July 8, SushiSwap co-founder 0xMaki published in the official proposal Governance Forum, as part of a treasury diversification plan, the proposed mechanism for part of about 51 million SUSHI will SushiSwap treasury currently holds investments were sold scale up to 6000 Ten thousand dollars, the sale price is 20-30% of the time-weighted average price 30 days before the end of the proposal, and the attribution clause is a 6-month lock-up period and an 18-month linear release period.
Token sale price setting
At present, most of the assets held by SushiSwap Treasury are SUSHI, valued at more than US$300 million. This proposal aims to diversify the treasury assets and strengthen the strategic partnership with crypto venture capital institutions .
The proposal also revealed that currently confirmed strategic investment institutions include Lightspeed Venture Partners (hereinafter referred to as Lightspeed Venture Capital), Spartan, Dragonfly Capital, Polychain, Blockchain.com, Pantera Capital, 3AC, DeFiance, Parafi, Hashed, Multicoin Capital, Coinfund, 21 institutions including CMS Holding.
However, due to the recent poor performance of SUSHI tokens and the improper details of the sale plan, the proposal has caused huge doubts in the SushiSwap community and continued to ferment. Almost 80% of the replies are opposed to the proposal. In response, Lightspeed Venture Capital, Pantera Capital, DeFiance Capital and many other crypto venture capital institutions explained the doubts under the proposal post.FTXFounder SBF, partner of Arca Capital,UMAMany indirect participants such as protocol developers also participated in the discussion on this topic.
At present, the number of replies to this proposal in the SushiSwap Governance Forum has reached 201, making it the most discussed proposal in the history of the project. Specific to the disputes caused by this proposal, it can be summarized into 5 points.
One of the doubts is that the SushiSwap vault has sufficient funds and annual operating expenses are less than $1 million, so there is no need for such a large-scale token sale. A user named “ GreenEyes “ pointed out that “ Sushi should not raise funds now and start a fund diversification plan. At present, its income is temporarily sufficient to cover all operating expenses. With DeFi regaining the strong traction of public market valuations, SUSHI fundamentals continue Increase, and the new agreement is upgraded and runs smoothly. We can sell tokens on a small scale many times during the rise, or even just start to diversify our investment and use the treasury internally. ”
Regarding this topic, 0xMaki stated that the main purpose of this token sale is to establish more strategic partnerships, indicating that these partners can serve as advocates for their investment portfolios to promote projects that have not yet issued tokens to be launched on Miso and basically Integration with the Sushi ecosystem.
The second point of doubt is that the discounted price of 20-30% is too high, which has further harmed the interests of SUSHI holders in the context of the recent sharp drop in SUSHI prices. Jeff Dorman, a partner at Arca Capital, said that SUSHI’s current transaction price is lower than its fair value and it is definitely not the time to sell.
“ Given the vibrant community, project fundamentals, and a large number of “ strategic “ investors who are interested in financing , the market for SUSHI tokens is clearly strong. If rightSushiswapThe future of the company is so promising, then investors should buy SUSHI, give up the discount, and add the claimed “ strategic value “ . “ Jeff Dorman said.
In this regard, Franklin Bi, director of portfolio development at Pantera Capital, said that if the Sushi team sells all SUSHI that it plans to sell on DEX at market prices , there will be a slippage of about 30%, and this transaction makes the team 20-30 % Discount immediately obtains 60 million US dollars of liquidity, and there is a 2-year restriction period, so the discount price is still fair.
However, many members of the SushiSwap community did not approve of this response, because Franklin Bi actually gave an example of SUSHI/ETHTrading pairs only account for a small part of SUSHI’s overall liquidity, so they are not representative and convincing.
The third question is that the linear unlocking period of the past two years is still too short. If these institutions are optimistic about Sushi’s long-term potential, they should set a longer unlocking time . According to a poll initiated by 0xMaki, 60% of community users believe that a four-year unlock time should be set.
Source: SushiSwap Governance Forum
In addition, many community members proposed toOptionTokens are sold in the form of, that is, only when the price of SUSHI reaches a certain price, the venture capital institution can unlock its tokens. SBF also tweeted that he believes that selling at market price + increasing the strike price of a 1:1 option with a price of $12 and a maturity of 5 years is the right move .
Synthetic asset agreement UMA also proposed a new token financing solution, Success Token, which combines the project’s own token with the call option of the project’s token, which means that the project party is asking investors Offer call options instead of offering discounts to sell tokens. The part of the call option is only valuable after the price of the project’s token is increased. This sets a more reasonable incentive mechanism: investors can only get their “bonus” when the project performs well.
