Increase SUSHI Annual Emissions Rate (AER) for AMM Liquidity, Listings & Private Capital Deals [Signal]

This proposal’s expectation is to produce a community signal. Full details and discussions thus far can be found at:

https://forum.sushi.com/discussion/1312021-increase-sushi-annual-emissions-rate-aer-for-amm-liquidity-listings-private-capital-deals-implementation

Synopsis:

This proposal seeks to raise the SUSHI Annual Emissions Rate (AER) from 1.5% to up to 5% of total annualized SUSHI supply, with emissions primarily focused on:

Deepening AMM liquidity on core networks Incentivizing highquality token listings Structuring private liquidity deals with aligned capital partners Funding growth initiatives such as aggregator rebates and Blade POL Sushi Labs generated over $10M in revenue in 2024, and our near-term goal is to scale Sushi to $20M in ARR. The most direct way to achieve this is to grow deep, sticky liquidity in core pools and scale protocol-owned liquidity (POL), particularly for Blade.

Blade has already been seeded with roughly $1M of initial POL and is averaging ~$2–5K per day in fee revenue. If we scale this model with targeted emissions and private-capital partnerships across more pools and networks, Sushi has a clear path to the $20M ARR target.

If Sushi reaches and sustains this ~$20M ARR level, we believe the protocol will be in a position to support substantially increased SUSHI token buybacks, funded from a growing treasury reserve of revenue and non-SUSHI assets. A key objective of this program is to build that reserve in a disciplined way, subject to governance, execution, legal approval and market conditions.

Why Now Market structure is rotating back to simple LM. Major DEXs are moving back toward straightforward, emissions-managed liquidity mining and away from overly complex bribe systems.

Sushi is under-incentivized vs peers Running lean preserved the runway but left Sushi’s liquidity on core networks (Ethereum, Base, BSC, Polygon, Arbitrum) behind competitors that used more aggressive emissions strategies.

We have product and order flow; we lack capital and incentives Sushi Labs already operates a top-tier aggregator across 40+ networks and SushiXSwap across 25+ networks. What’s missing is sufficient capital and incentives to densify liquidity in key pools and convert this surface area into higher revenue. Sushi has phenomenal PMF and substantial revenue; pulling these strategic levers will be key to spurring growth.

Proposal

1. Raise SUSHI AER from 1.5% to up to 5%

Objectives

Work toward $20M ARR by increasing fees from AMM pools, Blade, and the aggregator Rebuild and retain liquidity on Ethereum, Base, BSC, Polygon, and Arbitrum Support new listings and ensure sustained liquidity beyond initial campaigns Fund targeted growth experiments (aggregator incentives, cross-chain routing, etc.) Build the recurring revenue and treasury base needed for future SUSHI buybacks Mechanics

AER ceiling: up to 5% annualized on total SUSHI supply At ~285M supply:

5% AER ≈ 14.25M SUSHI/year Current 1.5% AER ≈ 4.28M SUSHI/year Incremental headroom: ≈ 10M SUSHI/year Dynamic emissions: Emissions and allocations are adjusted dynamically by Core team, with the ability to increase or decrease allocations based on simple KPIs like volume, fees, TVL, and retention. Poorly performing programs can be scaled back and capital re-directed.

Illustrative allocation (non-binding):

25–35% – AMM Liquidity on core pools 15–20% – New listings (time-boxed LM with tapering) 25–35% – Private capital liquidity deals & Blade POL 15–20% – Aggregator incentives & strategic growth initiatives 2. Private Capital Liquidity & POL Program

The main goal of increasing AER is not to spray emissions, but to use SUSHI as a tool to structure long-term, aligned liquidity deals. Allocating SUSHI needs to be accretive to the long-term revenue model of the Sushi protocol.

