Decentralized exchange SushiSwap has received a positive sign to move forward with a controversial plan for a less decentralized business model.
According to a signal vote completed on April 10, more than 62% of voters supported the exchange’s proposal to transition to a so-called ‘labs model.'
SushiSwap introduced the proposal on March 26, leading to significant debate within its community. According to the plan, the exchange seeks to establish Sushi Labs, an autonomous administrative, technical, and operational company that would manage the Sushi ecosystem.
Tokenholders would still decide on treasury allocations, but without getting into operational details. The Labs would receive 25 million SUSHI (SUSHI) tokens, worth nearly $39 million at current prices. In addition, Sushi Labs will be designated as the exclusive recipient of any future airdrops from affiliated protocols and partners.
“We request that Sushi DAO award a grant of 25 million Sushi tokens to Sushi Labs, including assets from the Arbitrum airdrop, business development, and partner grants, Kanpai 2.0, Sushi 2.0, rewards, stablecoins, and ‘Sushi House’ funds.”
The next steps for Sushi’s community include voting on the implementation proposal by April 17. Nearly seven million tokens support it, representing a 92% approval rate at the time of writing.
A signal vote is an initial step to gauge the community’s interest or opinion on a proposal without implementing any changes. An implementation vote, on the other hand, is a subsequent step where the community decides if the proposal should be executed.
Sushi’ community reacts
At Sushi’s governance forum, several community members expressed their opposition to the proposed plan, voicing concerns regarding Treasury’s financial stability and allegations of voting power manipulation.
“I think it would be important to have a sizable amount of all revenues, airdrops included, going directly the the DAO treasury. This would not interfere with hiring, firing, or other operations [...] Treasury should not be ignored [...] I suggest a split of revenues between treasury and operations,” noted community member Nick Rishwain in the proposal’s thread.
Another member of the SushiSwap community, Naïm Boubziz, claimed on X (formerly Twitter) that the move was a hostile takeover. According to Boubziz, the core development team created new wallets prior to the vote in order to increase their voting power.
“It appears that Sushi DAO is at the end of its journey,” said another member on the governance forum.
Sushi “Head Chef” Jared Grey has responded to the criticism. “After consulting our legal counsel, I directed the operations team to execute the YAY vote with the OPs wallet and its holdings due to the threat of a hostile takeover,” he said on X in response to allegations of manipulation. Grey also noted that the Labs model will help Sushi recover lost market share:
“Much of the current product development roadmap’s limitations and delays stem from the DAO’s outsized ambition, unrealistic expectations, and budget constraints endorsed through snapshot votes from when Sushi’s resources were multitudes greater.”
SushiSwap’s revenue has been declining since 2022 despite the current bull market. According to DefiLlama data, the decentralized exchange generated $11.65 million in fees and $1.5 million in revenue in March 2023, compared to $3.5 million in fees and $531,640 in revenue last month.
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