Inflation of sushi (SUSHI), the native token of SushiSwap, a decentralized exchange (DEX), accelerates following a community vote.
On December 14, the community approved a governance proposal to increase the annual emission rate (AER).
This decision, which raises SUSHI emissions from 1.5% to 5% of total supplywas practically controlled by a single wallet, which concentrated almost all of the votes cast, with no votes against or abstentions recorded.
In this way, SushiSwap may issue up to 14.25 million SUSHI per yearcompared to the previous 4.3 million.
These tokens will go towards liquidity mining, new token pairs, private liquidity deals, and other DEX growth incentives.
The goal is not only to increase supply, but to use SUSHI as a tool to structure long-term liquidity agreements and strengthen the protocol’s sustainable revenue model, according to explained Sushi Labs, the team behind SushiSwap.
Before the vote, the token was trading above $0.31. However, in the last 24 hours it fell below $0.29as seen in the following graph:
SUSHI price drop is related to the increase in the issuance of the token, which generates greater inflation. As the available supply increases, the value of each unit tends to dilute, putting downward pressure on its price and affecting short-term investor confidence.
It is worth remembering that the token SushiSwap was one of the great protagonists of the DeFi-mania of 2021.
As CriptoNoticias has pointed out, SushiSwap is a fork of Uniswap that allows the exchange of tokens and offers returns to liquidity providers, although with the particularity that the benefits can be paid in a fixed manner in SUSHI for participating and supporting the platform.