Decentralised synthetic assets

Lyra Fee Rebate

Lyra Fee Rebate

The newly formed Synthetix Treasury Council will assist LYRA with fee rebates in order to make pricing competitive, and to signal support to ecosystem partners that bring direct benefit to SNX stakers.

A solution to the problem

Due to the current 40bps fee that is charged by Synthetix on Optimism, current options spreads in Lyra are not competitive with the broader market. The spread in the most popular options exchange is around 10bps, which creates strong headwinds for any new protocol competing against established options platforms (decentralized or not).

In order to support Lyra, the Treasury Council has agreed to a month-long trial to subsidize Lyra LPs to enable them to quote a 10bps spread. The subsidy for the trial will consist of $300,000 USD worth in any token of the TC’s preference at the moment of transfer.

It is important to note that this support is temporary, and Synthetix fees on Optimism will be lowered to a level that makes all ecosystem partners competitive with the rest of the market.

Why is the Treasury Council funding this?

The reasoning behind funding this trial is that increased LYRA volumes will directly create trading fee revenue for SNX stakers. Lyra collateralizes its short calls (~80% of trades) with Synthetix and will soon use Synthetix to enable delta hedging. A competitive spread will likely increase volume and benefit stakers.

The results of this trial will be evaluated after a month and will work as a precedent for funding other partners and initiatives. Find out more on Lyra’s blog, or feel free to ask any questions in the Synthetix Discord.