The decentralized exchange platform confirmed the decision to terminate the lending protocol Kashi alongside the token launch platform Miso.
The decentralized finance (DeFi) platform is established upon the Ethereum network. Unlike the centralized exchange, SushiSwap facilitates swapping, lending and borrowing cryptos where users can utilize their wallets of choice.
Shutdown Caused by Design Flaws and Inadequate Resources
SushiSwap Group head of technology, Matthew Lilley, admitted that Kashi suffered several design flaws, inadequate resources and accumulated operating losses. He ruled out speculations that Miso’s discontinuation arose from insufficient resources.
Lilley reassured that SushiSwap would introduce staking and launchpad platforms to replace the current services once it assembles the requisite resources.
Besides the long-term focus, Lilley disclosed that SushiSwap would prioritize optimizing the exchange operations. Founded in 2020, the DeFi protocol considers exchange operations as the company’s breadwinner. Lilley considers such awareness as informing the move to scrape off loss-making operations that are straining the existing resources.
SushiSwap Confronting Financial Uncertainty
Explaining the decision to terminate Kashi and Miso, Lilley confessed that it coincides with the period when financial uncertainty engulfed SushiSwap. The update conveyed by the firm in December revealed 1.5 years in operating expenditure. Chief executive Jared Grey restated the need for an immediate remedy to assemble resources that guarantee uninterrupted operation.
Grey’s update in December highlighted the pursuit of a strategy to renegotiate infrastructure contracts and shed off the underperforming dependencies. The chief executive added that the DeFi protocol would similarly enforce a budget freeze imposed on expenses considered non-critical personnel and noncore infrastructure to lower the annual spending to $5 million.
Later in December, Grey tweeted that the SwashiSwap Group incurred a $30 million loss in the past 12 months. In his address, Grey attributed the loss to the considerable outlay witnessed within the emissions-based rewards initiative. He admitted to formulating a strategy that aligns the program’s total value locked with the liquidity providers.
Grey’s update on December 30 revealed a proposal to redesign the tokenomics to accommodate time-lock tiers, burning mechanisms and liquidity locks to strengthen SushiSwap’s continual operations. The new tokenomics model will reinforce the treasury reserves, whose inadequacy significantly impairs SushiSwap operations.
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