SNXweave Weekly Recap 123

SNXweave -

January 31, 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

  • Key milestones from 2024 draft roadmap:

1. Scaling base volume to $20 million/day
2. Deciding on a new chain to deploy V3 and Perps to
3. Converting governance to be fully on-chain
4. Releasing L1 Perps
5. Beginning the migration of SNX from V2X

  • Spartan Council bridging discussion
  • SIP-355: Add extra views to Spot Markets presentation recap
  • SIP-2052: List CVX on SNX Perps V2 presentation recap
  • SIP-2050: Deprecate sINR Synth presentation recap
  • SIP-2051: Deprecate Perp Markets with 0 Max Market Value presentation recap
  • SCCP-2077: Activate the MMV Risk Control Module presentation recap

Spartan Council and SIP updates

Present at the January 24, 2024 Spartan Council Weekly Project Sync:
Spartan Council: bilby, cyberduck, Jackson, Kain, Millie, ml_sudo, Snax Frens
Core Contributors: Afif, Ana, Cavalier, David, KALEB, Leo, Matt, meb, Mike, Regina, Steve, troy

First up, a draft roadmap for the year was released, and the key milestones include:

  • Scaling base volume to $20 million/day
  • Deciding on a new chain to deploy V3 and Perps to
  • Converting governance to be fully on-chain:

Jackson asked if this was really a priority given that it doesn’t move the dial much for the end user (traders) of the Synthetix product (Perps). Cav replied saying the further decentralization of governance is something that the protocol has been working towards for a while, and continuing to build on that is an important part of the protocol.

  • Releasing L1 Perps:

This has been in progress for a while, and has already been through one audit and is getting ready for a second. This will be a V3 release, which means there will need to be sufficient collateral on V3 on L1, which may require some incentives. The target right now is roughly $100 million of SNX collateral to make this a functional product for the expected user base — which is approximately 20% of the SNX in the V2 system. Releasing Perps on L1 would also require approving wstETH as margin, which has been requested by potential integrators like Ethena.

  • Beginning the migration of SNX from V2X:

The biggest dependency for V2X to V3 migration is the destination chain.

Cav has a SIP in progress to outline who owns each part of the roadmap and how to properly allocate resources to each piece. There was some concern that the CCs would be stretched even thinner with multiple deployments, but Cav thinks the Treasury Council (TC) can help solve some of these issues. Part of the motivation behind releasing this roadmap was to make more clear exactly what the protocol intends to accomplish over the next year, then put the resources in place to make sure it can get done.

After reviewing the roadmap, the SC discussed bridging. Millie voiced support for potential future isolated deployments, but said he would vote no on any bridging integrations. ML_sudo is in favor of interoperability, but is concerned about security. Jackson thinks the reason that Synthetix is hesitant about bridging is because that’s not an area of expertise for the protocol, so the preference should be to work with providers who are experts.

Next up, there were several SIP presentations last week so let’s briefly review each of them:

SIP-355: Add extra views to Spot Markets

  • Proposed by Leo, this SIP will answer integrator and developer needs for data access by adding view functions for configurations and internal calculations
  • The new views add price data, wrapper data, market owner and market skew

SIP-2052: List CVX on SNX Perps V2

  • This SIP proposes listing Convex Finance (CVX) on Synthetix Perps
  • Burt explained that CVX specifically reached out in support of listing this asset, and the CVX community has a lot of active Kwenta users

SIP-2050: Deprecate sINR Synth

  • Kaleb presented the last few SIPs, starting with this one to deprecate the sINR synth, which has very little open interest (140 sUSD worth)
  • Like other deprecated synths, the price would be frozen at the time of implementation and anyone holding the asset would be able to redeem sUSD at the frozen price

SIP-2051: Deprecate Perp Markets with 0 Max Market Value

  • This SIP proposes deprecating 15 perps markets (voted on for delisting in SIP-2047) in 6 months on July 31st, 2024
  • This would remove them from the futures market manager and allow for the oracle to be deprecated
  • Kaleb explained that the 6-month grace period would allow users ample time to close any positions they have open

SCCP-2077: Activate the MMV Risk Control Module

  • This proposes activating the risk control module, which would allow for the reduction of OI to zero for a predetermined list of markets (outlined in the SCCP)
  • This SCCP is the next step for SIP-2048, which proposed the introduction of this mechanism and was approved with 7 votes in favor
  • This mechanism is for emergency use only during periods of unusual market activity that prevent arbitragers from participating
  • The module will be controlled by a gnosis safe, and the endorsed account is a 3 of n multisig including the deployer and the pDAO (which effectively means it will be controlled by pDAO but directed by the interim risk council)
  • This will eventually be the full responsibility of the risk committee but until the risk committee is formed, this process creates a check between the SC (via the interim risk council) and the pDAO
  • Every new market added will need an additional parameter in the configuration SCCP specifying whether or not it is covered under this module
  • Kain asked about the process on how this would be activated

 — Kaleb explained that there are off-chain monitoring systems that would alert the risk council of any issues

 — The deployer would then prepare the transaction to bring the OI on the problem market to zero

 — The risk council would assess the validity of this issue, then authorize the pDAO to execute the transaction

 — The interim risk council would then brief the SC on what happened and what action was taken

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SIP/SCCP status tracker:

SIP-355: Add extra views to Spot Markets, Status: approved

SIP-2052: List CVX on SNX Perps V2, Status: approved

SIP-2050: Deprecate sINR Synth, Status: implemented

SIP-2051: Deprecate Perp Markets with 0 Max Market Value, Status: approved

SCCP-2077: Activate the MMV Risk Control Module, Status: approved