- SushiSwap to shut down Kashi due to design flaws and Miso due to a lack of resources.
- With a long-term goal to focus on exchange elements.
- Announces new and revived tokenomics, benefiting both parties.
SushiSwap, an Ethereum-based Decentralized Finance (DeFi) protocol, has decided to shut down its lending protocol Kashi and token launchpad Miso. Created in 2020 by a pseudonymous individual or group called Chef Nomi, SushiSwap allows customers to lend, borrow and swap cryptocurrencies using their external wallets, for example, MetaMask, contrary to practice when compared with Coinbase.
In a tweet, Mathew Liley, the group’s Chief Technology Officer (CTO), explained the reason behind this shutting down.
Kashi had many design flaws, was running at a loss, and was dictated by a lack of resources. While Miso only suffered from a lack of resources.
Mathew also discussed the long-term plans, that once all the necessary resources are acquired, SushiSwap is planning to launch new staking and launchpad products to replace the soon-to-be-defunct services.
This long-term goal needs to focus more on the exchange element, as Lilley describes it as ‘inarguably the breadwinner of the company.’
SushiSwap Struggles
This harsh decision comes when the platforms are already facing considerable financial uncertainty. The firm’s December update announced that only 18 months of operating cost remain and “the situation requires immediate action to ensure sufficient resources for uninterrupted operation.”
Jared Grey, CEO SushiSwap said that the company has been working on a strategy that includes altering infrastructure contracts and cutting back on underperforming or superfluous dependencies. Along with enforcing a budget freeze on non-critical personnel and infrastructure expenses, this ll had been a part of cost-cutting on the yearly expenditure of $ 5 million.
The company lost $30 million in the last 12 months; the same was announced in a tweet by Grey.
Grey pointed out that the losses were due to Sushi’s emission-based rewards program, and a plan needed to be set out to align the platform’s Total Value Locked (TVL) with its Liquidity Providers (LPs).
New Tokenomics
Amid all this, SushiSwap is about to undergo a soft rebranding to be named just Sushi, and now they are planning to completely redesign their tokenomics. The proposed model will have time-lock tiers to be introduced for emission-based rewards.
And the token-burning mechanism and liquidity lock for price support. All this is aimed at boosting the decentralization and liquidity of the platform, and it would strengthen the treasury reserves to ensure continual operation developments.
The new model proposes that Liquidity Providers (LPs) receive 0.05% swap fees revenue, and the higher volume pools will receive a bigger share. LPs are also provided with the opportunity to lock for earning boosted emission-based rewards.
If in case the rewards are removed or withdrawn before the stipulated date, they will be burned and forfeited.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/01/03/sushiswap-to-shut-kashi-and-miso-announces-new-tokenomics/