SushiSwap’s Protocol Can’t Easily Deliver Policy Changes

  • The SushiSwap community has voted on policy changes to the protocol to reduce the token reward schedule, introduce a lock-up period for newly minted Sushi, and introduce fee staking. But these changes can’t be made without first migrating to new smart contracts, a research firm told CoinDesk.
  • The current MasterChef contract doesn’t permit changes to the SushiToken contract, which in turn dictates other protocol functions for minting SUSHI tokens and for paying fee-staking rewards to SushiSwap holders.
  • Each smart contract would have to be manually migrated to make the changes, the research firm claims, though the SushiSwap team is looking for workarounds that don’t require as much heavy lifting.

The SushiSwap smart contract migration is complete but there’s a problem: Another migration may be needed if the team wants to implement changes to the protocol the SushiSwap community voted for.

Limitations in SushiSwap’s code make the proposed changes impossible without serious alterations to SushiSwap’s code, namely another migration, blockchain research firm IntoTheBlock told CoinDesk.

The SushiSwap community just voted to decrease the Sushi token reward – a so-called liquidity provider (LP) token which is rewarded to sushi users who stake tokens in SushiSwap’s liquidity pools – from 100 SUSHI per block to 50, with successive halvings every two years. In addition, this change would include a “vesting” mechanism whereby two thirds of all newly minted SUSHI are locked for one year.

These vested tokens would earn transaction fees but could not be moved or used in voting until the year-long timelock expires. The vesting proposal is particularly germane to this project after its progenitor, Chef Nomi, sold off $13 million worth SUSHI tokens for ether last weekend. Chef Nomi recently forfeited this fortune, though, announcing on Twitter that he sent the 37,400 ether he garnered from trading in his SUSHI tokens to the SushiSwap treasury.

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