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SNXweave Weekly Recap 126

SNXweave

Feb 21, 2024 • 4 min read

February 21, 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

SC discussion about on-chain elections — Noah and Mati are working on a roadmap for this SIP.
We should be hearing a more refined version of what that governance end state is expected to look like for the protocol in the next week or so. It will include the updated election module, with cannon as a deployment tool and integrated gnosis safes.
Deprecation of the pDAO will be a big change in this process — this means SC votes will directly deploy protocol upgrades.
The plan is to start small with SCCPs, then eventually graduate to SIPs being deployed this way as well.
Duck brought up deprecating spot synth offerings and suggested some options for unwinding these offerings. Kaleb shared his thoughts in response (see below), and Duck will be drafting a SIP to add a fee for entering sBTC and sETH positions and 0% on the way out.
Ambassador Council update: Matt’s Mission Request proposal was approved by the OP Token house, Mastermojo published another Governance update on the Ambassadors Twitter — see below for more details.

Spartan Council and SIP updates

Present at the February 14, 2024 Spartan Council Weekly Project Sync:
Spartan Council: Adam, bilby, cyberduck, Jackson, Kain, Millie, ml_sudo, Snax Frens
Core Contributors: Afif, Cavalier, David, joey, jz, KALEB, Matt, meb, Mike, Steve, troy

The Spartan Council had a discussion about the SIP to move elections fully on-chain, with Millie highlighting that this is a big vote of confidence from the CCs that the protocol is willing to take that next step of decentralization. Noah and Mati are leading this initiative and working on a more detailed roadmap on this particular item.

In the next week or so we should be hearing a more refined version of what that governance end state is expected to look like for the protocol. It will include the updated election module, with cannon as a deployment tool and integrated gnosis safes. A big change in this process will be the deprecation of the pDAO, which means Spartan Council votes will directly deploy protocol upgrades. The plan is to start small with SCCPs, then eventually graduate to SIPs being deployed this way as well.

In other discussion, Duck brought up deprecating spot synth offerings. Currently, with 30% long debt skew and 2.5% APR, there is no real incentive for new stakers to enter the system. A big part of this is the spot synth offerings, specifically sBTC and sETH, which account for nearly all of that skew but are not productive for the protocol in terms of fee generation.

Duck then suggested some options for unwinding these offerings by either picking a distant date where everyone’s sETH and sBTC are automatically converted to sUSD or by adding a fee on inbound exchanges (i.e. sUSD for one of these synths). There was some consensus that the option for increasing the cost to hold these synths should be explored, which would create some pressure to unwind.

Kaleb highlighted that there are nearly $70 million worth of outstanding spot sETH and sBTC, and that individual holders might be unhappy with this change. Even deprecating sLINK (with roughly $150,000 in outstanding synths) was disruptive for some. Kaleb also brought up the fact that a forced change like this would likely cause peg problems if users were forced to exit millions of dollars of synth positions over a short period of time.

Duck will be drafting a SIP to add a fee for entering sBTC and sETH positions and 0% on the way out. Kaleb mentioned that even this idea might not be a viable solution as it will remove the incentive for arbitragers to keep the curve pools balanced.

Ambassador Council

Present at the February 13, 2024 Ambassador Council meeting:
Ambassadors: GUNBOATs, Kevin, Mastermojo, Matt, Westie

Next up, in Ambassador updates, the team discussed how they were assisting protocols within the ecosystem with their OP Grant and Mission Request drafts/submissions. Matt’s Mission Request proposal for Best in Class perps got approved by the OP Token house — you can see the list of approved missions here. Mojo also recently released another Governance update for the Ambassadors, so be sure to check that out on Twitter! The post talks about:

Optimism Grants Voting Cycle #19 — it has started!
OP Token House call recap:

Mission Requests voting by OP Token House — the vote has ended and Matt’s proposal was approved, as we mentioned before. The Ambassadors urge all ecosystem partners, devs, and community members to look at the approved Mission Request and evaluate if you want to apply and contribute.
Lastly, the post gives a shout out to everyone who delegated OP to the Council — the Ambassadors performed their OP Token House Duties with it, and voted for all of the proposals. Results can be found here:

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SIP/SCCP status tracker:

SIP-360: Synthetix V3 Cross-chain Elections System, Status: draft