Sushi to Shut Lending Product to Focus on DEX

Leading decentralized finance (DeFi) application Sushi will phase

Out two products as part of wider plans to make the protocol more sustainable and profitable.

In a tweet thread last week, chief technology officer Matthew Lilley stated that two products - the Kashi lending platform and MISO, a launchpad for external tokens - would be discontinued due to low public interest.

Lilley added, "we decided to phase down Kashi (Sushi Lending) and Miso (Sushi Launch Pad)." He further noted that yet-unnamed "successors" to these products could be released in the future provided Sushi has the necessary resources to support its operations.

Lilley stated that Sushi developers would focus more on the protocol's decentralized exchange (DEX) product. “In Q3/Q4, it became clear that there was a strong need to prioritize, and we opted to focus on ideas to improve our most popular and profitable product, SushiSwap,” he explained.

As per DeFiLlama statistics, SushiSwap, the DEX, has approximately $390 million in locked token value as of Tuesday. Some $280 million of that is tied to Ethereum-based assets.

In contrast, Kashi has just more than $800,000 in locked assets, indicating a lack of demand for the lending product. It accumulated approximately $40 million at its peak in 2021 but has subsequently suffered significant outflows.

2022 was a tough year for crypto lenders, with centralized companies like Celsius Network and Voyager Digital declaring bankruptcy after heavily relied-upon DeFi profits dried up.

Since December, Sushi developers have been suggesting and implementing improvements to the protocol to ensure its long-term operational viability.

As per local media outlets, the Sushi treasury only provided for 18 months of runway computed from the first week of December, resulting in a massive deficit in its treasury. Kanpai, a fee-diversion protocol, was set to 100% of fees diverted to the treasury multisig for one year, or until new token distribution and reward systems were established, according to lead developer Jared Gray.

On Dec. 30, Gray suggested a token buyback, fee burns, and rewards plan to the Sushi community. As of Tuesday, the plan is still being discussed.