ETH Mainnet Legacy Spot Synth Migration
As outlined in SIP-2059, Synthetix is deprecating the exchange of non-USD spot synths on Ethereum Mainnet (L1) and preparing to migrate users to the V3 system. This update requires action from users holding sETH, sBTC, or other spot synths besides sUSD
SCCP-2124 has now been implemented. This means:
1. The exchange of non-USD spot synths on Ethereum Mainnet has been fully deprecated.
2. If you are still holding any deprecated spot synths, please contact the Treasury Council in the Synthetix Discord for redemption. They will consider all redemptions within this timeframe.
3. Spot Synth skew has been eliminated for SNX stakers, simplifying debt hedging.
As outlined in SIP-2059, Synthetix is deprecating the exchange of non-USD spot synths on Ethereum Mainnet (L1) and preparing to migrate users to the V3 system. This update requires action from users holding sETH, sBTC, or other spot synths besides sUSD on Ethereum Mainnet. The migration will help move liquidity to V3 and manage the V2X skew.
Key Points:
- Spot synth exchanges (and atomic swaps) are being deprecated on Ethereum Mainnet.
- Spot Synth exchanges on V2X Optimism will not be impacted.
- Users can swap their sETH, sBTC, and other non-USD spot synths using 1inch or DefiLlama until Monday, April 29th.
- After April 29th, any remaining non-USD spot synths can only be redeemed via the L1 redeemer contract at a discounted rate.
- The Spartan Council will begin utilizing a discount rate on Monday, April 29th, to utilize the synth redeemer. The longer users wait to redeem their non-USD synths, the higher the discount ratio will be.
- This SCCP proposes to enable the dynamic redeemer specified in SIP-2059 and lower the discountRate from 100% to 90%
- Migrating liquidity to sUSD will help introduce liquidity for sUSD and ramp up activities on Synthetix V3.
- This change helps balance the skew, as V2X Spot Synths do not naturally balance, unlike V3 Spot Synths, which impose a price impact based on the skew, similar to the design of Synthetix Perps.
- As a result of this change, skew is expected to become neutral and reduce/remove its current exposure to ETH/BTC.
The current spot synths generate minimal fees for the protocol and create significant hedging costs and debt pool imbalances for SNX stakers. In V3, spot synths like sETH will be hedged by imposing price impact based on the skew, similar to how Synthetix Perps incentivize traders to maintain delta neutrality. Deprecating the exchange of these spot synths and then incentivizing users to swap out these assets is critical to supporting the launch of new products within Synthetix V3.
Users holding sUSD will not be diluted via a discount rate; users holding sUSD will not need to do anything. Also, users holding non-USD spot synths on Optimism or SNX on both chains do not have any next steps - only users holding non-USD synths on Ethereum Mainnet are impacted.
Next Steps for Users:
Before Monday, April 29th - To swap your non-USD synths:
- Visit https://swap.defillama.com/ or https://app.1inch.io/#/1/advanced/swap/ETH to swap your non-USD synths to sUSD (or other assets).
Beginning on Monday, April 29th - To redeem your non-USD synths:
- Visit https://staking.synthetix.io/wallet/balances (make sure you're connected to Ethereum Mainnet).
- Locate your non-USD synth holdings and redeem each one.
After the redemption process is complete, you will receive sUSD in your wallet, and your non-USD synth balance will be reduced to zero.
If you have any questions or need assistance with the redemption process, please reach out to the Synthetix community on Discord.