Sushi Opens Thursday Up 3% After CTO Resignation

The DAO token of the Sushi decentralized exchange spiked 20% after CTO tweets resignation, then declined as US trading day began


Blockworks exclusive art by Axel Rangel


key takeaways

  • The market doesn’t seem to think Joseph Delong’s resignation will have a material impact on SushiSwap’s fortunes
  • Open interest remains consistent, suggesting that traders are comfortable with Sushi’s current price

Hope of a price recovery among Sushi governance token holders after the protocol’s CTO, Joseph Delong, resigned was shattered early Thursday as SUSHI had gained 20% on word of his resignation but subsequently dropped back down to Earth. 

The token is up about 3% in the last 24 hours, according to CoinGecko, and started the US trading day at around $6. Initially, when Delong tweeted his resignation, the token spiked to $6.90 — up approximately 20%.

Delong sent a message embedded in an Ethereum transaction using his private key which must be read as UTF-8 data to decode

SushiSwap’s token is down about 50% in the past month.

Open interest data is flat, consolidating around the $2.19 million mark, showing that investors are satisfied at the token’s current pricing.  

At the core of the token’s decline is the market’s lack of confidence in the DEX’s future, amidst infighting between Delong and a clique of executives and the rest of the DAO community. 

“Sushi is currently demonstrating the perils of DAO governance for all to see, with token holders now turning on the core team in a vicious public battle,” Will Harborne, CEO of DEX DeversiFi told Blockworks via Telegram.

“With Delong having been leading the development of Sushi’s next generation AMM Trident, hoped by many to be the key to challenging Uniswap V3, this will leave the community governed project even more leaderless,” he said.

While there have been proposals to reform the DEX’s governance by investors like Arca, which would make it more in line with a hierarchical corporation, no action has yet been taken to seriously consider its implementation. 

“DAOs aren’t a silver bullet solution and need leadership and good governance just like any other organization. When there is misalignment between leadership and community, the entire DAO will suffer,” Luuk Weber, strategic lead at PrimeDAO told Blockworks in an interview.

“Single token governance, as used in Sushi, allows for wide governance participation, but may also cause tension between token holders and leaders,” said Weber.

In the case of Sushi, 64% of all governance tokens are held by whales, according to IntoTheBlock, while 27% of all governance tokens are held by one sole investor.

“This causes misalignment between leadership and the community which ultimately ends with both sides losing faith in each other; driving down the value of the governance token as it loses its power to coordinate contributors,” added Weber.  

Sushi is down from an all-time high of $23, which it hit in mid-March.

“We’ve seen Sushi recover from worse crises in the past and so much hope remains, but it will require the DAO to find strong new leadership and ideas from within the community fast to avoid a death spiral,” concluded Harborne.

Get the day’s top crypto news and insights delivered to your inbox every evening. Subscribe to Blockworks’ free newsletter now.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Frax report cover.jpg


Frax saw continued development in its frxETH liquid staking derivative and Fraxlend money market throughout 2023. Frax V3 introduces an RWA strategy to drive utility to the protocol's cornerstone product, the FRAX stablecoin.


In a bid to woo institutional crypto traders, Binance wants help from a bank


Musk’s hesitation to launch his own crypto made sense in previous cycles. But there’s no shame left around here — he should just go for it


Commissioner Peirce would have done things differently if she could when it comes to her agency’s crypto enforcement actions


MicroStrategy discloses the purchase of 16,000 bitcoin throughout November


Digital asset firms face potential new regulatory landscape under Treasury’s proposed authority expansion


Uniswap Labs will be providing trading APIs to Talos investors through Fireblocks