According to a new tweet by SushiSwap CEO Jared Grey, the decentralized exchange (DEX) experienced a $30 million loss over the past 12 months on incentives for liquidity providers (LPs). As explained by Grey, SushiSwap currently employs a token-based emission strategy to incentivize LPs, but the current rate is “unsustainable.”

“We commissioned Flipside to build dashboards to showcase these results; we’ll make them available by EOY.”

Moving forward, Grey plans to rework SushiSwap’s tokenomics so that LPs are no longer subsidized with emissions and redesign the entire model of bootstrapping liquidity on the exchange. “In Q1 2023, we will bring innovation to scale swap volume & prioritize TVL. As LPs experience a more profitable swap experience, others should migrate to Sushi,” wrote the DEX executive.

Grey also turned his attention to promoting the “Kanpai” governance proposal, which will divert trading protocol fees earned as rewards from SUSHI (SUSHI) stakers into the SushiSwap treasury. Previously, Grey disclosed that the SushiSwap treasury had only 1.5 years of runway left. 

“Put simply, it [Kanpai] allows the protocol to rebuild its cash reserves to continue to pay competitive wages, pay for critical infrastructure, & to diversify its Treasury with funds collected in the base pairs of assets, like ETH, stablecoins, etc. Kanpai is a temporary solution.”

Curiously, Grey has remained opaque concerning the design of the new SushiSwap for now, stating that he will provide “full financial transparency by releasing public dashboards for DAO & Treasury activity” in Q1 2023. When pressed by a community member on the matter, Grey responded:

“I’ve discussed it at length in the Sushi Discord, on community calls, AMAs, and more. The official whitepaper comes out by EOY. No one is saying, “trust me, bro” I’m saying full details come out at that time.”