According to a proposal posted on December 30 in the Sushi forum, Jared Grey, CEO of the decentralised exchange SushiSwap, intends to redesign the SUSHI token’s tokenomics, as reported by Cointelegraph.
A token-burning mechanism, a liquidity lock, and time-lock tiers for emission-based rewards will all be included in the new proposed tokenomics model. Along with strengthening “treasury reserves to ensure continual operation and development,” Grey noted that the new tokenomics aims to increase liquidity and decentralisation in the platform.
The proposed model would allocate 0.05% of swap fees revenue to liquidity providers (LPs), with higher volume pools receiving the largest share, Cointelegraph noted.
SushiSwap disclosed that it had less than 1.5 years of runway left in its treasury, indicating that a significant deficit was endangering the exchange’s ability to operate. This led to the redesign of tokenomics.
According to Cointelegraph, SushiSwap lost $30 million on incentives for LPs over the previous 12 months as a result of the token-based emission strategy, which prompted the launch of the new tokenomics model, Cointelegraph further noted.
(With insights from Cointelegraph)