November 2, 2021
The following post contains a recap of news, projects, and important updates from the Spartan Council and Core Contributors, as well as the grantsDAO and ambassadorDAO from last week.
Spartan Council and SIP updates
Present at the October 26, 2021 Spartan Council Weekly Project Sync:
Spartan Council: Afif, BigPenny, bojan, Danijel, jj, KALEB, Michael
Core Contributors: Darius, DG, Rafa
The much-anticipated Wrappr Factory is here! In case you missed it, Avior was released onto L2 late last week. And for those wondering, it will go up on L1 eventually, but having it on L2 is the priority for now. Which assets to wrap is still being decided, but for now the WETH wrapper has been created with a capacity of 72 WETH, with a 5% mint fee and 0.05% burn fee. However, SCCP-143 to raise the L2 ETH wrapper cap to 1,500 ETH and lower minting fees just passed with seven votes in favor so far (the voting period for this SCCP ends in one day).
SCCP-142 to increase L2 inflationary rewards to 75k SNX is also going to be voted on soon, the Council was just waiting for the completion and implementation of the Wrappr Factory before putting this SCCP to a vote. This is due to the risk of not having enough SNX collateral on L1 to support everything that the wrappers have internally. Afif explained it saying that there’s a lot of minted supply from the wrappers on L1, and if a lot of SNX were to be unstaked and moved to L2, then there could be more risk to the L1 debt pool. He also said we probably wouldn’t want to have too much SNX moving over until we have a unified debt pool because we would over-leverage the L1 debt pool. But wrappers will now be able to help a lot with liquidity on L2.
The Atomic Exchange Function should also be finishing up soon, and will go out on the next release, Alkaid. Kaleb and Brett discussed what the volume per block should be for the exchange function, and Kaleb suggested started low at about 500,000 for safety. Brett has also updated the code with everything from Uniswap, and it is currently being prepared for release.
Kwenta’s trading competition ended last week, and it’s possible that they might do a second one soon. As a reminder, the purpose of these competitions was to stress test the parameters, especially the funding rate. jj said that one thing we learned from them was that we need to change the funding rate — it was pretty prohibitive.
To correct this, Afif and Darius have been working together to design a better funding rate model. Afif suggested bringing back next price exchanges, which would create a way to submit an order and have it confirm at the next price update. While this may take slightly longer, it is a great way to prevent frontrunning and lower fees. This model will also help keep funding rates lower for arbitragers, which is great for keeping fees lower. The tentative plan is to therefore add next price exchanges in parallel with atomic exchanges for futures so that regular users and arbitrage traders have access to both mechanisms.
During the meeting, Afif also brought up a couple of new SIPs he’s writing. The first is a proposal he’s working on with ALEXANDER to add a synth for sETHBTC. This is one of the most active markets in crypto, so it’s likely that there will be a lot of demand for this synth.
The other SIP Afif is writing will adjust the fees for synth-to-synth trading by charging fees between non-sUSD pairs as if they are trading through sUSD first. He says this will simplify things and reduce a lot of risk to the system since it will effectively force exchanges to go through sUSD. It also doesn’t sacrifice the UX too much because there isn’t much organic demand for those exotic pairs outside of frontrunning. Kaleb added that it’s almost impossible to model a price curve for every pair combination, so effectively having all exchanges go through sUSD will make things easier because you’ll have the price curve available on different exchanges.
Present at the October 28, 2021 grantsDAO meeting:
grantsDAO Team: ALEXANDER, clem, Mike, rubber^duck
In grantsDAO updates, the full budget for this epoch has been received from the Treasury Council, so the gDAO is now able to move forward with some exciting projects they’re working on.
If you recall from our recap last week where we talked about the Hedging Bot, we discussed how the gDAO has been working on a way to make it more user-friendly. Heroku one-click deployment is ready to go, it just needs to be tested before being released. As a reminder, the grantsDAO commissioned this bot for stakers to be able to automatically hedge their debt on centralized exchanges. And now with the Heroku integration, this bot is going to be much easier to use and will overall be more accessible.
In case you missed it, Teleportr is back up and running after it was incorrectly labeled as a phishing site. Clem says it’s unfortunately still blacklisted from social networks, and that the demand for it has decreased a bit. He is also messaging several websites to whitelist it since it’s still marked as a scam. Kain and the gDAO are keen to decentralize Teleportr and make it a protocol, so Clem will be talking with him to discuss how this can be accomplished.
Tools.Synthetix is one of the grantsDAO’s ongoing initiatives that will organize different tools that directly and indirectly help the Synthetix community in an accessible format. The gDAO says they are waiting on concept design for this site, and then they will release a request for proposal for someone to build it.
A new initiative that the gDAO is working on is a way to do keeper trades for low volume synths. You may have noticed last week that trading on sAAVE was paused due to the circuit breaker being triggered. This synth circuit breaker was initially added in SIP-55 in order to protect the integrity of the system. It does so by detecting large abnormal price shifts in price updates of a synth, then triggering a circuit breaker so that the synth becomes suspended from exchanging and transferring until it is investigated.
However, when a synth that isn’t traded too often exhibits this price move of 25% or more, this wrongly triggers the circuit breaker and it gets paused for trading, possibly resulting in losses for traders. The solution that the gDAO is working on will involve having keepers trade a low-volume synth if it hasn’t been traded for X amount of time, and oracle reports the price with Y delta from the last traded price. rubber^duck and clem are looking into this, and will be writing up a scope for somebody to build it. Check out this discussion in the governance channel in Discord if you’d like to read more about it.
Present at the October 27, 2021 ambassadorDAO meeting:
Ambassadors: andy, MiLLiE
In ambassadorDAO updates, last week the aDAO hosted their first Spartan City Hall with Lyra in the public governance stage channel! If you missed it, be sure to listen to the recording here. The aDAO got to discuss topics such as the advantages of permissionless finance, what led Lyra to choose a DAO-first model, what programs will be coming out of Lyra, the role of governance and the community in the future of Lyra, and much more. These Spartan City Halls are a very exciting new addition to the Ambassador’s agenda, so be sure to tune in for the next one!
Lastly, the aDAO’s Governance Participation rewards are now claimable by all addresses who delegated $UNI. Be sure to claim your rewards if you delegated any $UNI in the Governance Participation Program, and thanks for participating!
SNXweave Podcast: https://anchor.fm/snxweave
SIP/SCCP status tracker:
SIP-182: Wrappr Factory, Status: implemented
SCCP-143: Increase L2 ETH Wrappr Max cap to 1,500 ETH and Lower Minting Fee to 5 bp, Status: approved
SCCP-142: Increase L2 Inflationary Rewards to 75k, Status: SC vote pending
SIP-120: Atomic Exchange Function, Status: approved
SIP-188: Add sETHBTC synth, Status: draft