According to a request filed on December 30 on the Sushi forum, Jared Gray, the CEO of decentralized exchange SushiSwap, has plans to restructure the tokenomics of the SushiSwap token.

In the new tokenomics model that has been presented, time-lock tiers will be implemented for emission-based incentives. In addition, a token burn mechanism and a liquidity lock will be included to provide price support.

According to Grey, the new tokenomics plan is to increase “treasury reserves to ensure continued operation and growth.” Additionally, the plan seeks to improve the liquidity and decentralization of the platform.

Under the suggested approach, liquidity providers (LPs) would get 0.05% of the money generated from interchange fees, with larger volume pools getting the largest share.

LPs will also have the option to lock in their liquidity in order to receive higher issuance-dependent rewards.

Also, SUSHI wagered (xSUSHI) will not win any part of the fee money; rather, you will receive awards determined by issuances and paid in SUSHI tokens.

Broadcast-based prizes will be determined using time lock levels, with longer time locks resulting in larger prizes than shorter time locks.

It is possible to make withdrawals before the expiration of the time locks, although doing so will result in the loss and destruction of the rewards.

The decentralized exchange will use a configurable amount of the 0.05% exchange fee to buy the SUSHI token back and then destroy it.

The percentage will be adjusted according to the total number of time lock levels that are chosen.

After revealing that it had less than 1.5 years of track left in its treasury, meaning that a huge shortfall was jeopardizing the economic sustainability of the exchange, SushiSwap decided to rework its tokenomics. This decision was made after the company made this disclosure.

Due to the fact that the token-based issuance approach caused SushiSwap to incur a $30 million loss over the course of the previous 12 months in LP incentives, the company made the decision to implement the new tokenomics model.