SushiSwap has been mired in drama recently, with accusations flying, factions reportedly forming in the team and its CTO resigning. One of token holders biggest hopes throughout — as price and volume slips — has been that core developer 0xMaki would return. Those hopes may be dashed.
Maki, who stewarded SushiSwap in its early days and left the DEX on Sep. 17, told The Defiant he won’t return full-time to the project.
“I won’t be returning but will be advising/mentoring any individual or group of people who will be leading it for the next years,” the SushiSwap co-founder said over Twitter DM Wednesday.
Maki said he will begin working full-time in mid-January for a project currently in stealth mode. He is also advising projects like Tokemak, TraderDAO, and PieDAO, among many others.
In a further shakeup, Sushi CTO Joseph Delong announced his departure from the project on Dec. 8. Delong did not give any specific reason for leaving in his thread, and recommended installing a management team.
“The chaos that is occurring now is unlikely to result in a resolution that will leave the DAO as much more of a shadow than it once was without a radical structural transformation,” he wrote.
All this infighting has taken a toll: SushiSwap’s token has lost half its value in the last 30 days. The turmoil has left one of the most popular platforms in DeFi fighting for its viability even as rivals like Uniswap are thriving. It also demonstrates the challenges of running a decentralized organization that’s experienced rapid growth. With skepticism about its structure and culture swirling, SushiSwap’s response may show this new breed of organization can overcome growing pains, or fall victim to them.
Indeed, a rescue plan for SushiSwap is picking up momentum. Alex Woodard, research analyst at the investment management firm, Arca, and Dean Eigenmann of the digital asset fund Dialectic, have introduced a proposal to restructure Sushi DAO, the decentralized organization which oversees Sushi. The overall thrust of the proposal is to add more structure and transparency in how Sushi is run.
“We think that cleaning up the DAO structure will be a way to accelerate Sushiswap to the next stage,” Eigenmann told The Defiant. “We’ve worked closely together with the core team and investors to get this over the finish line.”
One of the primary suggested changes is to create a “legal entity that provides oversight and protection over the contributors.” Further explanation of what the “entity” would be is limited in the proposal, leading a user, hhk, responding that “the entity part needs more details.”
GoldenNaim, as they go on the forum and who is Sushi’s head of trading, asked “what type of entity? Which country? Who will own this entity?” in his response.
Woodard, who co-wrote the proposal suggested that he’ll defer to the Sushi legal team on the type and location of the entity, but sees the Sushi treasury as owning the entity as well as project assets like the sushi.com domain.
The restructure proposal also outlines the creation of Product Teams, whereby contributors are assigned certain roles, for example front-end dev, for one or more of Sushi’s five main products, which include MISO.
The proposal further states that signers on the operational multisig, which receives 200K SUSHI tokens a month and is primarily used to pay contributors, are chosen with governance via polls, rather than in non-public channels.
Sushi was born in September of 2020, billing itself as a more community-led fork of Uniswap, offering its users a token at a time when the unicorn-branded automated market maker didn’t have one. The DAO ethos that garnered DeFi users’ support, is proving to be a double-edged sword as the project appears to be reaping the consequences of a lack of structure and unbridled personality clashes.
Sushi’s struggles came to the fore on Nov. 24 when a former contributor tweeted, “Sushi is failing sadly. hope bad actors can be called out n removed.”
The ex-Sushi employee who goes by the Twitter handle AGdyor, went on to say that “Sushi is no longer a community-driven project but JORKN’s *company*,” referring to “Joseph, Omakase, Rachel, Keno, Nori,” in the leadership team.
AGdyor went on to say that one those four members of the leadership team, excluding Keno, must sign-off on hiring decisions.
Another ex-Sushi team member raised the issue that some people received bonuses or disproportionately high amounts of the 2.6% of the total supply of BitDAO tokens which were transferred to Sushi. BitDAO bills itself as a DAO aiming to “support builders of the decentralized economy,” according to the project’s docs. The tokens were part of a sale carried out on MISO, a token launchpad created by Sushi.
Plus, there is the rumor that Maki was kicked out, as raised by BoringCrypto, as they go by on Twitter. BoringCrypto also brought up the issue of the BitDAO tokens.
Now SushiSwap must address undertaking major changes like the ones prescribed by Woodard, Eigenmann as it struggles to grow up and become an enduring force in web3
“As DAOs become more powerful & common, regular token holders are going to quickly understand why CEOs of billion dollar companies get 8 figure salaries + 9 figure equity packages,” angel investor and advisor Tyler Reynolds, tweeted about the proposal.