SNXweave Weekly Recap 141

SNXweave -

June 12, 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

  • Asynchronous delegation discussion: Cav is concerned that the implementation would add a lot of complexities to an already complex LP system. The current solution would introduce an intent-based system for collateral delegation, which adds a second stage to the process with the primary goal being able to reduce adversarial LP activity. Afif explained that this will also relax some of the price check burdens at LP entries (having stricter price check requirements would substantially increase gas costs). If such a change is going to be made, Kaleb recommends doing it now at the beginning of the V3 deployment.
  • SIP-387: Create a new perps market listing framework for automated listing across all networks
  • presentation recap (see below)
  • SIP-388: Adding Support for EtherFi weETH to Arbitrum V3 LP presentation recap (see below)
  • SIP-389: Adding Support for Yield Tokens from Aave and Lido to Arbitrum V3 LP presentation recap (see below)
  • SIP-390: Minimum Credit Patch — Perps V3 presentation recap (see below)

Spartan Council and SIP updates

Present at the June 5, 2024 Spartan Council Weekly Project Sync:
Spartan Council: Afif, Cavalier, Millie, Snax Frens, snxmaximalists
Core Contributors: Ana, Kaleb, Matt, meb, Mike, troy

There’s not much to update on Base this week, so let’s get right into last week’s meeting. Cav started a discussion about SIP-366 for asynchronous delegation. As a reminder, this proposes adding functionality such that markets can require liquidity providers to first declare an intent to change the amount of collateral delegated and then process it after a configurable delay.

Even though this SIP was approved in February, Cav is concerned that the implementation would add a lot of complexities to an already complex LP system. He acknowledges that it solves a problem worth solving but is wondering if there is an easier solution.

The current solution would introduce an intent-based system for collateral delegation, which adds a second stage to the process with the primary goal being able to reduce adversarial LP activity. Afif added that the reason this solution was chosen was also to relax some of the price check burdens at LP entries (having stricter price check requirements would substantially increase gas costs).

Cav is just concerned that the added complexity may turn away prospective LPs. Kaleb also added that the time to implement such a change would be now — at the beginning of the V3 deployment — rather than waiting until many users, integrators, and LPs are already using V3. More to come here.

There were also several SIP presentations last week, so let’s go over each of them:

SIP-387: Create a new perps market listing framework for automated listing across all networks

  • Presented by Danny, this proposal outlines a framework for automatic perps market listings that bypasses the slew of simple new market listing proposals, based on a strict set of guidelines
  • The SIP would allow the presentation process to be bypassed in the event that an Oracle and centralized exchange perp listing are already available for a new proposed listing
  • The primary motivation is the ability to list markets faster without having to wait for the scheduled weekly SIP call
  • Much of the risk management heavy lifting is done in the SCCP parameter setting anyway, and none of the past 10+ market listing proposals have been flagged for an issue that would have otherwise been missed without a presentation
  • There will still be some lead time between initial proposal and SCCP approval, which should leave ample time for community discussion

SIP-388: Adding Support for EtherFi weETH to Arbitrum V3 LP, and

SIP-389: Adding Support for Yield Tokens from Aave and Lido to Arbitrum V3 LP

  • Also presented by Danny, SIPs 388 and 389 propose the addition of EtherFi weETH, aArbUSDC, aArbWETH, aArbWBTC, and aArbUSDT from Aave and wstETH from Lido as LP collateral on Arbitrum V3 deployment
  • These proposed collateral additions were originally in a single SIP, but EtherFi was separated in case there was a timing conflict with their season 2 points program for integrators
  • The addition of these yield-generating collaterals as LP would allow prospective LPs to provide collateral to back perps V3 while also maintaining exposure to their yield-generating assets
  • As with the other proposed additions of collateral types, the majority of the debt pool will have to be USDC to maintain appropriate levels of exit liquidity for traders
  • Kaleb flagged that the liquidity of each asset on whichever chain they’re being supplied on (Arbitrum) would also limit the LP caps for that particular asset

SIP-390: Minimum Credit Patch — Perps V3

  • This SIP proposes patching the minimum credit calculation by incorporating the escrowed snxUSD margin deposited by traders into a perp market
  • Kaleb explained that this is a minor correction to a calculation of the amount of LP that should be available at any given time to support the OI caps
  • It has not been an issue on Base since the caps are fairly underutilized
  • The calculation update would ensure there is always enough collateral available so that traders could exit with the PnL + their margin whenever they choose to do so
  • This issue was flagged by an auditor

Subscribe to our YOUTUBE

SNXweave Anchor Podcast: https://anchor.fm/snxweave

Follow us on Twitter! @snx_weave

SIP/SCCP status tracker:

SIP-366: Asynchronous Delegation, Status: approved

SIP-387: Create a new perps market listing framework for automated listing across all networks, Status: vote pending

SIP-388: Adding Support for EtherFi weETH to Arbitrum V3 LP, Status: approved

SIP-389: Adding Support for Yield Tokens from Aave and Lido to Arbitrum V3 LP, Status: approved

SIP-390: Minimum Credit Patch — Perps V3, Status: approved