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Decentralized exchange SushiSwap, known for its decentralized finance (DeFi) protocol, has undergone a significant transformation.

The organization changed its name to Sushi Labs. It is an autonomous entity that replaces the old decentralized autonomous organization (DAO). Despite the change, the SushiSwap name will continue to be used for its operations focused on decentralized exchanges (DEX).

The decision to revamp SushiSwap’s structure came as a response to the challenges of stagnant growth and liquidity issues faced by the platform. The new business model introduced under the name Sushi Labs aims to tackle these issues more effectively.

The DAO has been replaced with a “board structure,” inspired by the Synthetix derivatives protocol, to improve governance and operational efficiency.

Sushi Labs’ new organizational structure includes four distinct boards: the Sushi High Kitchen, the Treasury Board, the Grants Board, and the Board of Ambassadors.

Sushi High Kitchen, made up of six to eight members, will act as the main governance body, overseeing a multisig setup for transactions. This restructuring aims to bring more clarity and efficiency in decision-making and strategy execution.

SushiSwap announces changes

Jared Gray, now managing director of Sushi Labs, commented on the changes and his expectations for the future of the platform.

“Many attribute Sushi’s stagnant growth and AMM’s liquidity issues to the migration of LPs to other DEXs in search of better yield. However, with our newly created organizational structure, sufficient budget, and leveraging successful products like Route Processor, we have the tools to increase liquidity on the Sushi DEX,” said Gray.

The transition to Sushi Labs also includes the introduction of a suite of multi-token products. This change aims to spread product costs and provide more reward opportunities for token holders, increasing added value for users and encouraging participation on the platform.

While the revamp has generated debate and criticism due to its centralized nature, with some community members accusing the protocol of a hostile takeover, Sushi Labs leadership maintains that the changes are crucial to overcoming financial challenges and improving liquidity management.

In terms of financial performance, SushiSwap faced a sharp drop in revenue. In May 2023, for example, the exchange generated US$1.62 million in fees. This is a significantly lower value compared to previous bull periods.

The new structure and products planned by Sushi Labs aim to reverse this negative trend and position the platform for sustainable growth in the future.

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