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Decentralized exchange SushiSwap has rebranded as Sushi Labs, an autonomous company replacing the protocol’s decentralized autonomous organization (DAO), although the SushiSwap name will still be used for its DEX-focused operations.
In a bid to address slowing growth and liquidity issues, SushiSwap has introduced a new business model under the name Sushi Labs. The revamp replaces the decentralized autonomous organization (DAO) with a “council structure” similar to that of derivatives protocol Synthetix.
Sushi Labs will operate under four councils: the Sushi High Kitchen, the Treasury Council, the Grants Council, and the Ambassador Council. The High Kitchen, comprising six to eight members, will serve as the central governing body overseeing a multisig setup for transactions.
Sapphire
Jared Grey, now Sushi Labs’ managing director, asserted that the new organizational structure, budget, and leveraging of successful products like Route Processor will help enhance liquidity on the Sushi DEX.
“Many attribute Sushi’s stagnated growth and AMM liquidity issues to LPs migrating to other DEXs and seeking better yield. However, with our newly established organizational structure, sufficient budget, and leveraging successful products like Route Processor, we have the tools to enhance liquidity on the Sushi DEX,” Grey explains.
The transition also involves a shift to a multitoken product suite, which Sushi claims will help distribute product costs and provide more reward opportunities for token holders.
While the move has sparked debate and criticism for its centralized nature, with some community members accusing the protocol of a hostile takeover, Sushi maintains that the changes are necessary to address financial challenges and improve liquidity management.
The decentralized exchange generated $1.62 million in fees in May 2023, a sharp decline compared to its performance during the previous bull cycle.
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