in order to double their voting power for snapshots.”

Sushi “Head Chef” Jared Grey, however, defended against the critics in an April 8 post on X who accused Sushi Labs of manipulating the vote by adding liquidity just before the vote and then removing it afterward, deleting snapshots and voting with the multisig Ops address.

“After consulting our legal counsel, I directed the operations team to execute the YAY vote with the OPs wallet and its holdings due to the threat of a hostile takeover,” he said.

Source: Jared Grey

The decentralized exchange protocol is no stranger to power struggles. SushiSwap launched in 2020, surging past industry leader Uniswap following a vampire attack.

However, its pseudonymous founder, “Chef Nomi,” reportedly attempted a rug-pull shortly after plunging the protocol into controversy, infighting and the internal chaos that has continued ever since.

SUSHI was trading at $1.70 at the time of writing, down 93% from its all-time high three years ago in March 2021.