The DEX’s confusing ‘head chef’ nomination process illuminates the challenges of decentralized governance
- The Sept. 26 election follows years of infighting among the DEX’s leadership
- “It’s really crunch time over the next 10 months for SushiSwap,” a head chef candidate said
The decentralized organization behind crypto exchange SushiSwap is tapping its next chief executive.
Instead of having insiders interview and select a candidate, the DeFi platform’s “head chef” will be elected by holders of the protocol’s native SUSHI token following a public campaign.
The election represents a grand experiment in corporate governance and the viability of decentralized business models. But the nomination process has been mired in controversy and comes as Sushi struggles to keep its treasury afloat.
SushiSwap — by far the most important product in the Sushi dapp suite — is the sixth-largest decentralized exchange (DEX) by trading volume, but the protocol’s next head chef will take over an organization battered by leadership tussles.
In 2020, the protocol’s creator stepped down after being accused of running an exit scam that drained $14 million from a developer fund. The next leadership team had its own imbroglio when Sushi’s project lead and chief technology officer resigned in late 2021 amid developer team infighting and allegations of financial mismanagement.
“It’s really crunch time over the next 10 months for SushiSwap,” Andrew Forman, a head chef candidate, told Blockworks.
“We don’t have the treasury that some of the other DeFi protocols have…and right now, our expenses are higher than our revenue,” he said.
SushiSwap’s treasury takes a portion of the protocol’s fee revenue, but its purse is mostly denominated in SUSHI tokens, which have fallen in price from all-time highs of about $20 in 2021 to hovering around $1.
In July, the SushiSwap team put forward Jonathan Howard as the first candidate for the head chef position. A protracted battle ensued over Howard’s proposed compensation of $800,000 yearly, with another $600,000 in vested tokens. In late August, Howard announced in a Discord message he was battling a bad case of the flu and would be dropping out of the election.
The final five
The SushiSwap election is a novel approach to what is essentially a CEO nomination. While Sushi’s electoral process has undergone ad hoc alterations in response to community uproar, the protocol hopes to model a new method of leadership succession for the emergent crypto industry.
“[The election is] bringing a lot of transparency into the process, and the whole purpose of blockchain is to shed light and transparency to areas that traditionally have been opaque. Finance hasn’t been the most truthful industry over the last few decades,” Jared Grey, a head chef candidate, told Blockworks.
Head chef hopefuls will debate on SushiSwap’s weekly Discord call on Sept. 22 before DAO members vote based on their SUSHI holdings on Sept. 26.
This article was originally published on blockworks.co