How is SUSHI safeguarding its treasury

Key points:

• Sushi's treasury is currently in deficit.
• Treasury only covers about 18 months of runway, according to the developer.
• A governance proposal was made to increase the Treasury allocation to 100%, it is expected that 100% of the fees will be transferred to Treasury Multisig for a period of one year. 
• The community points out that holders will be deprived of their due fees. Others worry that Sushi could close its doors if the proposal doesn't pass.
• Lead developer Jared Gray reiterated that Sushi has additional survival resources and the suggestion is only a solution to the underlying problem.

When centralized exchanges fail, fear begins to fuel markets. It also looks like the DeFi sector of the market is underperforming. Now, a well-known decentralized platform has been observed trying to avoid possible accidents.

According to a recent governance proposal, Sushi's treasury is currently in deficit. This is reported to be significant and may affect its long-term viability. The issue required immediate support, so a new proposal was made to increase the Treasury allocation to 100%.

Lead developer Jared Gray intends to build Kanpai, a protocol for survey fee redirection. Therefore, it is expected that 100% of the fees will be transferred to Treasury Multisig for a period of one year. The possibility of this change was also highlighted when the new token distribution and reward system was introduced. Existing proposals are temporary as it will take some time to implement new token economics.

Notably, runway demand for SUSHI dropped from $9 million to $5 million a year after reviewing costs. However, Treasury still only covers about 18 months of runway, according to the developer.

Drafting the latest move by DeFi platform Sushi, Gray further stated:

“Bear market environments present multiple challenges for projects and teams, and recently, we’ve seen many notable projects lay off substantial personnel or go bankrupt. It makes little sense for Sushi to follow a similar path when it has an opportunity to capture its singular significant source of revenue and direct it back to the treasury for the benefit of all.”

Will Sushi's latest proposal cause its users to leave?

Some in the market were less than happy with the decision. The community points out that holders will be deprived of their due fees. Others worry that Sushi could close its doors if the proposal doesn't pass.

When parishioners were terrified, Gray calmed the congregation. He reiterated that Sushi has additional survival resources and the suggestion is only a solution to the underlying problem.

SUSHI TVL. Source - DeFi Lama

As the chart above shows, Sushi has a total value locked [TVL] of $423.15 million. This chart shows how money has fallen on the network since the beginning of the year.