The fourth question is that there are too many venture capital institutions participating in this transaction, which in fact cannot bring enough strategic value, or the strategic value and value-added services they provide are similar . A user named “ klemperer-the-goat “ pointed out, “ If the purpose of the sale is for strategic partners rather than raising funds, it would be absurd to add 21 funds. Many of these funds also know each other and are all focus on encryption currency of well-known fund, they each bring added value it really different from each other? “
Most community members have this question and say that 3-5 major venture capital institutions can participate. Institutions willing to participate in the transaction should publicly express the strategic value and specific contribution that the institution can bring to Sushi before making a choice. “ I will ask every investor to commit to writing at least one public post/tweet, etc., in each quarter for the next 4 years: a) update Sushi for the general audience; b) what they are doing/help A list of things to do. ” SBF tweeted.
Below the proposal post, many venture capital institutions also elaborated in response to public opinion. For example, Amy Wu, partner of the well-known venture capital institution Lightspeed Ventures, replied that from the perspective of product, vision and execution, Sushi is the top team in the DeFi industry One of them, so I hope to establish a long-term relationship with the Sushi team and the community, and the institution can introduce various financial technology products and new banks to the Sushi team and the community , expand Sushi’s network outside the crypto industry, and at the same time in recruitment, public relations, and marketing. , BD and other aspects to help Sushi.
Franklin Bi, Pantera Capital’s portfolio development director, introduced the institution’s history and philosophy in a reply, and said that the institution can be used in recruitment, portfolio/industry connectivity, technology/market research, marketing, resources/suppliers, etc. Help Sushi.
The Future Fund replied that the institution was one of the early investors of SushiSwap and had purchased the sushi.com domain name and gifted it to the project.
The fifth question is that some of the venture capital institutions listed in the proposal are even hurting the Sush community . According to Etherscan data, some community members pointed out that while 3AC and DeFiance are planning to participate in the transaction, they have been trading on DEX andBinanceSold nearly a million SUSHI, not qualified to become a strategic supporter of Sushi. “ This looks more like arbitrage trading, rather than a strategic long-term investment. “ Jeff Dorman said.
Wangarian, a partner of DeFiance Capital, responded that DeFiance is an early supporter of Sushi and one of the largest holders of SUSHI, but as a crypto investment fund holding a liquid position, “ Our work requires us not only to buy tokens.” , And occasionally sell them. We don’t think it’s necessary to explain to the public every action we take. ”
Wangarian also stated that DeFiance will not participate in the financing to eliminate any concerns about conflicts of interest. “ We want to recognize Sushi community to stabilize currency benefits of large-denominated treasury, which will provide meaningful financial firepower SushiSwap team in the coming years. 」
In addition to the aforementioned doubts , due to the approval of the DeFi Education Fund a few days agoUniswapThe event that the community voted for 1 million UNI but quickly sold it also caused some SushiSwap users to reflect on their concerns that venture capital institutions are abusing governance for their own benefit.
“ After the UNI Education Fund, we get in such a short period of time this proposal. I would say this is not a coincidence, venture capital funds realize they can abuse treatment for their own purposes . Just open a governance mentioning the case and make it looks legitimate, but VC can use their vast holdings will SUSHI every vote cast for him are. “ names as “ Wunderbernd “ of a user replies said that ” there is no mechanism to ensure that the VC really fulfill its commitments. they can Get SUSHI at a discount, without actually being forced to do anything. This is again similar to the DeFi Education Fund, they get the money and they can do whatever they want. ”
On July 16, 0xMaki replied in a proposal post that according to the overall response of the community, the transaction size will be reduced from 60 million US dollars to 15-20 million US dollars, and a number of votes have been launched on the details of the token sale.
“It’s rare to see this level of interaction between institutions and community governance, and how these institutions interact with each other through open discussionsDAOThe key moment of interaction . ” 0xMaki also commented on the significance of this incident.
Perhaps due to the impact of community activity, today’s SUSHI token price rose by about 16% when the overall market fell, and it was quoted at $7.04 as of press time, but it was still down by about 68% from the high point during the year.
At present, the discussion on the proposal is still further fermenting, Uniswap founder Hayden Adams,CompoundFounder Robert Leshner, YFI founder Andre Cronje, Messari founder Ryan Selkis, BlockTower Capita l founder Ari Paul and many other industry celebrities all talked about this on Twitter.
Regardless of the final outcome of the proposal, SushiSwap’s token sale proposal has become one of the most fully discussed proposals in the crypto community. Community members have exerted large-scale pressure to force the project party to modify the details of the proposal, and the relevant venture capital institutions of the plan have publicly provided evidence statements. Its philosophy and strategic value to cater to the community may become one of the most classic cases in the history of DeFi governance.