Sushi announces a new tokenomics proposal to incentivize liquidity and promote decentralization

ChainCatce news, SushiSwap's new CEO Jared Grey announced a new tokenomics proposal aimed at increasing liquidity, creating more utility for its native token, and maximizing value for stakeholders. The formal proposal states, "Just like the initially hoped-for xSushi model, the main goal of the new economics is to promote decentralized ownership and reward liquidity growth through a holistic and sustainable reward mechanism that scales with quantity and fees. Our aim is to incentivize long-term participation in the Sushi ecosystem while reducing the number of extractive participants."

The proposal outlines four key changes to the protocol's tokenomics. The most significant change is that staking Sushi (xSushi) will no longer earn rewards from trading fee revenues but will instead receive emission-based rewards paid in Sushi. Liquidity providers in the trading pools with the highest trading volume will receive the majority of the swap fees. Additionally, participants can opt for a new time-lock mechanism to enhance rewards.

Floating trading fees will also be used to repurchase and burn Sushi from the open market and to lock liquidity, providing more price support. The final change will adjust Sushi's emissions to 1-3% APY to reduce inflation and achieve a balance between overall emissions and repurchases, burns, and locked liquidity, which is used for price support of trading fees. (TheBlock)