July 2021 Monthly Update
July was another exciting month in Synthetix Land! Here are some of the highlights:
Layer 2 updates
The main update here is that synth exchanges went live on L2 last month! This is one of the biggest steps toward offering a more complete version of Synthetix on the Optimistic Ξthereum L2. In this initial testing phase, exchanges will be enabled for sUSD, sBTC, sETH, and sLINK, though more synths are expected to be supported on L2 soon.
This release is part of a continual phased rollout of the Synthetix protocol on OΞ. From here, we expect to be able to better evaluate network performance in production, observe the behavior of users on L2, and gain other valuable insights as additional functionality is rolled out on L2. SIP-169 also outlines a process for deprecating synths with low usage on L1 which will be re-enabled on L2 only at a later date.
Going forward, we’ll be focusing on transitioning more features and liquidity to L2. One critical step in this direction is to unify the L1 and L2 debt pools (SIP-165). The mechanism for merging L1 and L2 liquidity is fairly complex; in short though, exchanges on Synthetix convert one synth into another and update global debt to ensure that the system is appropriately collateralized. Currently the L1 and L2 debt pools are siloed, meaning that they are naive to any exchanging activity occurring on the other layer, and that synths have to stay where their respective debt pools can track them. One solution that’s being explored to address this (until we’re ready for a single debt pool on L2) is to use debt pool oracles to synchronize debt pools across L1 and L2 (SIP-156).
Last month, we mentioned the ongoing effort to decommission the synthetixDAO and lots more progress was made toward this goal in July. SIP-155 formalizes the process through which the synthetixDAO will be deprecated, and two new governing bodies (Treasury Council and Core Contributor Committee) will be formed. SIP-161 provides some specifications for how the Core Contributor Committee would operate.
July was also an interesting month for the ambassadorsDAO. SIP-157 outlines a mandate for the aDAO that includes voting in the best interests of Synthetix in the broader DeFi community (via multisig), advocating on behalf of the Synthetix community in community governance forums, and engaging with other prominent members of the community to discuss and explore decentralized governance frameworks. To help improve the voice and reach of the aDAO, SIP-168 introduces an experimental program (funded by the synthetixDAO) to reward governance participation and cooperation with the aDAO.
The front-end folks were also very busy last month. If you missed it, Yearn recently announced the launch of a vault for hands-off SNX staking. This is a great tool for users who want to contribute to the Synthetix network without actively managing their debt, and it is now integrated into the Synthetix Staking dAapp!
Support for wallet delegation has also been expanded within the Staking dApp. Wallet delegation allows users to specify an additional wallet that can be given permission to control minting, burning, or claiming privileges, which is a very useful tool for users who opt to manage their staking position on mobile devices.