DeFi Protocol Sushi Passes Two Governance Votes to Strengthen Treasury
Token holders from the Sushi community have voted on two separate proposals that aim to strengthen the decentralized finance (DeFi) service’s treasury and long-term staying power.
Both proposals were passed independently with a majority of votes by tokens holders, who staked sushipowah and xsushi – two Sushi ecosystem tokens – on Sushi’s governance forums.
Sushi, like other DeFi applications (dApps), relies on smart contracts to provide financial services such as trading, borrowing and lending to users. It was one of the earliest dApps and locked up over $459 million in tokens as of Tuesday, down from a lifetime peak of $7.5 billion in 2021.
The ‘Kanpai’ proposal aimed to direct all trading fees from xsushi holders to the Sushi treasury, while the other sought to claw back unclaimed sushi tokens from a distribution held in 2021 back to the treasury.
xSushi tokens were issued to users who staked tokens on the trading platform SushiSwap allowing them to receive 0.05% as a reward from each trade. Of this, 10% was directed to the SushiSwap treasury. However, as a result of Monday’s proposal decision, 100% of all fees will be sent to the treasury, leaving no rewards for xSushi holders.
This model is scheduled to last for nearly one year until Dec.19, 2023, during which the community is expected to propose and pass a new rewards distribution model. Developers have previously stated that Kanpai was a “temporary solution to a long-term problem,” as CoinDesk reported.
The Sushi DAO community voted in favor of retrieving 8.2 million SUSHI, just over $11 million at writing time, which were initially rewarded to early liquidity providers (LPs) during SushiSwap’s launch in 2020.
LPs are people or entities who supply assets to any dApps in return for a cut of fees generated from financial activities on that dApp or related products.
During the first six months after SushiSwap’s launch, LPs were rewarded with SUSHI tokens with over two-thirds of the accrued rewards locked up and vested for an additional six months.
These tokens were fully unvested last year, but over 8.2 million SUSHI remained unclaimed. The Sushi community then proposed, and successfully voted in favor of, capturing these unclaimed tokens to further bolster its treasury.
LPs have until Apr. 23 to claim the tokens, should they want. All unclaimed tokens after that date will be sent to the treasury.