June 16, 2024

SushiSwap Lost $30M in a Year on Liquidity Provider Incentives

Article Reading Time:
1 min.

SushiSwap Lost $30M in a Year on Liquidity Provider Incentives

Decentralized crypto exchange SushiSwap plans to change its business model to process more exchange transactions and earn more through fees.

CEO of decentralizedcryptocurrency exchange SushiSwap Jared Gray reported that over the past 12 months the exchange has lost about $30 million due to incentives for liquidity providers. According to the executive, his DEX is currently using a token-based issuance strategy to incentivize exchange participants, but the going rate is unsustainable.

SushiSwap is now planning to rework itstokenomics so that liquidity providers are no longer subsidized by issuance. And also completely revise the initial liquidity on the exchange. In the first quarter of next year, the DEX team plans to introduce innovations to scale exchange volumes.

Jared Gray spoke about the politics of completeSushiSwap's financial transparency - he promised that the exchange will release public dashboards for DAO activity in the first quarter of 2023. However, the initiative is currently under discussion. According to the head of DEX, this is not something that should be focused on right now.

Let us remind you that Gray previously reported that the communityThe exchange is actively discussing a proposal to transfer 100% of the remuneration of xSushi holders to the company’s balance sheet, since the project is running out of reserve capital to maintain work and development.