Sushiswap Smart Contract Bug Results in Over $3M in Losses; Head Chef Says Hundreds of ETH Recovered

April 10, 2023 Bitcoin.com

Sushi’s head chef addresses community concerns amid SEC subpoena

April 9, 2023 Coin Telegraph

Sushi’s head chef Jared Grey and his counsel described the investigation as a “non-public, fact-finding inquiry,” that doesn’t suggest the SEC has “any negative opinion of any person, entity or asset" related to the DAO.

Japan-based decentralized autonomous organization (DAO) Sushi's head chef Jared Grey and his counsel stated that as far as they know, no one associated with Sushi has violated U.S. federal security laws, while providing reassurance that he is cooperating with the United States Securities and Exchange Commission (SEC) subpoena.

In an April 8 statement, Grey answered the most commonly asked questions from the community in an FAQ format regarding the subpoena served to him, suggesting it is unknown what actions the SEC will take towards others associated with Sushi in the future.

“We do not know, one way or the other, whether the SEC has purported to serve a subpoena on any other person or entity that it believes represents the Sushi community” it was noted.

Grey assured the community that the investigation does not imply any wrongdoing. He stated:

“The investigation does not mean that the SEC has concluded that Jared, Internet Three Software Company, or Sushi has violated any law. Also, the investigation does not mean that the SEC has a negative opinion of any person, entity, or asset.”

Grey acknowledged the Sushi DAO legal defense fund – a dedicated $3 million he proposed to the community on March 21 after the subpoena was served – stating he is trying to ensure adequate funds to “handle legal needs for operational continuity and protect core contributors.”

He emphasized that any unused funds in the Sushi DAO Legal Defense Fund shall be refunded, provided that all legal costs have been covered.

Following the statement, Grey told his Twitter followers on April 9 that they can expect Sushi’s newly deployed concentrated liquidity model, V3, to be officially announced next week.

We've yet to officially announce V3 on Sushi (early next week, homies), but we've already noticed a 100% increase in V3 TVL in the past 24 hours. Things will get interesting over the coming weeks, with 30+ networks supporting V3 on the second most OG DEX, Sushi.
— Jared Grey (@jaredgrey) April 8, 2023

Cointelegraph reached out to Grey for comments but stated he “can’t comment further than what the FAQ provides.”

This comes after news on Feb. 1 that MakerDAO, the issuer of DAI (DAI) launched a $5 million legal defense fund, dedicated to legal expenses, to serve as a self-insurance tool for its participants, as the developers pointed out that such costs could not be transferred through traditional insurance.

Magazine: US enforcement agencies are turning up the head on crypto-related crime

SushiSwap’s new DEX aggregator will ’10x our market share’ — Head Chef

January 17, 2023 Coin Telegraph

2023 plans

SushiSwap’s roadmap for the coming year includes the development of a DEX aggregator, a decentralized incubator, and "several stealth projects."

Just a month after warning of a "significant deficit" in its treasury, the CEO of decentralized exchange (DEX) SushiSwap has shared several planned updates to the platform which it says is intended to "10x" its market share in 2023.

Sushi CEO Jared Grey laid out the plans for the decentralized finance (DeFi) platform in a Jan. 16 Medium post saying it will focus on its product stack in line with prior plans to make Sushi more sustainable.

"Sushi commands ~2% of the AMM market & 0% of the aggregation market. By executing our vision, we intend to 10x our market share in 2023."

Newly announced plans include a DEX aggregator set for launch in Q1 and a “decentralized incubator” on the cards for 2023.

Grey said the upcoming DEX aggregator — a tool giving users access to various DeFi protocols — was built in “stealth mode” throughout last year, and is part of its plans to drive scalability and sustainability of its business.

Read how we're revitalizing @SushiSwap in 2023!https://t.co/KTnNgtUMaw
— Jared Grey (@jaredgrey) January 16, 2023

Grey also laid out the vision for Sushi Studios, a so-called decentralized incubator where Sushi will help launch self-funded projects “to support ecosystem growth without burdening the DAO treasury.”

He added “several stealth products” are currently in development along with its long-awaited nonfungible token (NFT) marketplace Shoyu expected for a first-quarter launch and a perpetual DEX platform.

The push for more offerings comes after a Dec. 6 governance proposal put forward by Grey revealed Sushi’s treasury only had one and a half years of runway left that “threatens Sushi’s operational viability.”

On Dec. 11, Grey said the DEX lost $30 million over the prior 12 months on incentives for liquidity providers (LPs).

Later that month he put forward a proposal to redesign the tokenomics of the SushiSwap (SUSHI) token to try to strengthen Sushi’s treasury reserves.

