After a prolonged debate, SushiSwap, a decentralized exchange, has unveiled a fresh brand and business model known as Sushi Labs to replace its decentralized autonomous organization (DAO) with a council structure. The introduction of Sushi Labs on June 11 marks a significant shift in the ecosystem, aiming to address market demands and improve the protocol's responsiveness to changes. The new autonomous entity, Sushi Labs, is designed to administrate and oversee the Sushi ecosystem, offering a council-oriented operational approach.

Unlike the previous DAO setup, the revamp to a council structure was proposed in March to streamline governance processes and enhance user experience. The new model adopted by SushiSwap is inspired by the council structure of Synthetix, a derivatives protocol, which includes the Sushi High Kitchen, Treasury Council, Grants Council, and Ambassador Council. The core governing body, Sushi High Kitchen, composed of six to eight members, will manage the protocol's operations under a multisig setup for transactions.

Jared Grey, the current managing director of Sushi Labs, emphasized the potential of the restructured organization to alleviate issues such as stagnant growth and liquidity concerns. With an allocated budget and strategic utilization of existing products like Route Processor, Sushi Labs aims to enhance liquidity on the Sushi decentralized exchange.

Sushi Labs will now take control of the DAO's significant budget, which includes 25 million SushiSwap tokens. Tokenholders retain the authority to decide on treasury allocations while relinquishing involvement in operational decisions. Despite recent challenges faced by SushiSwap, including declining fees and revenue, the introduction of a multitoken product suite is expected to diversify product costs and reward opportunities for tokenholders.

The new business model, however, has been a topic of debate within the community due to its perceived centralization. Critics have raised concerns about the transition towards a more centralized structure, expressing skepticism about the future trajectory of SushiSwap. Notably, SushiSwap's financial struggles since 2022, along with liquidity concerns highlighted by Grey, prompted a strategic reassessment of tokenomics and treasury management.

The evolution of SushiSwap into Sushi Labs signifies a significant move towards transformative governance and operational efficiency within the decentralized exchange landscape, paving the way for enhanced liquidity and sustainable growth.