8btc Interview | How the Nine Multisigs Lead Sushiswap to Decentralization
‘Crypto drama of the year’, ‘Uniswap killer’, when you hear people using these words, what will you think of? In crypto community this year, it’s definitely Sushiswap.
Sushiswap, was born as a fork of Uniswap, but is not willing to become just the shadow of Uniswap. Having locked up $350m within a day of going online, Sushiswap continued to drain liquidity from Uniswap, making it a target for huge capital. It was even listed on several major crypto exchanges within a few days.
When people were regret about not owning SUSHI (the governance token of Sushiswap) since it went up from $2 to $11, Chef Nomi, the anonymous founder of Sushiswap, became the villain and sold 2.5 million SUSHI to about 18,000 ETH. Chef Nomi insisted that it was not an exit scam, instead he compared himself to Charlie Lee (the founder of Litecoin sold all of his LTC at a high price and said he would focus on technical development).
Markets, however, were unconvinced, with SUSHI tumbling 90%. Coincidentally, FTX founder Sam Bankman Fried (SBF) sent out a series of tweets in which he criticized Chef Nomi and Sushiswap and gave his opinion on the future development of Sushiswap.
Then Sushiswap’s private key was transferred to SBF. Under the guidance of SBF, Sushiswap successfully completed the migration and selected 9 multi-signature members. Sushiswap officially started a new chapter.
The 9 multisigs are SBF_Alameda (FTX CEO), Rleshner (Compound founder), 0xMaki (Sushiswap GM), Lawmaster (head of Research at The Block), CMsholdings (CMS Holdings), Mattysino (CEO of Sino Global Capital), mickhagen（Genesis Block founder）, AdamScochran (partner at Cinneamhain Ventures) and zippoxer (Zippo).
Matthew Graham, CEO of Sino Global Capital, one of the 9 multisigs, is an old friend of 8btc. We took this opportunity to learn about the governance of Sushiswap and some of the existing problems of DeFi.
Matthew told us that to become a multisig, you need to go through a certain process: the first stage involved nominating yourself for one of the positions on Twitter, with the top 20 going on to the next round for a final vote by Sushi holders. He said that this vote of approval represents the trust the blockchain community hold in them.
In addition to the responsibility of being a multisig, Matthew revealed that there was another important reason to join in: that is 0xMaki, another anonymous member of the Sushi community. He trusted 0xMaki. Little is known about 0xMaki, except that he once called out to Chef Nomi to set up multisigs to manage Sushiswap’s Treasury fund, after which he would “lead Sushi to success”.
Some say that setting up 9 multisigs is like electing a board in traditional world, which goes against the spirit of decentralization. But Matthew has no such concerns. Compared with the closed-door board election, he said, the multisig voting process is more transparent and decentralized, all Sushi holders can vote, and Sushi users and believers have an incentive to choose the right candidate, which promotes the future development of Sushi.
So, with so many people railing against Sushi, why did FTX end up with control of the private key? Perhaps it is because FTX is strong in every way. Matthew says he thinks the dilemma Chef Nomi has created can be solved by FTX. As for whether Sushi can start a wave of competition and open up opportunities for more Uniswap competitors, Matthew believes that competition is always there, but competition doesn’t mean replacement.
“The DeFi space is innovating rapidly and has changed significantly in the past year. Many new innovative applications are being built that are unimaginable in traditional finance. It’s a highly competitive industry, so there will always be competition. That doesn’t necessarily displacement. Copycats with no innovation will die in the long run. The key is to keep innovating, and Sushi has plans to do just that.”
As a blockchain project community grows, more and more interests are involved, and many projects, especially DeFi, choose to decentralize governance by giving the power to the community.
“Ultimately, the purpose of DeFi is to make finance accessible to everyone. We fully support openness and decentralization.”
Matthew said. However, because of the “mess” Chef Nomi left behind, he thinks Sushi is a special case. This community needs strong leadership and stability, hence the existence of 9 multisigs.
“The intention of DeFi is to lower the barrier of intricate financial products and services and make those applications more convenient for the daily user. As many applications and use cases are built on decentralized platforms such as Ethereum, competition will increase, which incentivizes platforms to keep innovating and therefore providing the most optimal solutions to users. This also includes daily users like you and me. Many of the first yield farmers were die hard crypto enthusiasts who were willing to pay the initial gas fees and were rightfully rewarded with high returns. As technology develops speed will inevitably increase and costs will go down. Until then if an investor of any size is willing to get involved and support projects early, the rewards are certainly there. We feel that DeFi and blockchain is far more open to your average joe than traditional finance.”
Finally, when asked if Chef Nomi is active still in the Sushi community, Matthew says that he has been involved in the development of the community and providing advice when necessary, but his leadership role is no longer there.
Interestingly, a lot of people assume that Chef Nomi is the SBF himself, but that’s just speculation. Last week, the Sushiswap drama took another turn for the better when Chef Nomi tweeted that he regretted his previous cash-out and returned some 38,000 ETH to Sushiswap’s Treasury fund.
What’s in store for the future Sushiswap? My imagination is running out.