Inside SushiSwap's Treasury Fights, Shelved Products and Governance Standoff

SushiSwap was once grouped with Uniswap, Curve and Aave as one of DeFi's standout protocols. That reputation has since been dented by a long run of internal conflict.

If there were a ranking of DeFi's most chaotic projects, Sushi would be a strong contender. Founder Maki was pushed out early on, contributor Delong quit in frustration, and Sesta's plans to merge were derailed by the Sifu scandal. Current CEO Jared Grey arrived carrying his own contested history. The protocol was also hacked for $3.3 million about a year prior to this piece, and on top of it all, Sushi received an SEC subpoena.

Yet that track record of dysfunction may not have been a series of isolated events so much as a slow, compounding rot. Over roughly the past year, the picture behind the scenes has grown murkier, marked by opacity that recalls a film-noir plot. What has largely stayed hidden is now coming into view: allegations of broken promises, suppressed discussion, unclear fund allocation tied to bonus compensation, leadership possibly withholding funds, and even talk of a hostile takeover attempt — though whose takeover remains disputed.

This account pieces together on-chain records and public statements to examine the internal workings of a protocol once seen as a DeFi pioneer. Much of it rests on competing, unverified claims from people involved, so while every effort has been made to check what can be checked, readers should weigh the verified facts against the more contested accusations themselves.

01A leadership change followed by scrapped roadmaps

Jared Grey took over as Sushi's Head Chef in October 2022, and tensions inside the organization escalated from there. The ambitious Sushi 2.0 restructuring roadmap, announced roughly six months before his arrival, ended up either watered down or abandoned outright.

Several planned products were quietly shelved within just a couple of months of Grey taking charge, with funding reportedly redirected to other parts of the business:

• MISO v2, envisioned as a fully permissionless multichain launchpad, was discontinued in December 2022.
• Around the same time, Kashi — a lending and margin-trading platform built on BentoBox — was sunset alongside it.
• Shoyu 2.0, an NFT marketplace that began development in January 2022, hasn't been referenced since it appeared in the 2022 roadmap.
• SAK3 NFT redemptions stalled after a November 2023 update, with no further communication since.
• Trident, once pitched as central to Sushi's future AMM architecture, is now being phased out in favor of Sushi v3.

A promised governance dashboard, featured in Grey's January 2023 roadmap, was also dropped — again attributed to budget constraints.

02Where the money actually went

While shelved products were framed as cost-cutting, a look at treasury flows tells a different story. Late in 2022, SushiSwap proposed redirecting fees normally paid to xSushi holders into the treasury, with Grey citing a need to restore profitability and extend runway. That plan never actually materialized.

By late January 2023, a snapshot vote called for the Sushi Ops multisig to return Sushi tokens held in the Merkle Distributor contract to the treasury multisig. Execution dragged on for months, despite the treasury having been central to Grey's "profitability" pitch just weeks before.

Meanwhile, other funds moved elsewhere without much delay. The Arbitrum airdrop — 4.25 million ARB tokens — landed in the Sushi Ops Multisig on Arbitrum, and SushiSwap even publicly thanked Arbitrum for it. As questions were raised on Discord about that multisig's handling of funds, Grey responded quickly to push back.

03An SEC subpoena and a shift toward legal structure

Around this same period, Grey and the Sushi DAO were served with an SEC subpoena, which appeared to eclipse the treasury issue as a priority. Attention instead turned to establishing a Sushi Legal Defense Fund, requesting $3–4 million to cover legal expenses for core contributors. Grey never disclosed the subpoena publicly, raising further questions about transparency.

Four months before that subpoena, a Sushi Legal Structure proposal had already passed, creating a DAO Foundation along with a Panamanian foundation and corporation — a structure that may have drawn regulatory attention in the first place. That DAO Foundation was designed to hold authority over treasury administration, grants, and the broader on-chain governance and proposal process.

Separately, Sushi Labs was registered as a private limited company in the UK in October 2023 — a move that went unannounced to the community.

04The February 2024 standoff

Signs of centralized control persisted: nine months after the original vote, the Merkle Distributor tokens still hadn't been returned. A second snapshot vote on the matter passed on February 7, 2024.

Then, on February 27, a forum discussion opened up broader concerns about how the operations team was handling custody of Sushi's treasury. Community members demanded immediate disclosure of salaries, bonus arrangements, and details on any legal entities set up by the ops team or its representatives, among other requests.

The exchange grew heated — contributor Robert Tausslador pulled out pointed quotes attributed to Grey during the debate — and another participant, GoldenNaim, drew a comparison to Facebook's acquisition of Instagram, arguing that buying out competitors, or taking control of a company via its shares, is standard practice in the corporate world.

That same day, the forum was abruptly switched to read-only, and it went fully dark the following day, prompting public calls to restore access. The outage lasted several days.

Notably, February 27 was also the day Sushi submitted a grant application to the Arbitrum DAO. With the forum offline in the days that followed, community concern grew around the ARB airdrop sitting in the Ops multisig, alongside broader complaints about censorship and snapshot governance.

That pressure may have been the catalyst: on March 11, the Ops team finally transferred just over 3.5 million Sushi out of the Merkle Distributor, ending a ten-month delay.

05Grey goes public, names a whale

The next day, Grey took the dispute public, framing it as "Sushi & Humpy: A Governance Attack Saga." The reference is to Humpy, a prominent yield-farming whale known for a Peace Treaty with Aura and Balancer following an earlier governance standoff there.

Grey alleged Humpy was seeking to inflate Sushi's token supply by 300%, to a total of 750 million tokens, with a large share earmarked for his GOLD token pools — mirroring, in Grey's telling, the same playbook Humpy had used against Balancer. Grey further argued that Sushi's governance process is insulated because the core team only puts forward binding votes rather than relying on fully on-chain mechanisms, and suggested that SushiCitizens were aligned with Humpy, holding delegated authority over half of his tokens, while participating in what he described as a governance attack paired with a misinformation campaign.

The dispute continued to play out in the same thread, with Humpy responding directly. Grey also told journalists to reach out to him on X if they wanted the fuller story.

06An incomplete picture

That offer to talk directly is itself notably absent elsewhere in this saga, much like several other pieces of the story. The ambiguity surrounding Sushi's corporate structure and governance model raises real questions about how far the project has drifted from the transparency ideals the space claims to value.

Other accounts of this dispute exist and offer differing interpretations; readers are left to weigh verifiable on-chain and public facts against the harder-to-substantiate claims on either side. At its core, this looks like a struggle for control that has mostly played out away from public view, and it remains an open question whether SushiSwap's internal tensions will boil over into something more damaging, echoing failure patterns seen in traditional corporate and political institutions.

Given Grey's own contested history, the current conflict fits a broader pattern for a protocol with a long record of turmoil. What this episode underscores, beyond the specific personalities involved, is how easily a lack of transparency can let problems escalate before they're widely recognized — and how governance structures marketed as fully decentralized often still depend on a small group of insiders making consequential calls behind closed doors.

DAOs still generally require some form of incorporated legal entity to handle real-world obligations — paying contributors, lawyers, and other costs in fiat — and Sushi's maneuvering through legal structures reflects a broader trend of DAOs adapting to those practical constraints, sometimes at odds with the original vision of token-holder governance. Operating transparently in public also cuts both ways: it invites scrutiny that can be difficult to manage even when there's no wrongdoing involved.

Whether decentralized governance can ultimately outperform the traditional corporate models it was meant to replace remains an open and, for now, unresolved question.