SushiSwap reveals its roadmap for the Year of the Rabbit. Can Sushi break through under the pressure of giants?

Author: Moon's Dark Side, PANews

On the eve of the Lunar New Year, January 17, Sushiswap's new CEO Jared Grey officially announced the 2023 roadmap in the form of an article, highlighting the main focus for Q1, which will concentrate on the DEX business itself and empowering SUSHI's value to enhance its competitiveness against Curve and Uniswap.

He stated that a DEX aggregator will be launched at an appropriate time, which is the most significant move following the launch of the multi-chain DEX SushiXswap in 2022, aligning more closely with the development philosophy of 1inch.

Additionally, the plan is to explore more application scenarios for Sushi, reshape its token economics to promote greater decentralized governance capabilities for Sushi DAO, and considering Sushi's historical performance of launching tokens ahead of Uniswap, token incentive measures have always been its forte.

On January 24, SushiSwap kicked off the 2023 counterattack with a governance proposal to transfer all transaction fees to the DAO treasury. This article will briefly introduce the roadmap details in conjunction with previous news.

• Expand Sushiswap's market share in the DEX market, focusing on improvements in user experience;
• Launch a new DEX aggregator, with Jared Grey envisioning a "10-fold increase in market share";
• Decentralized governance structure to enhance the self-organization capabilities of Sushi DAO;
• Introduce a brand new token economics model: focusing on improving liquidity, enhancing sustainability, and returning community ownership;
• Launch Sushi's decentralized incubator: Sushi Studios.

Responding to DEX Competition: Liquidity is King

This roadmap from Sushi clearly returns to the original intention of DEX, which is a response to the dual competition from Curve and Uniswap.

Currently, Curve's TVL has surpassed Uniswap, challenging Uniswap's market position in the DEX space for the second time, the first being the surge in trading volume brought about by Sushi's early token launch.

The biggest improvement in Sushi's 2023 roadmap is to enhance its centralized trading and market-making efficiency in the AMM DEX space to reclaim market share in the DEX market.

This roadmap will allow LPs (liquidity providers) to set specific price ranges to provide liquidity, introduce more LP-friendly incentive measures, and Sushi will promote deep integration with project parties to provide more opportunities to access Sushi DEX, aiding Sushi's expansion in IDOs.

According to Sushi's own statements, it currently holds a 2% share in the AMM DEX market, but 0% in the DEX aggregator market. Sushi plans to increase its market share tenfold in 2023, aiming for 10%.

According to Nansen data, the current main trading pools in the DEX market are dominated by Uniswap and Curve, and Sushi needs to create more incentive measures to attract project parties and LPs.

It can be observed that the above measures are aimed at competing with Uniswap and Curve. Uniswap is currently focused on opening the "market fee switch" to enhance LPs' ability to capture trading fees, while providing the strongest trading pools is Curve's moat.

Overall, Sushi's chosen direction remains focused on the spot DEX field, which is consistent with its decision to stop maintaining the lending platform Kashi and the token Launchpad MISO projects. However, its frequent abandonment of existing products to repeatedly "reinvent the wheel" for new projects also warrants market attention regarding its long-term operational capabilities.

Empowering Sushi: Reclaiming Foundational Advantages

Beyond competing for market share, another highlight of Sushi's roadmap is the implementation of a new token economics model, which will focus on expanding the use cases of Sushi within its ecosystem, moving away from a single governance token role, and using this as a breakthrough to enhance Sushi's ecosystem incubation capabilities.

The aim of this empowered token is to increase the willingness of LPs and project parties to participate, prioritizing more tokenized scenarios on Sushi, which is also the main direction for its market expansion, reflected in the details of the new economic model.

The revamped token economics is divided into five parts: LPs, xSushi, Burns, locked liquidity, and token release, with the main focus on providing more incentives to LPs to encourage their active participation in forming trading pools. However, it remains to be seen whether this can ultimately be achieved, requiring efforts from the team.

However, it should be noted that this proposal is still in progress, and according to Sushi's 2023 budget, 82% of its $5.2 million budget, approximately $4.3 million, will be allocated to the salaries of key members, leaving only about $920,000 for DAO governance.

Against the backdrop of insufficient financial capacity, Sushi DAO proposed on January 24 to transfer all transaction fees to the DAO treasury. The benefit of this approach is that it will enhance the DAO's ability to capture funds, but it will also simultaneously open a Pandora's box for self-profit.

To enhance the DAO's self-sustaining capabilities, Sushi's roadmap aims to create more transaction fees and market share from project parties listing tokens. Sushi Studios, as Sushi's decentralized incubator, will launch independently funded projects to support ecosystem growth and alleviate the financial burden on the DAO.

At the same time, to promote transparency in governance capabilities, Sushi will launch a Governance Dashboard in Q1 to display the audit results of Sushi DAO's budget, project wallets, and treasury expenditures, moving beyond the current simple community discussions and voting governance measures to focus on financial transparency.

In 2022, SushiSwap spent $30 million on its emission-based reward strategy to guide liquidity and incentivize LP participation. In the 2023 roadmap, more sustainable governance measures will be introduced to retain LPs, rather than stopping at simple compensation measures.

Conclusion

Sushiswap's 2023 roadmap indicates its choice to enhance the parallel initiatives of LPs and $Sushi. According to Cryptorank data, Uniswap across all chains and versions occupies a total of 4% of the spot market share, while Sushi only holds 0.06%, indicating that the two are not in the same weight class.

With Sushi entering the fray, the DEX and the entire DeFi sector may see a revival in 2023, but it remains to be seen whether the market will pay more attention. Currently, the best way to test whether Sushi can indeed launch the DEX aggregator as promised in Q1 is underway, and 2023 is destined to be a challenging year for Sushi.