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SNXweave Weekly Recap 139

SNXweave

29 May 2024 • 5 min read

May 29, 2024

The following post contains a recap of news, projects, and important updates from the Spartan Council, Core Contributors, and Ambassador Council from last week.

👉TLDR

Base update: Currently ~$40 million in daily perps volume, $1.25 billion in cumulative volume, $22 million in LP-backed collateral, and over 50,000 SNX bought back and burned. BTC and ETH OI caps are at $15 million.
Migration from L1 SNX to V3: Expected to be ready within the next couple of weeks
Launch and scale on Arbitrum: The LP deposit and incentives are set to begin in June, Millie will be writing a SCCP to remove DAI as an available collateral type for LPs, and there will be a SIP drafted to lay out the process for fee sharing and distribution.
SIP to bring elections on chain: This is in audit and is ready for a presentation. CCs are working on crosschain messages using Wormhole for the implementation of the modular cross-chain election system SIP, and the testing phase will start this week.
SIP-384: Synthetix OP SNX Appchain presentation recap
Ambassador Council update: The team has been discussing Optimism’s Retro Funding Round 4, which has officially begun. The Council has begun their campaign of reaching out to SNX Ecosystem Protocols to make sure they understand the criteria and application process.
OP Retro Funding Round 4: The Optimism Collective is allocating 10 million $OP to reward Superchain builders, see key dates below. Application for this round is below, as well as eligibility criteria, Optimism Governance calendar, and a link to a recent video call with Matt and other on-chain builders.

Spartan Council and SIP updates

Present at the May 22, 2024 Spartan Council Weekly Project Sync:
Spartan Council: Cavalier, cyberduck, Jackson, Millie, ml_sudo, Snax Frens, snxmaximalists
Core Contributors: Ana, Kaleb, jz, Matt, meb, Steve, troy

For a quick Base update, there is currently about $40 million in daily perps volume, $1.25 billion in cumulative volume, $22 million in LP-backed collateral, and over 50,000 SNX bought back and burned. The goal is still to get to $100 million in daily volume and sustain over $20 million in LP-backed collateral, so incentives are continuing and yield-bearing LP collateral options are also being added to help reach these milestones.

The BTC and ETH OI caps are at $15 million. As previously mentioned, OI caps are limited by available LP collateral and are currently the highest they can be without additional LPs. Though the capacity is there, the utilization of available OI by traders is relatively low.

Next, the migration from L1 SNX to V3 is expected to be ready within the next couple of weeks. The SIP for the legacy market is ready for release and the synth deprecation SIP is reaching a steady state.

The testnet release for the launch and scale of L1 Perps is also coming soon, and the SIP for this is being finalized for a presentation.

As for the launch and scale on Arbitrum, the LP deposit and incentives are set to begin in June. The SIP for this deployment is being updated with bigger LP caps and a renamed stablecoin. Depending on how fast the LP scales, the hope is that a Perps market could be launched on Arbitrum within a couple weeks of the deployment.

The initial SIP presentation for this lists DAI as an available collateral type for LPs, but Millie suggested removing it since it only detracts from the other collateral types and isn’t particularly popular on Arbitrum. He will be writing the SCCP to remove it.

Duck also called out the fact that there is currently no written plan for how Arbitrum fees will be distributed. By default, they would all go to LPs. But one of the suggestions, for the SNX staker portion, was to send that portion of the fee to Base to be included in the buyback and burn that is happening now. There will be a SIP drafted to lay out the process for fee sharing and distribution.

Next, the SIP to bring elections on chain is in audit and is ready for a presentation. Some CCs are working on crosschain messages using Wormhole for the implementation of the modular cross-chain election system SIP, and the testing phase will start this week.

There was also a SIP presentation last week, so let’s go over it:

SIP-384: Synthetix OP SNX Appchain

Presented by Jackson, this SIP proposes creating an App-Chain for Synthetix called Synth Superchain with Optimism, the Layer 2 rollup chosen as the base for Synthetix Superchain
The proposal would make Synth Chain the home of the central Synthetix system, with other chains becoming satellites, and would use cross-chain messaging for synchronization
Many Synthetix integrators are already running on OP Mainnet, and since this Synth Chain would be built on the OP stack, the transition would be fairly painless
Lyra has already done this (since January) and they have been able to significantly improve user experience by offering gasless transactions, liquidity deposits from other chains, and more
Jackson explained that this new Appchain would also bring the product closer to what centralized exchanges are able to offer
Millie is concerned that it might be a bit early and that the technology might not be ready for primetime yet
He thinks a better approach would be to let all the kinks work themselves out over the next 2 years and then start exploring ways it could be beneficial to the protocol (like by putting together what emerges as the best solutions)
Gene and Duck chimed in agreeing that it should be explored long-term, but that the technology is likely not in a place where it would be useful for Synthetix right now
Cav brought up that while he doesn’t see much benefit in moving to an SNX chain for trading, having it as a single governance hub where all the fees from different deployments are collected and one that is also possibly home to SNX staking might be valuable

Ambassador Council

Present at the May 22, 2024 Ambassador Council meeting:
Ambassadors: dsacks, GUNBOATs, Mastermojo, Matt, Westie

In Ambassador updates, the team has been discussing Optimism’s Retro Funding Round 4, which has officially begun. The Council has begun their campaign of reaching out to SNX Ecosystem Protocols to make sure they understand the criteria and application process. During this round, the Optimism Collective is allocating 10 million $OP to reward Superchain builders. The Collective decided to dedicate this round specifically to on-chain builders in order to:

1. Incentivize contributor growth and network activity

2. Be more inclusive towards longtail contributors

3. Build upon the significant growth in developer activities since Round 3

Some key dates related to Round 4 that the Ambassadors want everyone to be on the lookout for are:

Sign up start date: May 23rd
Sign up end date: June 6th
Application Review Process: June 6th — June 18th
Voting: June 23rd — July 8th
Results & Grant delivery: July 15th

The application for this round of RetroFunding can be found here. To read more, check out the Optimism article with full details regarding Retro Funding Round 4, as well as a list of eligibility criteria, which aim to strike a balance between broad inclusivity and sufficient requirements to allow for an operationally-viable funding round:

Be sure to also keep an eye on Optimism’s Governance calendar, and check out this video call that Matt joined with other on-chain builders to discuss Round 4.

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SIP/SCCP status tracker:

SIP-384: Synthetix OP SNX Appchain, Status: approved