February 7, 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.
- CCs are preparing the rewards distributor mechanism for STP-14’s USDC LP incentives
- No major issues have been reported from integrators so it may be time to start directing traders towards Base
- Kwenta is planning to scale up the invite-only testing phase before opening up V3 on Base as the default experience for all Kwenta traders
- The limited use at this point is a user onboarding issue rather than a limitation of what is currently deployed (there is plenty of OI room for traders that is not being used)
- Perps V3 OI caps are now $1 million and trades are happening by 2 integrators. Once Perps V3.1 and V3.2 are shipped, OI caps can be dramatically lifted.
- SC discussed the 2024 roadmap again — they talked about deploying to future chains and creation of SNX app chain
- Other discussion: Duck said as V3 scales on Base there will be less demand for sUSD on V2, which may impact the peg
- SIP-2053: List JUP on SNX Perps V2 presentation recap
Spartan Council and SIP updates
Present at the January 31, 2024 Spartan Council Weekly Project Sync:
Spartan Council: Adam, bilby, cyberduck, Jackson, Kain, Millie, ml_sudo, Snax Frens
Core Contributors: Afif, Cavalier, David, joey, KALEB, Matt, meb, Mike, Nikita, troy
First up, for our work in progress update, 900,000 of the $1 million USDC LP cap has been filled, and the CCs are now preparing the rewards distributor mechanism for STP-14’s USDC LP incentives. No major issues have been reported from integrators so it may be time to start directing traders towards Base. Kwenta is planning to scale up the invite-only testing phase before opening up V3 on Base as the default experience for all Kwenta traders. The TLDR here is basically that the limited use at this point is a user onboarding issue rather than a limitation of what is currently deployed (there is plenty of OI room for traders that is not being used).
As for markets, Perps V3 OI caps are now $1 million and trades are happening by 2 integrators. Once Perps V3.1 and V3.2 are shipped, OI caps can be dramatically lifted.
Next up, the Spartan Council briefly reviewed the roadmap again, which we discussed in last week’s recap. There was further discussion on deploying to future chains and creation of SNX app chain. From an offline conversation with Cav, Kain explained some of the prerequisites for deploying to another chain. The whole point behind the Andromeda release was to conduct experiments that would inform potential future deployments.
The first is whether there is any interest in LPing USDC, and the second is the trading demand for Synthetix contracts backed by that USDC collateral. Kain said the big open question for him is what percentage of active traders are from outside of the Synthetix community — there are the traders who are likely to be less concerned with the chain that Synthetix is deployed on and the collateral backing the system, and more concerned with the quality of the product).
Once the experiments validate whether there is demand for trading, then the Spartan Council and CCs can begin to evaluate what a post SNX collateral Synthetix should look like. App chain development is also contingent on Andromeda experiment data. As far as future experiments, there have been a number of suggestions to deploy to other chains, such as Arbitrum, and possibly experiment with more risky collateral and margin types. Adam cautioned that even in an isolated deployment environment, the Synthetix brand would be tied to all of these deployments and any issues may be optically damaging for the protocol even if LP risk was contained.
In other discussion, Duck brought up the fact that as V3 scales on Base, there will be less demand for sUSD on V2 which may impact the peg. There is a big sUSD arbitrage opportunity from L1 to Optimism that is not being efficiently closed. Kain said he was able to run the cycle a couple of times and estimates the APY was near 40%. The big problem, however, is that it’s not an easy process, and automating it would require a level of sophistication that most sUSD holders do not have. The CCs are developing an interface to help with this and there may need to be additional incentives from the TC to make it worthwhile for smaller sUSD holders.
There was also one SIP presentation last week, SIP-2053 to List Jupiter (JUP) on Perps V2. This token launched on February 1st so Kaleb explained that there was no active trading data at the time of the presentation to support the listing, but he expects it will have the same demand as BONK. This would not go live until the markets are active on centralized exchanges, and this asset will also be added to the Risk Control Module in the SCCP configuration.
Present at the February 1, 2024 Grants Council meeting:
Grants Team: ALEXANDER, es MC, Mike, MoneyManDoug, Synthquest
In Grants Council updates, the team had a meeting last week where they discussed what the future of the GC should look like. They also went over some of their ongoing initiatives, including the sUSD bridge, burn bot, and watcher page. The GC is close to confirming that the native sUSD bridge works on the staking website, and the burn bot has been updated to include all-time SNX burns — you can see weekly/all-time burns in Discord now.
The Watcher page will also soon include totals for open positions, filter tabs for closed and liquidation positions, and historical account total trading history. Once those upgrades are complete, the Council will also be adding a staking tab to view staking information about an address. This is intended to start framing out a one stop shop for V3 (staking and perps trading).
Present at the January 30, 2024 Ambassador Council meeting:
Ambassadors: GUNBOATs, Kevin, Mastermojo, Matt, Westie
Lastly, in Ambassador Council updates, the Ambassadors posted their most recent Project Spotlight on Twitter, where they highlighted dHEDGE, which is a non-custodial asset management protocol where users retain control of their assets while still allowing others to manage the capital. Be sure to check out the spotlight on Twitter!
The team has also been continuing to discuss the upcoming Optimism Grants season that ends February 14th, as well as the recent Optimism Mission Requests that they review as OP delegates. Lastly, they went over Matt’s recent call with Optimism — you can check out the notes to the call here.
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SIP/SCCP status tracker:
STP-14: Incentivize USDC LP on Base Andromeda, Status: draft
SIP-2053: List JUP on SNX Perps V2, Status: draft