Controversial Sushi DAO treasury proposal passes signal vote

A controversial Sushi SUSHI -7.46% DAO governance proposal — involving the transfer of more than $40 million in DAO-controlled treasury assets to a new Labs model — has passed an initial community signal vote.

Voting concluded earlier today, with 62.5% in favor of the proposal. As a signal vote, the proposal was designed to indicate whether or not the change in structure should progress. An implementation vote is already underway, with 83% currently in favor, scheduled to conclude on April 17.

The proposal has been heavily criticized, however, with SushiSwap Compensation Committee member Naïm Boubziz alleging the core development team created fresh wallets ahead of the vote to increase the team’s voting power.

The proposal is the first time the SushiSwap team address — Sushigov.eth — has ever voted, according to Boubziz. The wallet's 5.5 million in SUSHIPOWAH votes and a further 3.1 million delegated to it make it the largest voting block, even though the community never expected the wallet to be used in governance.

In crypto, a lab generally conducts research and development to promote the protocol, while a DAO is a decentralized governance organization, and its decisions are generally not centralized.

The SushiSwap core team did not immediately respond to a request for comment from The Block.

SushiSwap treasury proposal

The SushiSwap governance proposal suggested transferring assets from the DeFi app's DAO-controlled treasury to a new one controlled by Sushi Labs while also ensuring all future airdrops are directed to the Sushi Labs vault.

“We request that Sushi DAO award a grant of 25 million Sushi tokens to Sushi Labs, including assets from the Arbitrum airdrop, business development, and partner grants, Kanpai 2.0, Sushi 2.0, rewards, stablecoins, and 'Sushi House' funds,” SushiSwap developer Jiro wrote in a post last month.

The proposal also stipulated the new Sushi Labs entity would be the sole beneficiary of future airdrops awarded to Sushi by protocols and partners.

According to Jiro, this proposal aims to evolve Sushi by adopting a labs model, “thereby restructuring the current organization to enhance operational efficiency and accelerate protocol development.”

The developer added that the move is necessary because the current SushiSwap governance procedures “require more flexibility to accelerate our development pace.” Furthermore, the proposal intends to “empower Sushi Labs with exhaustive and sole operational responsibility for core product development.”

SushiSwap “Head Chef” Jared Grey told The Block on April 5 that the proposal is part of a necessary restructuring of the governance model for both the benefit of Sushi holders and the DAO.

“The goal of our proposal is to optimize the relationship between the operations element and the DAO,” Grey said. He added that the proposal offers a path forward for shipping products faster and ensuring operational continuity and DAO autonomy.

Sushi’s token is trading down 9% over the past 24 hours, according to The Block’s price page.

SUSHI/USD price chart. Image: The Block/TradingView.