Grey confirmed in his latest post that "we took measures to secure our runway for multi-year operations."

As for Sushi’s other 2023 plans, the platform is also building a governance dashboard and focusing on user experience.

The dashboard showcases Sushi's budget, crypto wallets for each project and Treasury expenditure audit results.

“Ultimately, we will provide deep liquidity, optimal pricing, sustainable tokenomics, & an easy-to-use platform, placing you first in everything we build,” Grey said.

SushiSwap CEO reveals DEX lost $30M on LP incentives this year

December 12, 2022 Coin Telegraph

SushiSwap CEO reveals DEX lost M on LP incentives this year

Coin Telegraph

"Ultimately, we must harden the business model to produce more swap volumes & generate more fees," wrote CEO Jared Grey.

According to a new Twitter post by SushiSwap CEO Jared Grey, the decentralized exchange, or DEX, experienced a $30 million loss in the past 12 months on incentives for liquidity providers, or LPs. As explained by Grey, SushiSwap currently employs a token-based emission strategy to incentivize LPs, but the current rate is "unsustainable."

"We commissioned Flipside to build dashboards to showcase these results; we'll make them available by EOY."

Moving forward, Grey plans to rework SushiSwap's tokenomics so that LPs are no longer subsidized with emissions and redesign the entire model of bootstrapping liquidity on the exchange. " In Q1 2023, we will bring innovation to scale swap volume & prioritize TVL. As LPs experience a more profitable swap experience, others should migrate to Sushi," wrote the DEX executive.

A Sunday @SushiSwap thread. I want to readdress the chatter regarding the Kanpai proposal & highlight upcoming tokenomics improvements. I want to emphasize key factors in Sushi's business model & how we plan to improve it in Q1 '23. 1/
— Jared Grey (@jaredgrey) December 11, 2022

Grey also turned his attention to promoting the "Kanpai" governance proposal, which will divert trading protocol fees earned as rewards from SUSHI stakers into the SushiSwap treasury. Previously, Grey disclosed that the SushiSwap treasury had only 1.5 years of runway left.

"Put simply, [Kanpai] it allows the protocol to rebuild its cash reserves to continue to pay competitive wages, pay for critical infrastructure, & to diversify its Treasury with funds collected in the base pairs of assets, like ETH, stablecoins, etc. Kanpai is a temporary solution."

Curiously, Grey has remained opaque concerning the design of the new SushiSwap for now, stating that he will provide "full financial transparency by releasing public dashboards for DAO & Treasury activity" in Q1 2023. When pressed by a community member on the matter, Grey responded:

"I've discussed it at length in the Sushi Discord, on community calls, AMAs, and more. The official whitepaper comes out by EOY. No one is saying, "trust me, bro" I'm saying full details come out at that time."

Sushiswap chief says it only has 1.5 years of treasury runway left

December 6, 2022 Coin Telegraph

Coin Telegraph

The DEX's operating expenses currently amount to $5 million per year.

According to a new proposal dated Dec. 6, Jared Grey, CEO of decentralized exchange Sushiswap (SUSHI), disclosed that the project's Treasury has less than 1.5 years of runaway left, and the "significant deficit in the treasury threatens Sushi's operational viability, requiring an immediate remedy." Grey explained that Sushiswap's annualized operating expenses amounted to roughly $9 million in October, however, that has since been reduced to around $5 million.

"We made the reduction possible by renegotiating infrastructure contracts, scaling back underperforming or superfluous dependencies, and instituting a budget freeze on non-critical personnel and infrastructure."

To remedy the situation, Grey proposed setting Sushiswap's "Kanpai," or the amount of fees diverted to its Treasury, to 100% for "one year or until new tokenomics are implemented." This would come at the cost of SUSHI stakers, who typically earn the trading and protocol fee rewards in return for locking their tokens. In addition, Grey illustrated why it wasn't feasible to simply use SUSHI tokens to fund expenses:

"However, as previously stated, Sushi is currently near full distribution of its token supply and has yet to capitalize on opportunities to diversify its Treasury and provide the necessary liquidity for ongoing operations."

Going forward, Grey called for the implementation of "a holistic token model that allows for the rebuilding of the treasury and delivers value for all stakeholders while reducing the fiscal liability carried solely by the protocol." The CEO then warned that such measures "will take time to implement" and may not come online until the third quarter of 2023. Like similar projects, Sushiswap has been hit hard by the ongoing crypto winter, with its SUSHI tokens losing 79% of their value over the past year. It is currently ranked the 10th most popular decentralized exchange, with a 24-hour trading volume of $42 million.

Jared Grey

Share this video