SushiSwap proposes shift to ‘Labs model’ in DAO shake up amid social drama

SushiSwap’s head chef, Jared Grey, said the ongoing controversy surrounding the protocol’s proposed transition to a Labs model is primarily driven by “former contributors who like to propagate endless FUD and misinformation.”

The controversial proposal

On March 26, a proposal titled Evolving Sushi—Burū no Shinka was submitted to allow Sushi to adopt a Labs model to restructure its current organization, enhance operational efficiency, and accelerate protocol development.

The proposal pointed out that the protocol’s current governance procedures needed more flexibility to increase its development pace. Consequently, it proposed Sushi Labs as an autonomous administrative, technical, and operational company, or group of companies, tasked with product development and management within the Sushi ecosystem.

However, the proposal has generated heated remarks from some in the community due to several proposed changes, including making the Sushi Labs more powerful and limiting the DAO’s powers to decentralized on-chain governance, such as voting on token allocations.

Additionally, the proposal will allocate 25 million Sushi tokens and other funds to the Labs while making it the sole beneficiary of future airdrops.

This move has been heavily scrutinized, mainly because the amount in the treasury differs from what the proposal states. The treasury wallet appears to contain 168 ETH, 13 million SUSHI, and 88,900 USDC. However, the proposal mentioned 1,228 ETH, 33.55 WBTC, and 1.574 million DAI, which are not in the treasury address.

Interestingly, Naïm Boubziz, a former contributor to SushiSwap, alleged that the Sushi Labs team might be manipulating the voting by adding liquidity to vote for themselves and removing the liquidity. He said:

“SushiSwap’s latest move is THE real hostile take over. They’ve introduced a new snapshot, sidelining the DAO and seizing the entire treasury without consulting the community.”

These dramas have led some community members to label the proposal “End of DAO.” Grey replied, stating,

“Labeling it as the “End of DAO” seems melodramatic when many view it as a needed upgrade, reducing the friction and inefficiencies plaguing Sushi’s less organized DAO model compared to its contemporaries and the need to deploy a more decentralized structure. Still, you’re entitled to your opinion, and sharing is encouraged.”

SushiSwap team response

In his response, Grey said that successfully implementing the Burū No Shinka will lead to a new era of streamlined governance for the Sushi DAO.

According to him, the DAO will no longer require a head chef figurehead, and his role will transition to leading Sushi Labs’ product development. He added:

“Sushi Labs’ goal is to foster the advent of a multi-product-and-token ecosystem, unlocking new opportunities for utility, governance, and value creation, which will remain under the control of the governance council structure, with increased on-chain and decentralized controls. We view this as a win-win for Sushi DAO.”

Grey also debunked claims that the team was manipulating the votes, revealing that a whale purchased a substantial amount of the SUSHI token to disrupt every effort of progress by the Sushi team.

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