- Sushi DAO Community passed a proposal to clawback 8.2 million unclaimed SUSHI into the Sushi treasury
- The liquidity providers have 3 months to claim their tokens or lose them to the treasury.
- The Sushi treasury will also receive all fees earned from transactions as a way to reduce the significant deficit it faces.
Members of the Sushi DAO Community voted in support of rolling 8.2 million unclaimed SUSHI, worth $11 million at the time of writing, into the treasury. These tokens were initially offered as rewards to the early liquidity providers during the SushiSwap launch in 2020.
In the first six months after Sushiswap was launched, the liquidity providers, those who stake their assets on the dApp in return for a share of the earned transaction fees, were rewarded with SUSHI tokens. More than two-thirds of these accrued rewards were locked up and vested for an additional six months in a smart contract called the Sushi Vesting Merkle Tree, after which they could be retrieved.
Despite the tokens being fully unvested last year, more than 8.2 million SUSHI still need to be claimed. As such, the Sushi community proposed reclaiming all the tokens from the smart contract and depositing them directly into the Sushi treasury.
On introduction in April 2022, the proposal attracted mixed sentiments, which users expressed on the discussion forum. Some sushi holders did not support the proposal suggesting that the owners of the unclaimed tokens should be contacted. A pseudonymous user, CryptoLamer, stated that:
” People have earned these SUSHI fair and square, and we should not deny them the right to claim whenever they want – it was never mentioned that there will be an end period, so changing the rules may have a negative effect on our image.”
Others thought it a waste to idle the tokens and supported that the SUSHI is put into the treasury.
During the vote, the proposal was supported and passed by 99.85% of community members against the opposition of 0.14%. This vote ratio surpassed the minimum quorum requirement of 5 million SUSHI by 1.8 million SUSHI.
The liquidity providers yet to claim their SUSHI tokens were given until 9:00 am ET on 23rd April 2023, precisely three months after the proposal was voted in, to do so. After that, the intelligent Tree Merkle contracts will be frozen, and the tokens retrieved.
In Favor of Strengthening the Treasury
The Kanpai proposal, which recommended that all trading fees accrued from transactions on the platform be directed to the Sushi treasury instead of xSushi holders, was also voted for and passed by 6.7 million SUSHI votes (99.9%).
Initially, the xSushi tokens were issued as rewards to users who staked tokens on Sushiswap, where a user received a 0.05% reward from each trade, and 10% was sent to the Sushi treasury. However, the passing of this proposal has led to 100% of the fees being directed to the treasury hence no rewards for xSushi holders.
The Kanpai proposal was set up to address the significant deficit in the Sushi treasury, which threatened the platform’s sustainability. The proposal, which was termed a “temporary solution to a long-term problem,” will now be implemented for a year, that is, until 19th December 2023. Until then, the developers and community are expected to have developed and proposed new tokenomics that will serve as a long-term value proposition of Sushi for stakeholders
