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SNXweave Weekly Recap 108

SNXweave

27 Sep 2023 • 6 min read

September 27, 2023

The following post contains a recap of news, projects, and important updates from the Spartan Council and Core Contributors, as well as the Grants Council and Ambassador Council from last week.

👉TLDR

V3: nomenclature discussion
Perps V3: Noah gave an overview of ERC-7412, explaining that a standardized pattern for retrieving oracle data that can be used throughout the protocol is needed for pulling price data on-chain
Perps V3 Base Testnet Competition: Starting October 2nd! Read below for prize details & see blog post for more info
Fee sharing: some integrators have expressed interest in meeting with the SC to discuss fee sharing (both with partners and Base LPs) — mainly would like to discuss how fees will be allocated in an environment with a new collateral type (ETH) being siloed exclusively on base
SIP-340: Add Trusted Multicall Forwarder presentation recap
SCCP-307: Thales — Create Pool and register Market presentation recap
SIP-2034: Deprecation of pDAO and Introduction of Risk Council presentation recap
Grants Council update: Supplying NFTs for testnet competition prizes, Jakub is working with GC on the NFT website to get app hosted, Sunny is running a test for a rebalance scenario for Overtime Markets, team discussed a large grant request that they received and ultimately voted against, ENS names have been integrated into the Watcher Page and the Council is now working on adding the Perps landing page and the V3 stats page — still looking for a frontend dev for this, and the governance guide doc is almost finished

Spartan Council and SIP updates

Present at the September 20, 2023 Spartan Council Weekly Project Sync:
Spartan Council: Burt, Cyberduck, Genefaesius.eth (Gene), Jackson, Millie, and ML_sudo
Core Contributors: Afif, Cavalier, Jakub, KALEB, Mike, noah, Noisekit, troy

First up, let’s talk nomenclature — specifically for V3 synths. SIP-323 to adopt the “s” prefix for Synthetix V3 asset tickers has already been voted on and approved, but some concerns were raised at last week’s meeting regarding any notifications to other protocols that may be required to ensure a smooth transition for this.

The main priority now is getting the Base deployment rolled out for the Perps V3 testnet competition, including the required ERC-7412 implementation for integrators. And speaking of ERC-7412, Noah gave an overview for the team last week. Basically, a standardized pattern for retrieving oracle data that can be used throughout the protocol is needed for pulling price data on-chain. R&D is in progress for use of this functionality with cross-chain synthesis as well.

The ERC allows a standardized error message to be generated (and used by any application) if data is attempting to be read for a specified contract and is not returning a value. The error message can then be used to automatically create a multi-call that provides that oracle data and verifies it. From an end user UX perspective, this is still accomplished within a familiar transaction interface. One of the biggest challenges was reliably generating the multi-call, but the CCs think they’ve developed a good solution for this. Practically speaking, this will allow all Synthetix products to be deployed without any dependencies on push oracles.

But speaking of the testnet competition…the launch date was announced yesterday!! It will start on October 2nd on Base Testnet, and the winners will be selected based on their trading performance, with the highest returns taking the largest rewards:

1st place: $5,000 SNX + 5 Kwenta tokens
2nd place: $2,500 SNX + 4 Kwenta tokens
3rd place: $1,000 SNX + 3 Kwenta tokens
4th place: $500 SNX + 2 Kwenta tokens
5th place: $500 SNX + 1 Kwenta tokens
6th-10th place: $500 SNX

So be sure to check out the blog post about the trading competition to read more details and learn how to participate!

In other discussion, Burt brought up the fact that some integrators have expressed interest in meeting with the Spartan Council to discuss fee sharing (both with partners and Base LPs). The major point they would like to discuss is how fees will be allocated in an environment with a new collateral type (ETH) being siloed exclusively on base. This potentially has a material impact on how liquidity will be allocated across deployments and there would need to be sufficient incentivization to attract ETH LPs.

Afif explained that this will likely be an iterative process and the CCs/SC should expect to have to monitor the cost benefit of these programs and adjust accordingly. Base is the perfect test case for this, as any value generated there would be net positive for the protocol and not detract at all from current SNX LPs. ETH as collateral on Base is also far more preferable to fragmenting current SNX liquidity across deployments.

