It needed a crisis to smash some braincells together and figure out that current tokenomics suck.
SushiSwap CEO proposes new tokenomics to survive liquidity crunch
Paying token holders merely for staking their coins, and paying them with the same coin, is no different to central banks expanding supply and devaluing their currency.
I have said many times, crypto needs some NewDefi protocols - something smarter than the current crap.
Grey’s proposed tokenomics aims to reward liquidity growth through a “holistic and sustainable reward mechanism that scales with volume and fees.” In addition to increasing liquidity, the new tokenomics model seeks to create more utilities for SUSHI and “promote maximum value for all stakeholders.”
Sounds like adding mayo to wasabi. What does it mean?
The current Sushi Tokenomics Proposal can be downloaded from Goeggel Drive.
I was hoping for some mathematics, but instead get a forest of spreadsheet tables. I'm not sure they yet fully understand that liquidity pools are the source of their woes. The Uniswap protocol is garbage, with different levels of pollution.
Introduce an optimized rewards mechanism to grow AMM/agg market share.
That looks like they're looking in the right direction, but doesn't sound like their lenses are in focus.
Sushi's fundamental flaw is that they are paying out tokens to validator stakeholders while their liquidity pools languish. I'm not into Sushi (the platform), so I take this from their paper. But paying stakeholders is not activity IMO - they could be paying corpses to breathe. Validators jostle for relative dominance but, if you just decrease all stakes by half, what changes? Nothing. But if nothing changes, then that lost half wasn't doing anything in the first place!
I'd have to look deeper to see if the validator distributions have some component based on absolute stakes. Even if they did, like staking ATOM on Cosmos, the same issue arises when one reaches the upper limit. The platforms still need to make their LPs not suck, and the way to do that is to abandon the naive first-iteration binary constant-product pools. Phew, that's a mouthful! To most people, that means Uniswap-style pools. There are better protocols out there - use those.
Looks like Sushi is still thinking in terms of "optimized rewards mechanism". That isn't the real issue; the issue is that Uniswap protocol does the opposite of what a sentient being would do - it increases LPer exposure to whatever is the shitcoin in the pool. Doesn't matter if the APR is high when the value of the LP-token is tanking. And when a user starts to see that happening - with or without any mathematical understanding of why - then the optimal reward is to bail out and leave that pool. That's the problem!
Maybe... looks like so many others, trying to juggle pieces on the board without seeing that there is a larger board.