Sushi's Ambitious Revamp May Be 'Too Complex'

Head Chef Jared Grey Aims to Roll Out NFT Marketplace and DEX Aggregator

By: Tarang Khaitan and Samuel Haig Loading...

Sushi's Ambitious Revamp May Be 'Too Complex'

It’s one of the most volatile DEXs in a space renowned for its torque. Now Sushi, the No. 5 decentralized exchange, has laid out an ambitious restructuring plan.

The question is, can it execute the blueprint when it took months of controversy just to select a new head chef, Jared Grey? And will it matter?


During the bear market, Sushi has been faring poorly compared to its rivals in the DEX space. Its TVL of $444M is now nine times smaller than it was 12 months ago. Uniswap’s TVL has only shrunk by about half in that period.

Plagued by in-fighting for much of 2022, Sushi also struggled to bolster confidence among investors at a time when exuding strength and stability were paramount. Its governance token has dropped 80% in the last 12 months compared to a 60% drop in Uniswap’s UNI coin.

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Under Grey’s plan, dubbed Sushi Revitalized and released on Monday, the project will roll out a DEX aggregation service and an NFT marketplace. Sushi also aims to launch an incubator dubbed Sushi Studios to develop new products.

“Sushi stands positioned to reinvent itself & globally promote the best principles of crypto,” Grey wrote in his post.

The proposal received limited support on Sushi’s governance forum.

A forum participant dubbed overly_ambitious criticized the plan for being “too complex” and said “to be 100% convinced I’d like to see a formula even the layman can understand.”

Governance Dashboard

Sushi is the fifth-largest DEX by total value locked with $525M, according to DeFi Llama, and the 17th-ranked decentralized exchange by daily trade volume with $15.7M, according to CoinGecko.

The roadmap targets the launch of Sushi’s DEX aggregator during this quarter. Grey said Sushi built the aggregation router in stealth mode last year. He said providing DEX aggregation services will bolster Sushi’s trade volume and treasury revenues.

Grey also said Sushi is working on a governance dashboard disclosing Sushi’s “budget, project wallets, and audit results for treasury expenditures.”

Grey described Sushi Studios as a “decentralized incubator that will license the [Sushi] brand to launch independently funded projects to support ecosystem growth without burdening the DAO treasury.”

He said the venture studio will launch Sushi’s long-awaited Shoyu NFT marketplace during the first quarter of this year. Grey added that a decentralized exchange for perpetual derivatives is among several stealth products currently being developed by Sushi Studios.

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Shoyu has been a point of contention for Sushi for many months, with the project remaining unfinished despite Sushi mobilizing significant funds to support the marketplace’s development. With Sushi funds already having been injected into Shoyu, the first foray of Sushi Studios appears unlikely to be entirely “independently funded.”

In December, Grey also pitched his vision for overhauling Sushi’s tokenomics. The project’s existing incentive schemes have been criticized for being inflationary and unsustainable, and are set to expire this year.

Grey panned Sushi’s previous xSushi staking program, stating it rewarded “non-sticky staking with zero-friction terms to give non-LPs optimal ROI.”

The head chef said his proposal will allocate the lion’s share of rewards to Sushi’s highest-volume pools. Sushi’s treasury would also capture one-sixth of Sushi’s 0.3% trading fees, with 0.25% going to liquidity providers.


It will also introduce time-locked tiers for rewards issuance which distribute more tokens to users willing to lock assets for longer periods. Liquidity providers can withdraw their assets at any time, but forfeit all rewards should they withdraw before the time-lock period has expired.

Grey’s proposal would target an annual inflation of between 1.5% and 3%, and introduce a buy-back-and-burn mechanism designed to place deflationary counter-pressure on SUSHI’s supply.

“Based on proposed deflationary actions, we aim to remain net neutral on supply,” Grey said.

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For all its ambition, the plan drew criticism. Tejus0x, a Sushi community member, slammed the proposal for continuing to maintain emissions. “No more SUSHI diluted. That’s how we got here,” they said.

The new roadmap comes after prolonged drama and infighting plagued Sushi in late 2021 and early 2022.

Grey was elected as the project’s new head chef in October after Sushi’s community pushed back against the nomination of Jon Howard. Howard was hand-picked by Sushi’s newly formed Compensation Committee in July, with critics decrying what many believed was an exorbitant pay package on offer for the position.

In the roadmap, Grey claims Sushi overhauled its business model with sustainability in mind, stating the team “took measures to secure [its] runway for multi-year operations.

However, Sushi has recently copped flak for increasing its operational budget, with its expenses growing more than 10% year-over-year while many other entities are tightening their budgets after the 2022 bear market.

Last month, Suhshi’s governance passed a contentious proposal from Grey to suspend the xSushi staking program and divert all of its revenues to Sushi’s treasury. Grey claimed the measure was a matter of existential importance to secure time and space for the project.

Critics warned that the move would trigger heavy selling pressure from xSUSHI stakers.