A SushiSwap governance proposal to sharply increase the SUSHI token’s annual emission rate (AER) passed on Sunday, Dec. 14, with the vote demonstrating just how concentrated decision-making on the decentralized exchange protocol can be.
The vote to lift annual emissions more than threefold, from 1.5% to as much as 5% of total supply, was decided almost entirely by a single wallet, 0xFf…492. That address controlled about 99.9% of the roughly 5.2 million voting power cast, with no votes against or abstentions, per Snapshot voting details.
Under the proposal, SushiSwap can issue up to about 14.25 million SUSHI a year, compared with roughly 4.3 million previously. The additional tokens are intended to support liquidity mining, new token listings, private liquidity arrangements and growth incentives linked to SushiSwap’s aggregator.
“The main goal of increasing AER is not to spray emissions, but to use SUSHI as a tool to structure long-term, aligned liquidity deals. Allocating SUSHI needs to be accretive to the long-term revenue model of the Sushi protocol,” Sushi Labs, the team behind the DEX, explained in the proposal.
Rebuilding Liquidity
The developers argue that higher, more targeted emissions are needed to rebuild liquidity on core networks such as Ethereum and Base, while working toward an annual recurring revenue target of $20 million.
Around the time the vote concluded, SUSHI was trading near $0.31, but dropped sharply this morning to near $0.29, according to data from The Defiant’s price tracking page. The token is down across timeframes, as much as 86% on the year.
The outcome comes at a sensitive time for SushiSwap. As The Defiant previously reported, SushiSwap’s leader, Jared Grey, stepped down from his longtime position as “head chef” in early December. He will remain involved as an advisor moving forward. This is the second major leadership change for SushiSwap in three years.
As of press time, the total value locked on the protocol stands around $108 million, a far cry from its all-time high of over $8 billion in November 2021, per data from DefiLlama.
