SNXweave Weekly Recap 117

SNXweave -

November 29, 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

  • SIP-337: Perps V3 presentation recap
  • SIP-348: Enable USDC for Andromeda on Base presentation recap
  • Explainer blog post for the Andromeda release was published yesterday
  • Ambassador Council update: Team discussed potential future integrations/builders, how to support current integrators, and a framework to make sure all projects in the ecosystem know about Optimism Grants/Retroactive funding. Ambassadors also created a Synthetix Ecosystem Public Goods list for Optimism’s RPGF Round 3 where other badgeholders can vote, and are working on an article on how new protocols can leverage V3.

While some of the Councils postponed their meetings last week for Thanksgiving in the US, we still have a quick update for you guys this week on last week’s SIP presentations and Ambassador updates! So let’s get into it:

SIP updates

Participants at the November 21, 2023 SIP presentation:
Spartan Council: Adam, Burt, cyberduck, Kain, Millie, ml_sudo
Core Contributors: Afif, Cavalier, joey, KALEB, Matt, sunny

SIP-337: Perps V3

  • As discussed in previous blog posts, this SIP proposes deploying Perps V2 to Synthetix V3 with a number of feature upgrades and improvements
  • Upgrades include native cross-margining of positions, multi-collateral margin support, revamped liquidations, and improved deterministic settlement. Let’s review what some of these upgrades will entail:

1. Multi-collateral support

  • In Perps V3, all synths that the spot market creates will eventually be enabled as collateral
  • This is done so that it’s easy for the perps market to have liquidity to sell synths when required, and allows it to easily get quotes to determine margin value

2. Liquidations

  • Large positions will be gradually liquidated, one non-sandwichable portion at a time, with a configurable delay between partial liquidations
  • This eliminates the MEV sandwich attack vector, keeping that value with the protocol

3. Improved deterministic settlements

  • Delayed orders in Perps V2 have proven extremely effective in minimizing toxic flow, however the details of the implementation can be improved to produce a more resilient settlement flow
  • In Perps V3, the settlement process ensures that the execution price is the price at commitment time and is executed in the available window

4. Market structure

  • A number of individual Perps markets will be grouped together into a larger “supermarket”
  • This is to ensure all the risk from each market or collateral type is appropriately distributed for LPs backing the supermarket
  • The supermarket will have variables that can be specifically configured for that market
  • This may allow markets to be split up in the future based on risk profile and liquidity

5. Staleness tolerance

  • As we already know, each perps market requires price information
  • From the trading competition, it became clear that the cost of pushing that data on-chain was very high
  • Optionality was added so that price staleness could be made strict for liquidations, for example, and less strict for other transactions
  • This will reduce transaction costs overall by reducing the amount of data being pushed on-chain

SIP-348: Enable USDC for Andromeda on Base

  • This SIP proposes using the V3 spot and wrapper functionality to allow users to deposit USDC for a wrapped version to be used as LP collateral or margin for trading
  • The proposal details all of the V3 configurables for the Perps V3 deployment to Base, including the enabling of USDC as LP collateral
  • The deployment to Base will be a new market with, potentially, a new set of users, so it made sense to launch with USDC support (one of the most widely used stablecoins in DeFi). Selecting a single collateral type also reduces the complexity of the deployment
  • The max market size will be roughly $1 million each for BTC and ETH (a conservative cap to start with, similar to the launch of Perps V2)
  • ML_sudo asked what the process would be for adding new markets — Afif said the strategy would likely be similar to the V2 rollout (start with most liquid trading pairs and low OI caps before gradually adding new markets and increasing caps). He also stressed the importance of continuing to build on the positive reputation that the protocol has developed over the past year since the introduction of Perps
  • There was some general confusion on the council that the SIP seemed to be missing key details about the deployment that had been discussed previously (namely the fee sharing)
  • Cav clarified that there are a number of SIPs that will be part of the Andromeda deployment (SIP-345: SNX buyback and burn and SIP-346: Integrator Fee share included)
  • Kain suggested listing those as dependencies in this SIP, so Cav is updating it to reflect all dependencies

Matt also just announced an explainer blog post for the Andromeda release yesterday, which can be found here. The post discusses some background on Perps V2, what upgrades Perps V3 will bring, the essence of testing in Andromeda, isolation of the Andromeda release on Base, how success will be measured, what to expect for the initial rollout, the Andromeda experience from an LP vs. trader perspective, and the future of Synthetix with Andromeda. Be sure to give the post a read!

Ambassador Council

Present at the November 21, 2023 Ambassador Council meeting:
Ambassadors: GUNBOATs, Kevin, Mastermojo, Matt, Westie

Lastly, for a quick Ambassador Council update, the team discussed potential future integrations and builders, as well as ways to engage and support current integrators. They then discussed a framework to make sure all projects in the ecosystem know about Optimism Grants/Retroactive funding.

The Ambassadors are also in the process of brainstorming an article on how new protocols can leverage V3, as well as planning out future Spartan Spaces. Lastly, the Council created a Synthetix Ecosystem Public Goods list for Optimism’s RPGF Round 3 where other badgeholders can vote. The projects on their list have put building first and have significantly contributed to the growth of the ecosystem by onboarding developers, projects, LPs, and traders.

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SIP/SCCP status tracker:

SIP-337: Perps V3, Status: draft

SIP-348: Enable USDC for Andromeda on Base, Status: draft

SIP-345: SNX buyback and burn, Status: draft

SIP-346: Integrator Fee share, Status: approved