SushiSwap Burns $5 Million Per Year, But Will It Rebrand In 2023?
02 March 2023 - 12:30AM
NEWSBTC
SushiSwap, a popular multichain decentralized exchange (DEX), burns
approximately $5 million annually, its chief chef, Jared Grey,
revealed on February 28. SushiSwap Holds $30.6 Million Worth Of
Digital Assets In a tweet, Grey said the protocol holds $30.6
million worth of multiple assets, diversified across Ethereum,
Wrapped BTC (WBTC), stablecoins, and more. A big chunk, roughly 33%
of their treasury, is denominated in SUSHI, the native governance
token of the DEX. Presently, Sushi holds ~30.6M USD in
assets. Our burn rate is ~5M USD/yr. Also, we're on pace to earn an
annualized return of ~14M USD in new fee revenue. As a result,
we're positioned for high growth to become the premier cross-chain
DEX with our 2023 roadmap. pic.twitter.com/tJBq6csPOE — Jared Grey
(@jaredgrey) February 28, 2023 SushiSwap expects to earn even more
in the next nine months, increasing their annualized return to
around $14 million. The increase, Grey explained, is because of the
implementation of a new fee model following the approval of the
Kanpai Treasury Allocation proposal. Related Reading:
SushiSwap Head Chef Suggests Cooking Up New Token Model – Will The
DEX Survive 2023? The Kanpai proposal, floated by Jared Grey,
returns 100% of xSUSHI revenue to the platform’s treasury for 12
months from Q4 2022. Typically, holders of xSUSHI, a token
SUSHI stakers receive when they lock their tokens, receive 0.05% of
the trading fee, with 10% initially going to the DAO
treasury. The decision to divert all trading fees to the DAO
was to fortify the protocol against the extremes of last year’s
bear market, building its treasury. A bigger treasury will protect
the DAO from a liquidity crunch. At the same time, as part of
the Kanpai proposal, SushiSwap reduced its annual expenditure from
$9 million to the current $5 million. Because the Kanpai proposal
reduces stakers’ revenue, the protocol will encourage stakers to
lock in for longer for higher rewards via the Vote Escrow (VE)
model. Building Will Continue, But Will They Rebrand? Like other
DeFi protocols, SushiSwap activity dropped during the crypto winter
of 2022 when asset prices fell. The contraction also impacted the
number of tokens traded across various exchanges. At peaks in
late 2021, SushiSwap had over $8.26 billion in Total value locked
(TVL), but this has since dropped to $536 million when
writing on March 1, 2023, according to DeFiLlama. SushiSwap remains
a popular DEX facilitating the swapping of tokens in Ethereum,
Arbitrum, BNB Smart Chain (BSC), Fantom, Boba Network, and more.
Even so, a big chunk of SushiSwap’s TVL is in Ethereum and
Arbitrum, the Ethereum layer-2 platform. Related Reading: Sushiswap
Cracks 24% Gains As Market Rebounds; Is This A Fakeout? SushiSwap
continues to be operational, with some observers saying it has
outgrown its past. The DEX forked from Uniswap and, through a
“vampire attack,” siphoned TVL from the Hayden Adams-led
exchange. Even as they grow, a SushiSwap developer said they
would continue launching updates but will remain curious to
hear what kind of rebrand the community wants. Feature image from
Canva, Chart from TradingView
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