Key elements

Use emissions to support deals with funds, market makers, OTC desks, and large LPs that:

Commit capital to specific core pools (e.g., ETH/USDC, BTC/USDC, blue-chip L1/L2 pairs) Provide longer-term depth vs. short-lived “LM mercenary” liquidity Align with Sushi’s roadmap (Blade, Ekubo-based AMM adoption, cross-chain routing) Scale Blade POL from ~$1M and ~$2–5K/day in fees into a more meaningful revenue engine that contributes materially to the path toward $20M ARR.

Example structures (illustrative only):

Liquidity loans with emissions top-ups and optional SUSHI call/fee share Co-incentivized POL pools with partners Performance-gated incentives based on TVL, fees, and retention 3. Revenue, Treasury Growth & POL Flywheel

As emissions under this proposal drive more volume and fees, the goal is to convert that growth into sustainable ARR and a stronger treasury that can be compounded back into the protocol.

Revenue & ARR focus The primary objective is to grow Sushi’s fee-based revenue and work toward a sustainable ~$20M ARR profile by:

Increasing AMM and Blade fees from deeper, more efficient liquidity Capturing more aggregator flow across supported networks Supporting products (e.g., Ekubobased AMM) that expand Sushi’s addressable volume Compounding into POL & the flywheel As revenue and non-SUSHI treasury assets grow, a portion can be allocated toward:

Expanding protocol-owned liquidity (POL) in high-impact pairs Supporting deeper routing and better pricing for traders Reinforcing the revenue flywheel: more POL → more volume and fees → more revenue → more capacity to reinvest The intent is that, over time, a larger POL base and stronger recurring revenue make Sushi less dependent on emissions and more driven by real, compounding cash flows.

Future capital management options If Sushi reaches and sustains a stronger ARR and treasury position, Sushi may choose to evaluate additional capital management options including further reinvestment or a SUSHI buyback program. This proposal does not implement any such program; it focuses on creating the revenue and POL foundation that could make those options viable in the future subject to legal approval.

4. Ekubo AMM Integration & Adoption

Instead of a generic “V4 analogue,” Sushi is aligning around Ekubo’s AMM framework as the core engine for its next-generation liquidity.

Increased AER is intended to ensure:

Dedicated LM for Ekubobased pools on Ethereum, Base, BSC, Polygon, Arbitrum and other priority networks Incentives that can be targeted at specific pools and even specific ranges within those pools to maximize capital efficiency Integration with Blade and the aggregator to route order flow into the deepest, most efficiently incentivized liquidity Grants and targeted incentives for builders leveraging Ekubo (custom curves, hookslike behaviours, routing integrations, solver infra) Partner coincentives for protocols that choose Sushi’s Ekubo-based pools as a primary liquidity venue As Blade leverages deeper, more efficiently incentivized liquidity, its increased trading throughput feeds back into protocol fee generation, reinforcing the broader strategy: use targeted emissions today to bootstrap durable liquidity and POL, thereby reducing and ultimately reversing net token issuance over time.

Overall, this proposal aligns Sushi’s tokenomics, AMM infrastructure (via Ekubo), and execution venues (including Blade) around a single objective: building a sustainable, capital-efficient liquidity base that can support a future where protocol fees exceed token rewards.

KPIs Emissions and programs under this proposal should be evaluated based on simple, transparent metrics, including:

Revenue growth and progress toward $20M ARR TVL, volume, and fees on core pools and Blade Revenue Growth per SUSHI emitted (overall and by major program) Growth of nonSUSHI treasury assets and POL Adoption and usage of the Ekubo AMM stack If programs are not generating sufficient ROI, emissions can be scaled back and reallocated.

Requested Vote For — Approve this proposal to:

Increase SUSHI AER up to 5% of total annualized supply and Implement any actions incidentally required to execute the substance of this proposal Against — Reject this proposal and maintain SUSHI AER at 1.5%

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This proposal contains forward-looking statements that reflect our intentions, expectations, and projections regarding the future. These statements are based on current information and assumptions available as of the date of this proposal and are subject to risks, uncertainties, and changes in circumstances that may cause actual outcomes to differ from those anticipated. While we are committed to pursuing these outcomes, they cannot be guaranteed.