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

article-image

Blockworks exclusive art by Axel Rangel

share

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.


Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template.png

Research

RTK networks are critical to enabling a world of ubiquitous autonomous drones, vehicles, and industrial robots. We believe the GEOD token enables both a cost and product advantage for the GEODNET RTK network, which will allow it to out-compete multi-billion dollar incumbents Trimble and Hexagon.

article-image

Revenue estimates for the third quarter come in at $33 billion, which would be an 83% increase from the prior year

article-image

Senator Cynthia Lummis hopes a US strategic bitcoin reserve can be teed up for “adoption in 2025”

article-image

As EIP-4844 “blobs” transform the economics of Ethereum layer-2s, a growing debate pits long-term scalability against immediate ETH value

article-image

Prosecutors argued that FTX co-founder Gary Wang cooperated in their case against former FTX CEO Sam Bankman-Fried

article-image

The two largest crypto exchanges respectively run the second- and sixth-largest Solana validators

article-image

MicroStrategy’s bitcoin buying has exploded — it now holds 1.7% of the asset’s circulating supply