The End of the Sushi Saga - The Daily Gwei #73
Until next time on crazy stories in Ethereum...
What a crazy weekend in Ethereum (again)! So the infamous Chef Nomi put together a tweet thread on Saturday basically apologising to the community and announcing that he had returned the $14 million worth of ETH that he had taken from the treasury. Since then, he’s been quiet and claimed in his tweet thread that he’d be still participating in SushiSwap but in the background.
This was a pretty incredible end to one of the most crazy and controversial events in Ethereum’s history. We saw SushiSwap come out of no where and suck in $1.3 billion of liquidity, heavily divide the community, Chef Nomi exit scamming and then returning the funds, $800 million of liquidity migrating from Uniswap to SushiSwap and now there’s an active community debate about how much to compensate another core contributor, 0xMaki, for his work on SushiSwap. All of this happened in about ~2 weeks, by the way.
I wanted to focus on this specific proposal and the arguments for and against it. Just to be clear, there has been 2 proposals so far - the first one stipulated that 0xMaki should be compensated with 500k SUSHI ($1.1 million) up front with a further 500k SUSHI locked over a 1 year period as a founders grant. Furthermore, it also stipulated that he should be paid an additional 500k SUSHI that is vested over 2 years for continued work. Obviously this proposal didn’t go over too well with the community since $1.1 million (worth more at the time) is a lot of money to be paying someone upfront for 2 weeks worth of work. Because of this, a second proposal was put forward.
The second proposal is a lot saner in that it stipulates that 0xMaki should be paid a flat $10,000 per month for salary + expenses and then the community could vote on the amount of SUSHI to pay him over a 3 year vesting period. The community voted on 1.5 million SUSHI ($3.3 million) vested over 3 years. This is typically pretty normal for founders/team to do - 3 years vesting paid out in the token - but the difference here is that the token already has a price so it’s being measured in that price and not in the token which skews things a bit.
So, what is fair here? Is $3.3 million worth of SUSHI (at current prices) vested over 3 years fair for a founder? Some will argue that 0xMaki didn’t really do anything except sit in the Discord channel while Chef Nomi handled most of the work and others will argue that SushiSwap is just a clone of Uniswap so any amount of compensation seems insane. I think it’s unfair to say he did nothing - it’s obvious that he was a big part of SushiSwap and critical for its success moving forward.
At this point it certainly seems like the main part of the SushiSwap saga is over and now we’re pretty much in a phase where we see how much liquidity/volume SushiSwap can retain over time (as the SUSHI rewards for liquidity providers dropped dramatically over the weekend). Liquidity isn’t loyal so it will mostly chase the highest profit/yield it can get so many people are expecting liquidity to move back to Uniswap or to chase other opportunities in DeFi.
Have a great day everyone,
Anthony Sassano
All information presented above is for educational purposes only and should not be taken as investment advice.