SushiSwap CEO Announces New Token Economics Proposal, Aiming to Promote Decentralization Through Sustainable Reward Mechanism
January 1st, 2023

According to The Block, SushiSwap's new CEO Jared Gray announced a new token economics proposal aimed at increasing liquidity, creating more utility for its native token SUSHI, and maximizing value for stakeholders. The formal proposal stated that "like the xSushi model that was originally hoped to be realized, the main goal of the new economics is to promote decentralized ownership and reward liquidity growth through a holistic and sustainable reward mechanism that scales with volume and fees .” The proposal outlines four key changes to the protocol’s token economics. The biggest change is that staking SUSHI (xSushi) will no longer receive transaction fee income rewards, but emission-based rewards. The liquidity provider of the trading pool with the largest trading volume will receive most of the Swap fee. Additionally, users can opt for a new time-lock mechanism to increase rewards. The floating ratio transaction fee will also be used to repurchase and destroy SUSHI from the open market, and lock in liquidity to provide more price support. The last change is to adjust the emission of SUSHI to 1-3% per year to reduce inflation and strike a balance between overall emission and repurchase, destruction and locked liquidity.

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