On June 11, the Sushi protocol introduced Sushi Labs, an autonomous administrative, technical and operational company that will manage the Sushi ecosystem. This change, first proposed in March, was made to respond to “market demands and user needs”, including a slow response to market changes due to “management cumbersomeness”.

The new Labs model will operate under a council structure similar to its derivative protocol Synthetix. Synthetix consists of four councils: Sushi High Cuisine, Treasury Council, Grants Council and Ambassador Council. The High Kitchen, consisting of six to eight members, will be the central governing body for the protocol and will oversee the establishment of multi-signature for transactions.

In a note to the Sushi community, Jared Gray, Sushi Labs’ current executive director, attributes “much of Sushi’s stagnant growth and AMM liquidity issues to liquidity providers migrating to other DEXs in search of better returns. But our newly formed corporate structure is adequate.” “We have the budget and the tools to increase liquidity on Sushi DEX using successful products like Route Processor,” he says.

Sushi Labs will inherit the DAO’s multimillion-dollar budget, which includes 25 million SushiSwap tokens. Token holders will still have the authority to decide treasury allocations, but they will not be involved in operational details.

Sushi generated $1.62 million in revenue and $270,500 in profits in May, according to DefiLlama data. These numbers represent a significant decline compared to its performance in the previous bullish cycle. In May 2021, Sushi generated $14.37 million in revenue, generating $86.24 million in fees.

Another important change in Sushi is the multi-token product bundle. According to Sushi, this package will help distribute product costs while offering more reward opportunities to token holders. “A multi-token ecosystem reduces the risk of Sushi token inflation and alleviates the financial burden of financing DAO initiatives when products are not profitable,” the statement reads.

In recent months, the new model has caused controversy and criticism due to its centralized structure. Community members had previously accused the protocol of a “hostile takeover”. “Sushi DAO seems to have reached the end of its journey,” commented one Sushi member on the management forum.

SushiSwap has faced financial difficulties, with Gray warning of a $30 million loss in liquidity provider incentives in 2022. This led to an overhaul in the token economy. The decentralized exchange also announced in December 2022 that it had only 1.5 years of operational runway remaining. This has led to a renewed focus on diversifying its treasury and improving liquidity management.