SushiSwap Discontinues Lending Protocol ‘Kashi’ and Token Launchpad ‘MISO’

SushiSwap Discontinues Lending Protocol ‘Kashi’ and Token Launchpad ‘MISO’

The decentralised exchange has decided to deprecate its lending protocol and token launchpad. SushiSwap is also restructuring its entire tokenomics model as it was facing heavy losses over the past year, and only has 1.5 years of operational capital available.

Ethereum-based decentralised crypto exchange (DEX) SushiSwap has shut down its DeFI lending protocol Kashi, and token launchpad MISO. The decision was announced on Twitter by SushiSwap’s chief technology officer Mathew Lilley, and comes as part of a larger plan to restructure the platform. 

When it came to Kashi, Lilley pointed out several reasons for its discontinuance, mainly design flaws, running at a loss to the company and lack of resources that were available to be dedicated to the protocol. Meanwhile, MISO was shut down due to lack of resources. 

SushiSwap, which was founded in 2020, allows users to buy, sell, lend, borrow and swap cryptocurrencies using their own self-custody wallets such as MetaMask or Trust Wallet. Unlike centralised exchanges like Binance or Coinbase, that hold custody of customers’ assets, users hold their own assets on SushiSwap. 

Lilley said that the exchange plans to launch successors to Kashi and MISO in the future once it will have the necessary resources to dedicate a product team towards them. Until then, the company will be completely focused on the DEX, which has $390 million in total value locked (TVL). The company also prioritises bringing concentrated liquidity to the automated market maker (AMM) sector. 

Kashi was launched by SushiSwap in March 2021 as a way for customers to borrow crypto funds within a DeFi ecosystem. MISO or Minimal Initial SushiSwap Offering, is a protocol for linking DeFi platforms with crowdfunding initiatives that was released by the company around the same time. However, neither of the services garnered users over its lifetime and was causing heavy losses to the firm, thus deemed unsuccessful. 

On December 30, SushiSwap CEO Jared Gray submitted a proposal to the Sushi Forum to revamp the platform’s tokenomics model. The proposed plan includes a new token burning mechanism for SUSHI and xSUSHI (staked SUSHI) tokens, a liquidity lock system to support token price and a time-locked staking period for emission based rewards. 

According to the new model, 0.05% of token swap fees on the exchange will be allocated to liquidity providers (LP), with a larger portion of the fees going to token pools with the highest volume of assets. LPs can lock their SUSHI tokens for a pre-assigned period to earn rewards, higher the time-lock the more emission-based rewards they can earn. SushiSwap refers to time-lock as “soft-locks”, meaning users can withdraw their liquidity before maturity, but will risk losing all rewards in the process.

The SUSHI will be forfeited and burnt to maintain a balanced token supply. In the case of xSUSHI stakers, they will not get cuts from swap fees, instead receive emission-based rewards. Formalities that come with time-locking the platform’s native token is applicable here, with rewards being burnt if assets are removed before maturity. 

SushiSwap will use portions of the swap fees to lock liquidity on the platform and as price support for SUSHI tokens. The exchange will introduce a nominal 1-3% APY for emission rewards. 

The decentralised exchange was facing heavy losses over the past year, amounting to over $30 million, which was mainly caused by its existing incentives model and the hugely unsuccessful token launchpad  (Kashi) and lending protocol (MISO). Jared also stated that implementing the new token model is a priority for the exchange which only has 1.5 years worth of operational runway available. 

At the time of writing, SUSHI is trading at $0.96 – up 1.3% in the last 24-hours, while xSUSHI is trading $1.31 – up by over 1.5% in the same period. 

Also Check: Gemini Accuses Crypto Lender Genesis For Acting In ‘Bad Faith’ Over $900 Million Owed To Customer

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