Open Letter to Sushi Treasury Multisigs

Preface

gm Sers,

It is by no means a happy undertaking to raise grave concerns to the signers of the Treasury multisig wallet, but the Sushi Operations team has chosen to hinder and shut out Sushi DAO members from utilizing previously available tools for discussion and implementation of governance processes.

The following is a collection of concerns raised by community participants. Some are more egregious than others. For the sake of making a compelling argument, we felt it was important to consolidate the most recent concerns into a document to persuade you to do your duty to protect the DAO’s interest from potential bad actors within the Sushi Operations Team.

While it is difficult to say for certain if the well-being of Sushi is truly no longer within their hearts, their actions demand scrutiny and evaluation as some actions they’ve undertaken appear self serving rather than for the good of Sushi.

There have been numerous requests made for greater transparency that have gone ignored with respect to Sushi’s:

• Current legal structure — pertaining to what entities were created for the DAO and Ops.
• Budget and bonuses — Jared and Compensation Committee have both stated intent for transparency here. Over a year, with no serious updates.
• Undelivered deliverables from Sushi 2.0 and projects such as Shoyu being sunset without the DAO being informed.
• Unfulfilled snapshots — Core posted, and others.
• Sushi’s current direction — Jared has been promising to deliver a Governance Dashboard for more than a year now that is intended to provide the DAO with regular updates on spending, and direction, etc.

Compensation Committee — Undisclosed Bonuses and Salary Negotiations

• The Sushi 2.0 snapshot specifies that the Compensation Committee was designed in part to provide transparency. Exactly how is it transparent if the two members of the compensation committee are Sushi Operation Team members who provide no information to the DAO on the reasons or justifications for salary and bonus packages? At the time that the Compensation Committee was put in place there was an assumption that the two member committee would be temporary, until a committee consisting of, at least some, unbiased individuals could be established. While we can optimistically assume that the Sushi team members forming the committee have good intentions, the fact that they are internal members of the team does imply a natural bias.

The Governance Dashboard

• Where is it? Jared first mentioned it over a year ago. He also indicated it would be available by Q1 of 2023. It is now Q1 2024 and he is promising that it will arrive “soon”. At what point do we begin to lose trust in Jared’s “soon” promises and begin to ask for greater community oversight of the team’s inner workings?
• This Dashboard is meant to give oversight to the DAO. Currently the DAO has no place for regular scheduled updates from the team for the purpose of evaluating their performance.

EOA Wallets Holding LP Fee Assets

• At the very least, this should be a security concern. Too many protocols have had individuals phished or otherwise compromised for us to be trusting Sushi assets to EOA wallets rather than utilizing multisigs for additional safety
• Given the growing list of concerns with the Operations Team, it should also be concerning to know that we do not have full documentation of all wallets under Sushi control so that we can do our due diligence as a community and keep eyes on assets.

Coherent Budget

• At best Jared has provided a basic overview of expenses, given that the Compensation Committee cannot be trusted to be unbiased, more information should be supplied unless the Compensation Committee is reworked to include members that the DAO trusts to oversee salary and bonus packages.
• While it is good to protect the privacy of contributors, the lack of disclosure requires considerable trust from the DAO. As this document outlines, trust is spread thin.

Legal Structure

• Who represents Sushi?
• How many entities have been set up and exist?
• Is there a DAO entity?
• A signal proposal was put up to change Sushi’s legal representatives. This was not an implementation vote. This highlights that the governance process could benefit from being further codified so that the current/future Operations Team properly utilize snapshots. A signal vote is not the same as an implementation vote. Based on this, the DAO cannot be certain whether the legal representatives were changed, or if an implementation vote is forthcoming.
• A request for $3M to be made available for liability was also put forward, but only as a forum post. This again, leaves the DAO questioning if the team is improperly following governance protocols, or if they have changed their minds, or if a signal and implementation are forthcoming. Currently the forum is no longer accessible.

Incoherent Tokenomics Proposal

• The tokenomics proposal that took a year to assemble was voted down by a governance vote. Why did this take a full year to produce? Again, while we can optimistically hope that the team has Sushi’s best interests at heart, it is painfully obvious that this may have been delayed to span the entire year that Kanpai allowed the Operations Team to collect xSushi fees. It was implied that once the new tokenomics were ready to implement, the Operations Team would no longer be collecting xSushi fees, thus they were possibly incentivized to delay the release of the tokenomics proposal until xSushi reverted to a 90/10 split.
• Is the Operations Team currently working to produce something more amenable to the community? We have now reverted to xSushi. The team and community were in agreement that a better tokenomics model would be desirable.
• If the Operations Team is working on fixing the tokenomics proposal, why isn’t a concerted effort being made to engage the community in the process to ensure it is not met with disdain once more? The Meiji initiative of old was a community driven effort to consider alternatives. Why have we not seen any outreach to rekindle an initiative of this sort? If Jared, and the team are so constrained for time, they should be reaching out to the DAO. Instead they promise they’re working on a Governance Dashboard intended to supply transparency, and when inquiries are raised on its progress they simply respond that it is coming “soon” or the queries go unaddressed. How is this proper communication to the DAO? Since Jared’s installation as CEO there has been little to no attempt to maintain open communication. They treat Sushi like a closed protocol delivering products to consumers rather than as a DAO with governance authority to change and direct Sushi as needed.

