DeFi Protocol Sushi to Shutter Lending Product to Focus on DEX
Popular decentralized finance (DeFi) application Sushi will sunset two products as part of broader plans towards making the protocol sustainable and profitable.
Chief technology officer Matthew Lilley said in a tweet thread last week that two products – the Kashi lending platform and MISO, a launchpad for external tokens – would be shuttered due to low public interest and the significant team effort that went into maintaining the two.
“We made the decision to deprecate Kashi (Sushi Lending) and Miso (Sushi Launch Pad),” Lilley said, adding that yet-unnamed “successors” to these products could be launched in the future once Sushi has the requisite resources to support their functioning.
Lilley said Sushi developers would focus more on the protocol’s decentralized exchange (DEX) product. “In Q3/Q4 it became obvious that there was a strong need to prioritize, and we decided to focus on ideas to improve our most loved and profitable product, the DEX, SushiSwap,” he said.
SushiSwap, the DEX, has over $390 million in locked token value as of Tuesday, per DeFiLlama data. Some $280 million of that is locked on Ethereum-based assets.
In contrast, Kashi has a little over $800,000 in locked assets, the data shows, suggesting poor demand for the lending product. It held nearly $40 million during its 2021 peak but has seen gradual outflows ever since.
2022 proved to be a difficult year for crypto lenders, with centralized companies like Celsius Network and Voyager Digital filing for bankruptcy after heavily relied-upon yields across DeFi dried up.
Since December, Sushi developers have been proposing and making changes to the protocol to ensure its long-term operational viability.
As CoinDesk reported, the Sushi treasury provided for only 18 months of runway calculated from the first week of December, causing a significant deficit in its treasury. Lead developer Jared Gray proposed setting Kanpai, a fee-diversion protocol, to 100% of fees diverted to the treasury multisig for one year at the time, or until new token distribution and reward schemes were implemented.
On Dec. 30, Gray proposed a token buyback, fee burns and rewards plan to the Sushi community. The proposal is seeing active discussions as of Tuesday.