SNXweave Weekly Recap 143

June 26, 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

• Arbitrum LP and incentives are live: see below for details regarding the Arbitrum LTIP distribution plan (12 week program, distributing 2 million $ARB until September 3rd)
• Base update: LP appears to be stabilizing at $25 million, yield-bearing collateral like aUSDC may help attract LPs once it’s live
• L1 Perps SIP: being finalized for presentation, in final audit stage, could be live as soon as next month
• On-chain governance: SIP-360 will ensure the next election cycle will take place using V3 voting power, SIP-341 will add an address permission only to execute SCCPs for the initial integration, and another SIP will propose a safe module to integrate the election system NFTs for use with a ‘configurer’ Safe
• SIP-393: Launch Degenthetix on Base 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

Arbitrum LP and incentives are live! Ethena assets should be coming in the next week, and LP is already near $1 million. A blog post was published yesterday detailing the Arbitrum LTIP distribution plan — approved by ARB governance, this 12-week program aims to attract liquidity providers, stablecoin liquidity, and Perps trading activity, distributing 2 million $ARB until September 3rd. Check out the post to learn how to participate!

The LTIP grant of 2,000,000 ARB will be distributed as follows:

• 1,000,000 ARB for LP incentives
• 900,000 ARB for trading fee rebates (capped at 75% of trading fees paid on Arbitrum)
• 100,000 ARB for stablecoin liquidity

As for Base, LP appears to be stabilizing at $25 million, but not ramping much further. Yield-bearing collateral like aUSDC may help attract LPs once it’s live.

The SIP to launch and scale L1 Perps is still being finalized for a presentation, but it is in the final audit stage and could be live as soon as next month. The proposals to bring governance on-chain are also coming along well — the next cycle of elections will take place using V3 voting power thanks to SIP-360, for the modular cross-chain election system. SIP-341 will also add an address permission only to execute SCCPs for the initial integration with the election system. And another SIP will propose a safe module that integrates election system NFTs for use with a ‘configurer’ Safe.

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

SIP-393: Launch Degenthetix on Base

• Presented by Burt, this SIP proposes adding a new supermarket/pool on V3 on Base to experiment with long-tail/experimental assets for perps trading
• Given the nature of Synthetix V3’s design, Burt explained that we have the ability to create more experimental Pools and Markets with completely separate risk profiles and exposure to the primary Spartan Pool
• The V3 design offers an interesting way to test the waters in expanded Perps offerings while completely siloing risk, and this SIP aims to take advantage of that functionality
• SIP-393 proposes an initial set of listings including MAGA, AERO, MAGA/BODEN ratio, PRIME, BODEN, and VELO
• OI caps will be set in an SCCP later and will be dependent on a stable price feed being available
• There was some discussion on whether the feed should be specified in the SIP
  • All of the proposed listings, with the exception of VELO, currently have a feed
  • Kaleb suggested adding language to the SIP saying that listing is contingent upon a price feed being available
• Burt mentioned, from an integrator perspective, that while the exact roadmap for implementation is not clear yet, he believes it is okay to vote on the SIP now while the details are hashed out
• The likely plan will be to get a short-term solution spun up relatively quickly (within weeks) with the downside being some UX headaches for users while a cleaner long-term solution is being developed
• Kaleb added that he is generally concerned about the possibility for manipulation with these low cap markets but thinks strict OI caps can help avoid some of those issues
• Cav pointed out that the protocol also has the asymmetric funding mechanism as another lever at its disposal, which would allow the protocol to test whether these types of listings could generate enough fees to entice LPs
• Kaleb responded saying it’s important to strike the right balance — too restrictive and traders will not use the product, too relaxed and there will not be sufficient incentive to attract LPs
• Voting was opened for this SIP, and there are 5 votes in favor so far

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SIP/SCCP status tracker:

SIP-393: Launch Degenthetix on Base, Status: draft

SIP-360: Synthetix V3 Cross-Chain Elections System, Status: approved

SIP-341: Add Configurer Address, Status: approved