Thread by @Eric_the_Strait

1) Sushiswap short position strategy

Sushiswap Crisis

Sushiswap CEO, Jared Gray, recently mentioned deteriorating Sushiswap yields and the possibility of depleting the Treasury fund within 1.5 years. Accordingly, a governance proposal was proposed on Dec 6.

#Sushi #Sushiswap

2)

Approx 0.05% of Sushiswap transaction fee is being distributed to holders of xSUSHI (tokens for $SUSHI stakers) via Kanpai protocol, 10% of which is being allocated to the Sushiswap treasury.

3)

According to the proposal, existing structure is changed as 100% allocation to the Sushiswap Treasury for 1 year or until new Tokenomics come out.

TVL, price, and market capitalization are all on a tremendous decline.

4)

Sushiswap on-chain analysis

Bear market + Many DEXs appear ⇒ Number of users plummets ⇒ Transactions plummet ⇒ Fees plummet ⇒ Revenue deterioration ⇒ Treasury funds outflows

This deterioration in revenue and profit has continued for about a year since Jan this year.

5)

$Sushi's liquidity contracts, which are the source of transaction fees, have been decreasing recently.

If the above governance proposal passes, xSUSHI will become less attractive, reducing the need for $Sushi staking.

6)

However, since 99% of the total token supply has already been distributed, the price impact of the token unlock seems insignificant.

7) $Sushi price forecast and investment strategy

- Unless there is a dramatic momentum shift, price is highly likely downside
- Thus, when the price rebounds slightly, open a short position with an appropriate multiplier and close the position

Thanks for @theData_Nerd