Next up, there were a few SIP presentations last week, so let’s briefly review them:

SIP-340: Add Trusted Multicall Forwarder

This SIP would be the multicall solution that we previously mentioned in the ERC-7412 overview, and would therefore be a prerequisite for its implementation
There is currently an EIP in review that would allow users to convert their EOA (Externally Owned Accounts) into smart contract wallets capable of executing multicalls. This requires manual input from users, however, so this SIP provides a workaround for EOA compatibility in the meantime
There is an existing ERC standard that requires a protocol change to support trusted multicallers
This proposes adding support for the standard for gasless transactions and adding multicall functionality to that as the most efficient way to accomplish both objectives
Noah explained that the benefit here is being able to provide the option for gasless transactions for those who want it, while being able to deploy the system to use any price feeds available and eventually implement cross-chain pool synthesis with the same pattern

SCCP-307: Thales — Create Pool and register Market

This SCCP was presented by Cyberduck and would create a Thales Pool and register the Thales Market on Synthetix V3, enabling SNX LPs to gain exposure to Thales and Overtime AMMs and their respective yields
Users would delegate SNX, sUSD will be minted and sent to AMMs to back trading activity, and yield or loss would be distributed back to LPs
There will be a minimum delegation time of 2 weeks to avoid frontrunning, and there will be an automated keeper rebalancing the accounting after every week-long epoch
There will also be a minimum credit parameter which would cap total withdrawals (and maintain a base level of liquidity provided to Thales AMMs)
Prior to permissionless pool creation, all new pools require SCCP approval by the SC
This presentation served as a way to get initial feedback before Thales begins work on implementation

SIP-2034: Deprecation of pDAO and Introduction of Risk Council

Written by Kain, this SIP proposes to deprecate the current pDAO (protocolDAO) and replace it with a more transparent and accountable governing body, the Risk Council
As it currently stands, the pDAO (an unelected body) maintains full control over protocol upgrades
The motivation behind this SIP is to bring control of that body back to the community
This new, elected body would control protocol releases and ensure deployed contracts are not malicious or broken
There are still some technical details that need to be worked out in terms of how this is achieved, including possible veto and override powers
Some concerns were brought up around the technical competency required for this role, as well as the possibility that this adds a governance body that is in direct competition with the SC
Kain highlighted that we already have a competing body that is not directly accountable to the community (an issue this SIP aims to resolve)
Cyberduck suggested adding a community vote backstop as a layer of security if the SC believes that the Risk Council is not acting in the interests of the community
Kain said the existing emergency election mechanisms allow for resolutions of these issues by getting community governance input without a direct token holder vote
Mandate for the Risk Council would be strictly technical and risk assessment focused, and would not include voting on protocol changes, but rather whether those changes are technically/financially sound and ready for deployment
There was some agreement that there would have to be some dissolution mechanism (controlled by the SC) if the Risk Council is not doing their job adequately
This is a meta-governance SIP and is still a work in progress

Grants Council

Present at the September 21, 2023 Grants Council meeting:
Grants Team: ALEXANDER, CT, MoneyManDoug, Sunny, synthquest

Next up, in Grants Council updates, the team has been working to help with the Perps V3 testnet competition and will be providing exclusive NFTs to winners! And speaking of NFTs, Jakub is working on the website for the GC to help get the app hosted sooooon.

While CT picks the NFTs for the trading comp winners, Sunny has been assigned to run a test for a rebalance scenario for Overtime Markets and Alex is looking into getting APIs from centralized exchanges.

In addition to their individual tasks, the team also discussed a large grant request that they received and ultimately voted against (4/5 NO votes) — Doug will be providing a write-up for this soon. Next, for the Watcher page, the ENS names have been integrated and the Council is now working on adding the Perps landing page and the V3 stats page. They are currently still looking for a frontend dev for this. The team is also getting really close to finishing the governance guide doc!

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SIP/SCCP status tracker:

SIP-323: Adopt “s” prefix for Synthetix V3 asset tickers, Status: approved

SIP-340: Add Trusted Multicall Forwarder, Status: approved

SCCP-307: Thales — Create Pool and register Market, Status: draft

SIP-2034: Deprecation of pDAO and Introduction of Risk Council, Status: draft