SushiSwap evolves into Sushi Labs, repositions DAO with new council structure
Sushi Labs will manage SushiSwap with council structure, with the aim of boosting the DEX' liquidity.
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Decentralized exchange SushiSwap is evolving into Sushi Labs, an autonomous company that would supervise the protocol’s decentralized autonomous organization (DAO), although the SushiSwap name will still be used for its DEX-focused operations.
In a bid to address slowing growth and liquidity issues, SushiSwap has introduced a new business model under the name Sushi Labs. The revamp shifts the decentralized autonomous organization (DAO) with a “council structure” similar to that of derivatives protocol Synthetix.
Sushi Labs will operate under four councils: the Sushi High Kitchen, the Treasury Council, the Grants Council, and the Ambassador Council. The High Kitchen, comprising six to eight members, will serve as the central governing body overseeing a multisig setup for transactions.
Jared Grey, now Sushi Labs’ managing director, asserted that the new organizational structure, budget, and leveraging of successful products like Route Processor will help enhance liquidity on the Sushi DEX.
“Many attribute Sushi’s stagnated growth and AMM liquidity issues to LPs migrating to other DEXs and seeking better yield. However, with our newly established organizational structure, sufficient budget, and leveraging successful products like Route Processor, we have the tools to enhance liquidity on the Sushi DEX,” Grey explains.
The transition also involves a shift to a multitoken product suite, which Sushi claims will help distribute product costs and provide more reward opportunities for token holders.
“As Sushi progresses, the DAO structure evolves, too. Encompassed with the recent Burū no Shinka proposal implementation, we move the DAO into a more resilient and global model that provides the necessary protections for contributors and stakeholders we’ve sought for years,” Grey said in a community memo.
While the move has sparked debate and criticism for its centralized nature, with some community members accusing the protocol of a hostile takeover, Sushi maintains that the changes are necessary to address financial challenges and improve liquidity management, leveraging the new council structure which was designed to empower the community and maintain transparency.
The decentralized exchange generated $1.62 million in fees in May 2023, a sharp decline compared to its performance during the previous bull cycle.
Erratum
We apologize for the inaccurate coverage in the previous version of this article, initially titled as “SushiSwap dissolves DAO, repositions as Sushi Labs with new council structure.”
The errors on the previous version have been rectified and we have provided clarifications. Contrary to our report, the Sushi DAO is not being dissolved. It continues to play a crucial role in governance and decision-making, operating alongside Sushi Labs. While Sushi Labs will drive product innovation and development, the decentralized nature of Sushi’s governance remains intact. Additionally, Jared Grey’s role encompasses broader responsibilities, including strategic product development and ecosystem expansion.
We regret any confusion caused and are committed to providing accurate information in the future. We would like to thank April Wong, CMO at Sushi, who reached out to Crypto Briefing for clarifications.
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