SNXweave Weekly Recap 122

SNXweave -

January 24, 2024

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

  • Perps on Base brought in $500,000 in weekly volume in private beta and is ready to slowly begin scaling!
  • SC asymmetric funding rate discussion: ML questioned how the new funding rate differs from the V2 funding rate — read below for an explanation.
  • Asset delisting SIP discussion: Some Council members had reservations about delisting assets, see below.
  • Grants Council update: GC has been working on the sUSD bridge UI, finishing up review of the Discord burn bot to replace the inflation bot, and has started a rework of the UX/UI on the Watcher Page in prep for V3.
  • Ambassador update: AC has been discussing the upcoming Optimism Grants season (Feb 1-Feb 14), future Spartan Spaces, additional “Project Spotlights” for their Twitter series, and finding new lending protocols on Base to list SNX and sUSD. Matt also created an Optimism Mission Request called “Deliver a Best-in-Class Perp Dex on Optimism” and the Council published their latest Ambassador Governance update on Twitter.

Spartan Council and SIP updates

Present at the January 17, 2024 Spartan Council Weekly Project Sync:
Spartan Council: Adam, bilby, cyberduck, Jackson, Kain, Millie, ml_sudo, and Snax Frens
Core Contributors: Afif, Bex, joey, KALEB, Matt, Mike, Nikita, Steve, sunny, troy

Let’s start with a core system update — Perps on Base brought in $500,000 in weekly volume in private beta and is ready to slowly begin scaling! It will still just be BTC and ETH markets with low limits, but the Council just voted for LP cap increases to $1 million USDC — these expanded limits will allow testing to continue with a larger trader base. And OI increases should follow as soon as more LPs delegate capital. For markets, trades are continuing to happen on Base Mainnet by two integrators, and L1 Perps is being prepared for a second audit and testnet.

In other discussion, the Spartan Council discussed asymmetric funding rates. During their call, ML_sudo had a question about the new funding rate and how it differs from the V2 funding rate. There is currently a SIP in draft for this mechanism. Basically, LP capital can generally move in and out freely, but there are certain situations (i.e. where all of the current collateral is required to back the open positions) where there might be a temporary lock on the collateral backing system.

To disincentivize a perpetual state of locked LP collateral, an addition to the funding rate is introduced when OI reaches the point requiring collateral lock. This also encourages the closing of positions, as well as the delegation of additional capital until OI comes back down below that threshold. It can also be thought of as bonus earnings for LPs during those periods where locking collateral is necessary for system health. This wasn’t as necessary in V2 due to the abundance of collateral to support markets, but will be a critical feature in isolated V3 deployments.

Millie asked whether this rate would be market-specific or if it would apply to all markets (supermarket) when active. Afif said it would apply to the supermarket since it’s a single blended risk curve for LPs. The markets with the highest utilization are likely to be markets with the highest rate sensitivity (BTC and ETH), which would encourage more swift wind down positions.

The Spartan Council also revisited the asset delisting SIP during their meeting last week. Duck brought up the fact that it may not be the best idea to delist assets without a clear path for relisting them on V3. Although there is no data to support this claim, he believes that a good amount of the perps attraction for Synthetix is the assets that are not widely available elsewhere on-chain, and that these assets serve to onboard new users who may choose to stay and trade.

There seemed to be more support amongst the Council for delisting assets for which price data is less reliable (such as tradfi listings), or generally more risky assets. Burt also added that delisting based on OI today might not be the best approach, as some of these assets may develop in popularity later.

Grants Council

Present at the January 4, 2024 Grants Council meeting:
Grants Team: ALEXANDER, Mike, MoneyManDoug, synthquest

In Grants Council updates, the team has started a rework of the UX/UI on the Watcher Page in preparation for V3 (this is about 60% done). They are also continuing work on the sUSD bridge UI that utilizes the native bridge over socket, and are finishing up review of the Discord burn bot that will replace the inflation bot.

Ambassador Council

Present at the January 16, 2024 Ambassador Council meeting:
Ambassadors: GUNBOATs, Kevin, Mastermojo, Matt, Westie

Lastly, the Ambassadors have been discussing the upcoming Optimism Grants season, which starts February 1st and has a submission deadline of February 14th ❤️. Matt also recently created an Optimism Mission Request called “Deliver a Best-in-Class Perp Dex on Optimism,” for which the Ambassadors are seeking input and delegate approval.

The Council is also discussing future Spartan Spaces for this epoch, additional projects for their “Project Spotlight” Twitter series, and finding new lending protocols on Base to list SNX and sUSD. And they just published their latest Ambassador Governance update on Twitter, so make sure you give that a read!

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SIP/SCCP status tracker:

SIP-2047: Begin migrating Perps V2 markets, Status: implemented

SIP-2049: Begin migrating offchain Perps V2 markets, Status: implemented