The DEX, which launched at the peak of last year’s DeFi Summer with the “fair launch” mantra goading and staging a vampire mining attack on Uniswap, has unveiled a possible plan to give venture capitalists a stake in how the exchange is run daily.
SushiSwap’s anonymous lead developer and de facto leader, 0xMaki had on July 8 put forward a proposal making it cheaper for venture capitalists to guide the direction of the protocol. OxMaki’s original proposal suggests selling about a quarter of the governance tokens in its treasury at a 20-30% discount.
The Proposal Hasn’t Gone Down Well
As expected, the proposal elicits mixed reactions within the community of stakeholders. While top VC powerhouses like Polychain, Dragonfly Capital and Hashedare are charging to hop on board, crypto natives and the army of SushiSwap onboard from its early days have expressed shock and displeasure towards the proposed move. Notable among them is Jeff Dorman of Arca who is vehemently opposed to the proposal. According to a response from Dorman,
“Sushiswap does not need money, as indicated by 0xMaki himself. Sushiswap has $10.15M worth of SUSHI in its ops wallet 13 and $214M in SUSHI in its Treasury Wallet 8, so the asset mix is predominantly SUSHI tokens. We agree that there is merit to diversifying, but not at current prices. Current market conditions do not justify a raise of this size. If Sushiswap does need money, we’d like to see the justification for why $60mm is the right number. What are run-rate expenses and how much runway does $60mm give Sushiswap?”
“There are 3 reasons a company raises money – via debt, equity or tokens.” Dorman further argues that the first two reasons have been shut down and don’t pass the threshold to prompt SushiSwap to consider the proposal. The third is that:
“Company sees strategic benefits raising money from certain investors – if this is true, it has not been clearly articulated in an actionable plan on what these VC’s will bring to the table.”
While many others continue to register their displeasure to the proposed move on the Sushi forum, Sam Bankman-Fried FTX CEO and a onetime interim leader of SushiSwap during the twilight of the Chef Nomi saga appears to be somewhat in favour to the proposal even though it seems like he is playing the Devil’s advocate. Per SBF’s tweet,
“Because some VCs are really connected and influential and knowledgeable and smart. Some VCs will [expletive] fight for you. The second are the ones you want; if they’re also in the first group, even better.”
Proposal Unlikely to Pass
Although the proposal hasn’t been put for a vote on whether to ratify or reject it, from sentiments circulating around, the proposal may not pass.
Amidst all the reactions, 0xMaki having gauged the mood of the community, said that “all of the numbers need to be taken with a grain of salt” which may be interpreted as accepting defeat even before the proposal is put up for a vote.