Ethereum-based DeFi platform SushiSwap has announced plans to separate its token launchpad and lending protocol from its service offering. SushiSwap Group has been facing serious financial problems for the past few months.
SushiSwap’s CTO Matthew Lilly announced a few days ago that the group would be cutting some of its services, including the Lending Protocol and Launchpad. The CTO tweeted:
In explaining the decision, the CTO noted that Sushi Lending already had several design flaws and was loss-making. Furthermore, the SushiSwap group needed financial and human resources to dedicate to the now-failed lending protocol. The reason for deprecating Launchpad is the same, ie it needs more resources.
However, based on the CTO’s Twitter thread, the network may re-build the two downed services once sufficient resources are gathered. Nevertheless, for the time being, Sushiswap will focus its existing resources on its breadwinner, the decentralized exchange network.
DEX Industry Already Focusing, According to Lilly liquidity system, Thus, for the time being, the DEX will prioritize the concentrated liquidity of the AMM to bring parity with the decentralized exchange sector. Since their V2 system is already running out of steam, the technology chief noted that plans are underway to complete the build-out of concentrated liquidity.
Sushiswap Ongoing Financial Struggles
The decision to cut down on some of its service offerings could be mainly due to the financial troubles that the exchange is currently facing. Last month, Sushiswap highlighted that they remained only with 1.5 years of operating cost, In his statement, he said that this situation requires immediate action.
SushiSwap CEO Jared Gray announced a $30 million loss made by the group over the past 12 months. The CEO said the strategies the company was already pursuing included renegotiating infrastructure contracts and reducing unnecessary dependencies.
Further statements from Gray stated that he would freeze the budget for non-critical personnel as he aimed to reduce annual spending to $5 million. Gray also highlighted the problem with Sushi’s emissions-based rewards program and plans to streamline its TVL with LP. The decision to shut down Launchpad and Lending Protocol was part of the network’s actions announced last month.
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