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Sushiswap introduces new tokens to address liquidity crunch

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The Sushiswap team aims to introduce a new token designed to address decentralized exchange (DEX) liquidity issues caused by adverse market conditions.

Sushiswap is redesigning the SUSHI token economy

To address the serious liquidity crisis faced by Sushiswap DEX, the team is introducing a new token model designed to promote decentralized ownership and reward liquidity growth via an inclusive and sustainable ecosystem.

Notably, Sushiswap’s chef Jared Gray explained earlier this month that the current bear market has made the current project token economy and reward system unsustainable. He added that the protocol may soon become inoperable if the issue is not permanently resolved.

As mentioned in the project’s new token proposal, the team plans to nip the liquidity crisis in the bud through four key measures, including incentivizing liquidity providers (LPs) with scalable volume and undiluted token rewards, supporting improvements to the exchange’s product suite to enhance LP opportunities, And put in place an improved rewards mechanism to increase its market share, and renew its management with a fairer model.

The team said:

“The newly proposed sushi token model properly incentivizes behavior that benefits the entire ecosystem and all stakeholders by encouraging the provision of long-term liquidity, directing fees to profitable activities, and supporting perpetual token fundamentals.”

The developers firmly believe that the new model, if implemented successfully, will enable Sushiswap to remain solvent in all market conditions, as it completely removes the pressure from the sushi cabinet.

At the time of publication, Sushiswap is the world’s 20th largest decentralized finance (DeFi) protocol, with a total value locked of $454.12 million (TVL), according to DefiLlama. On the other hand, the price of SUSHI is hovering around $0.938, with a market cap of $208.4 million, according to CoinMarketCap.

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