DeFi Protocol Sushi to Shutter Lending Product to Focus on DEX
The decentralized exchange holds over $390 million in locked tokens as of Tuesday.
Popular decentralized-finance (DeFi) application Sushi will sunset two products as part of its broader plans toward making the protocol sustainable and profitable.
Chief Technology Officer Matthew Lilley said in a tweet thread last week that two products – the Kashi lending platform and MISO, a launchpad for external tokens – would be shuttered because of low public interest and the significant effort that went into maintaining the two.
“We made the decision to deprecate Kashi (Sushi Lending) and Miso (Sushi Launch Pad),” Lilley said, adding that yet-unnamed “successors” to these products could be released in the future once Sushi has the requisite resources to support their functioning.
Lilley said Sushi developers would focus more on the protocol’s decentralized-exchange (DEX) product. “In Q3/Q4 it became obvious that there was a strong need to prioritize, and we decided to focus on ideas to improve our most-loved and profitable product, the DEX, SushiSwap,” he said.
SushiSwap, the DEX, had over $390 million in locked token value as of Tuesday, according to DefiLlama data. Some $280 million of that is locked on Ethereum-based assets.
In contrast, Kashi has a little over $800,000 in locked assets, the data shows, suggesting poor demand for the lending product. It held nearly $40 million during its 2021 peak, but has seen gradual outflows ever since.
Last year proved to be a difficult one for crypto lenders, with centralized companies like Celsius Network and Voyager Digital filing for bankruptcy after yields on DeFi platforms dried up.
Since December, Sushi developers have been proposing and making changes to the protocol to ensure its long-term viability.
As CoinDesk reported, the Sushi treasury provided for only 18 months of runway calculated from the first week of December, causing a significant deficit in its treasury. Lead developer Jared Gray proposed setting Kanpai, a fee-diversion protocol, to 100% of fees diverted to the treasury multisig for one year at the time, or until new token distribution and reward schemes were implemented.
On Dec. 30, Gray proposed a token buyback, fee burns and rewards plan to the Sushi community. That proposal is being actively discussed online.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.