The price of SUSHI, the native token of SushiSwap, a decentralized exchange, is down 45% from February 2023, when prices peaked at $1.63, the highest level in six months.
SushiSwap Token Redesign
This contraction is despite the successful implementation of a proposal to redesign SUSHI’s tokenomics, making SUSHI, a governance token, more deflationary.
The proposal was first made in December 2022 by Chief Chef Jeremy Grey and was voted on and agreed on by the community early this year.
The proposal passed with a majority vote and will seek to reduce the SUSHI supply over the years. At the same time, it will increase the rewards for liquidity providers while encouraging users to stake SUSHI for longer.
Grey argued that this implementation would promote decentralization while making the protocol have “more equitable governance with sustainable economics.” Eventually, by redesigning SUSHI’s tokenomics, the goal will be to keep annual inflation between 1% to 3%.
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