SushiSwap Ditches DAO for Controversial "Labs" Model

On June 11, SushiSwap and managing director Jared Grey unveiled a major restructuring of its governance model, merging its decentralized autonomous organization (DAO) with a new "Labs" structure. The proposal also introduces a multi-token system to the platform.

The new model, dubbed Sushi Labs, is part of the Burū no Shinka ("Blue Evolution") update proposal introduced in late March and aims to integrate the DAO's community-driven governance with a more structured, council-based decision-making process.

The central governing body, Sushi High Kitchen, comprises six to eight members who oversee transactions and play a crucial role in SushiSwap's development by ensuring streamlined decision-making and efficient management of the platform's operations.

The Treasury Council is responsible for managing SushiSwap's treasury, allocating funds to various initiatives, and ensuring financial stability. The Grants Council focuses on distributing grants to developers and projects that contribute to the Sushi ecosystem, fostering innovation and growth. The Ambassador Council is dedicated to outreach and community engagement, promoting SushiSwap and expanding its user base.

"As Sushi progresses, the DAO structure evolves, too. Encompassed with the recent Burū no Shinka proposal implementation, we move the DAO into a more resilient and global model that provides the necessary protections for contributors and stakeholders we've sought for years." Jared Grey, SushiSwap Managing Director

The Burū no Shinka update also sets the stage for a potential multi-token system within SushiSwap. While the SUSHI token remains the primary governance token, Grey said in a community memo that Sushi Labs plans to explore introducing additional tokens to enhance the ecosystem.

These new tokens could be designed to reward specific actions or provide access to exclusive features, thereby diversifying the utility within the SushiSwap platform. This multi-token strategy aims to mitigate inflation, support ongoing development, and establish SushiSwap as a leader in DeFi innovation.

In addition to the governance and structural changes, Grey said Sushi Labs is committed to enhancing the overall user experience on SushiSwap. This includes optimizing the platform's performance, introducing new products, and improving security measures. Grey noted that Sushi Labs will help reduce the impact of DAO attacks, such as the one from April 2023. Labs is also exploring strategic partnerships and collaborations with projects like ApeChain and Layer N to expand its ecosystem and integrate with other leading DeFi projects.

Sushi Labs will operate with the DAO's 25 million SUSHI tokens budget. Its roadmap includes initiatives such as expanding the range of supported assets, integrating advanced trading features, and launching educational programs to promote DeFi literacy among users – efforts designed to make SushiSwap more accessible and user-friendly.

2/ 🗺️ Roadmap:

Sushi Labs will lead new product development, execute ecosystem strategy, and enhance our offerings. Key projects include:

🔄 RP v5
🪙 Multi-token product suite
⚔️ SUSA (ETH-based Perps DEX)
☁ WARA (Solana DEX)
🦍 SARU (Apechain DEX)
🍣 Sushi Network/Appchain
— Sushi Labs (@sushi_labs) June 11, 2024

While intended to streamline operations and development, the community criticized the Burū no Shinka proposal last April due to concerns about the centralized aspect of the Labs model. Community members warned of a potential takeover by the Sushi team after funds from the governance multisig wallet were used in the snapshot vote. Sushi claimed it was simply trying to prevent a hostile takeover from a whale community member.

The DEX told Cointelegraph that community involvement remains crucial for Sushi Labs’ success. The SushiSwap community will be able to contribute to the project's growth by proposing new features, participating in discussions, and holding Sushi Labs accountable through continued engagement. Sushi insists that Sushi Labs plans to implement mechanisms to facilitate community proposals and feedback, incentivizing its involvement in the decision-making process.

"Sushi began as an experiment in community ownership and remains committed to this principle. While some may be concerned that establishing Sushi Labs could compromise this ethos, a dedicated development firm, unencumbered by political coercion, will provide continuity in core product strategy and offer the best opportunity for long-term success."