Persistent Censorship

• Why does Sushi’s Operations Team find it necessary to delete messages pertaining to governance concerns?
• Why does Sushi’s Operations Team lock and close forum proposals that they do not agree with? This indicates the Operations Team places no value in community opinion, insights, or ideas. The act of censoring in this way directly contradicts decentralized discussion of Sushi’s path.
• It is interesting to note that the Operations Team is more likely to censor direct criticisms rather than negative comments about Sushi’s price action and predictions of its decline. Their censorship model is used to avoid scrutiny by those wishing to participate in governance and raising legitimate concern. To imply community concerns related to operations should be removed, and individuals banned from further communication, does not nurture conducive DAO governance. The Sushi Community appears to have been relegated to a position where we can only act as cheerleaders for the Sushi Operations Team. This is not a DAO governance model.
• Why is the Operations Team ignoring snapshots? They have closed proposals that they, as a group, appear to disagree with. This hinders community discussion. The Operations Team are then deciding that there is no merit to these community proposals. Obviously we cannot expect “core”, whatever that means, to put these proposals up for a snapshot vote. The only remaining action by the community is to rely on members holding the minimum, 200k SP, to post a snapshot. This snapshot can then be ignored by the team. They were locking open discussion on the Sushi Forum prior to its deletion.
• The Sushi Operations Team have made the claim that Trantor and others are working for/with Ramses DAO to hinder or sabotage Sushi. This can be inferred to be their reason for ignoring and closing these proposals. The Operations Team is thus using a protectionist position and treating governance voters as hostile to the Sushi protocol? The current proposal by Trantor has overwhelming DAO support. Are the Operations Team implying that no non-hostile governance token holders remain? There appears to be no contention from any major Sushi token holders, only team criticism. If they are implying that governance processes should be ignored, locked, deleted, because they are hostile to Sushi, then they should be communicating this widely so that any non-hostile DAO members can be made aware of this. Except this is not the case. The team is worried because the DAO is scrutinizing their handling of Sushi, and attempting to exercise governance. Any claims by the team that they are acting to protect Sushi’s best interests are simple gaslighting. Who is Sushi? What is Sushi’s best interest? The team’s continued employment and collection of salaries? A DEX with dwindling volume? They have demonstrated they do not believe those holding SUSHIPOWAH and attempting to take governance action, or work collectively to produce open discussions are part of Sushi.
• The Merkel Distributor Contract proposal/snapshot that was closed/ignored simply requested that the Operations Team carry out — in full — a proposal that Jared himself posted to snapshot. Refusal to post this proposal to snapshot and locking the forum thread can only be seen as the team choosing to disregard previous snapshots that they have deemed to no longer be ideal for their agenda.

So What Is Operation’s Agenda?

• The Operations Team is supposed to be the beating heart of Sushi. They are intended to be part of the Sushi ecosystem, not its entirety. As a Decentralized Exchange operating with a governance token the Sushi Operations Team should fully understand their place in the Sushi ecosystem and supply the DAO with regular coherent documentation so DAO members can discuss and take action as needed through governance channels.
• If they do not believe they have to answer to the DAO, does this imply Jared and the team are the sole individuals directing and profiting from Sushi?
• If the DAO doesn’t have any authority — as it could be argued from a 100% snapshot going ignored — then what is its purpose? It stands to reason that the Operations Team simply wants people to hold the Sushi token to prop up the price so that they can continue to be paid their salaries with no oversight or obligations to the holders. Not good.
• Currently the Operation’s team wallet has in its custody treasury assets that should be held under the multisig control. These include:
• The Merkel Distribution Contract Sushi that was clawed back. This is roughly $5M in assets.
• An airdrop from the Arbitrum Foundation that explicitly states in its documentation that it is intended for DAO treasuries. This was directed to the Operations control instead by the team, via the team controlled twitter. This is valued at approximately $9M
• It has come to our attention that the team is pointing to old snapshots and requesting the multisig deliver to operations additional Sushi tokens. They are currently holding treasury assets in excess of their ask. This seems like another attempt to secure additional funding for their own salaries to continue operating as they please, while ignoring their duties to provide transparency and communication to those wishing to participate in DAO processes. Any requests for additional funding from the multisig should be made via governance voting, and they should first return treasury assets to the treasury where they belong.

Final Considerations

If anyone is acting with hostile intent towards the interest of the Sushi ecosystem, it is the compensation committee, CEO and treasurer. If their intent was pure would they really need to delete Sushi’s forum? This is where open communication is intended to happen. They could have provided transparency to governance holders at any point in time but instead choose censorship.

Where can people holding xSushi go to congregate, discuss, and share their thoughts on Sushi’s current team and direction without the team having the authority to censor? Sushi previously had the Samurai on Discord who helped prevent Joseph Delong, and Frog Nation from entirely spinning the narrative by using their admin privileges and autonomy to ensure the community was not being fed a fabricated narrative.

The current team has unhindered control of all channels for DAO communication within the Sushi ecosystem. The last bastion was posting to Snapshot directly the concerns raised by the community. The team is attempting to spin this as one individual with one objective. This is a community led attempt to regain proper channels for DAO governance with sufficient SUSHIPOWAH delegated to show it has weight behind it. It was necessary for a whale to delegate this to the SushiCitizens.eth wallet to show that this is not just a narrative by those with no vested interest.

As the Treasury Multisig wallet signers you have a duty to uphold the will of the DAO. If you are unsure of what this is due to parties pouring conflicting stories into your ears then do the right thing and demand a space for open discourse as has been done historically. BoringCrypto helped facilitate such an initiative when the team and community were previously at odds.

One of the proposals that was locked and dismissed near the start of this unhappy chain of events was a call to develop an Oversight Committee that would be voted in via the DAO. Suppression of this should raise concern.

Much love,

SushiCitizens.eth