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SushiSwap Chef Suggests Inventing New Token Model – Will DEX Survive 2023?

On December 7thJared Grey, the CEO and “chef” of SushiSwapsuggested the DEX is burning cash like there’s no tomorrow.

According to the forum post Manufactured by Grey, the DEX has more or less a year and a half to go which led to the swap enacted an allocation of 100% from fees on its staking token xSUSHI.

However, this 100% allocation is temporary until the situation of the DEX improves or new tokenomics are enacted. Will this proposal be the answer to SushiSwap’s urgent situation?

New year, new tokenomics

Grey’s stream Suggestion, if passed, is a technical endeavor for the DEX that could save it from its current state. Under the proposal, liquidity providers or LPs will get a share of the 0.05% swap fee on the ecosystem.

SushiSwap Chef Suggests Inventing New Token Model – Will DEX Survive 2023?, Crypto Trading News

Diagram: Sushi Tokenomics Proposal PDF

They can also lock their liquidity to earn issuance-based rewards with a soft-lock system, meaning they can withdraw their liquidity before it’s due, but they lose their rewards.

xSUSHI rewards will also be updated. The token would lose its previous cut in fees and be replaced with an emissions-based reward system. The soft lock system has different rewards for different lock levels.

Emission APY will be around 1-3% according to forum post if specified. The new tokenomics would also introduce token burning in the form of buybacks of SUSHI and burning of the rewards when the locked liquidity or xSUSHI is pulled out.

As I promised in Sunday’s tweet regarding Sushi’s 2023 Budget Snapshot, I’m doing it DAO-Operating costs public. Transparency is a critical component of a successful DAO. You can see that most of the budget costs are salaries. 1/pic.twitter.com/rVHXEJSfLR

— Jared Gray (@jaredgrey) December 13, 2022

SushiSwap Chef Suggests Inventing New Token Model – Will DEX Survive 2023?, Crypto Trading News

Themes that are in the air for SushiSwap

Though the new tokenomics look solid, a comment on that December 7th Forum post shows otherwise. According to user GoldenNaimthe platform currently uses $4 million of the calculated operating budget of $5 million for wages.

This is incredibly troubling given that the team is left with a meager $1M to make SushiSwap better through innovation. Jared Gray’s answer to this is just:

“Yes, we need to pay people competitive wages to work at Sushi.”

SushiSwap Chef Suggests Inventing New Token Model – Will DEX Survive 2023?, Crypto Trading News

SUSHI Total Market Cap at $217 Million on the Daily Chart | Chart: TradingView.com

But it seems that the proposed tokenomics will have an impact on the price of SUSHI. Corresponding CoinGeckoSUSHI is up 1.8% over the past 24 hours, with the largest rally on the weekly timeframe coming in at 2.8%.

DEX fundamentals also look bullish cryptolaxia, a cryptofundamental and technical analysis platform, show that SUSHI is undervalued to some extent. If SUSHI is to recover from the market troubles in 2022, the token must Resistance break from $0.9849.

Over the course of the year we will see if SushiSwap will implement its proposed tokenomics and rescue it from its current state.

-Magazine for restaurant business


Source: Crypto News Deutsch

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