SNXweave Weekly Recap 146

SNXweave -

July 24, 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

  • L1 Migration to V3: Legacy markets were launched on L1 last week! The Treasury Council was the first account to migrate and will continue to back sUSD liquidity on V3, as well as the new L1 Perps Market, which will help scale the new product.
  • Second phase: Migration will be open for all stakers, which will change how liquidation happens (see below for details). There will also be a suspension of sUSD minting and staking on V2X on Ethereum to encourage stakers to move over to V3, the bridge to move debt from V2X on L1 to L2 will be suspended, and there will be a bridge available to swap sUSD for the new snxUSD.
  • SIP-398: Chainlink Data Streams for Synthetix V3 on Arbitrum presentation recap (see below)

Spartan Council and SIP updates

Present at the July 17, 2024 Spartan Council Weekly Project Sync:
Spartan Council: Afif, cyberduck, Jackson, Millie, ml_sudo, Snax Frens, snxmaximalists
Core Contributors: 0xMithrandir, 0xrobin, Fred, jz, Kaleb, meb, Mike, pixelperfect, troy

Last week the team launched the legacy markets on L1! This means there is now a new market connected to V2X (similar to the Spartan Council market on Base) that will hold the Treasury Council position. The TC was the first account to migrate and will continue to back sUSD liquidity on V3, as well as the new L1 Perps Market, which will help scale the new product.

In the second phase, likely ready in the next two weeks, migration will be open for all stakers. This will change how liquidation happens — let’s get into how:

  • Currently there is a 6-hour waiting period after positions are flagged for liquidation
  • In the new system, liquidations will happen immediately and are socialized to all V3 staking positions (V2X will no longer be a part of the socialized liquidation pool)
  • Self-liquidation will no longer be available in V3
  • Liquidation rewards will no longer be escrowed either — instead, stakers who receive those rewards will be able to sell the SNX or use it to strengthen their c-ratio

Also in the second stage, there will be a suspension of sUSD minting and staking on V2X on Ethereum to encourage stakers to move over to V3. The bridge to move debt from V2X on L1 to L2 will also be suspended, and there will be a bridge available to swap sUSD for the new snxUSD.

Next, there was a SIP presentation last week: SIP-398, presented by Raoul from Chainlink, which proposes integrating Chainlink Data Streams into the Synthetix V3 deployment on Arbitrum to bolster the protocol’s security and performance. Let’s recap the presentation:

SIP-398: Chainlink Data Streams for Synthetix V3 on Arbitrum

  • Raoul explained that V3 was designed to be oracle agnostic and this SIP proposes adding the option for integrators to choose between Chainlink or Pyth
  • He suggested a test phase where Synthetix would integrate the Chainlink oracle on 10 markets on Arbitrum to further assess performance compared to alternative providers
  • Chainlink Data Streams boasts the following attributes:
    • Reliability: Data Streams is secured by the same decentralized infrastructure and professional node operators that secures most of the TVL in DeFi
    • Accuracy: Data Streams tracks markets extremely closely, usually within half a BIP, and this is verified through Chainlink data as well as by third parties
    • Security: Due to the commit reveal architecture, the price is not revealed until the trade is committed to. This architecture also allows for hypothetical trade execution with bid/ask data which protects the protocol from frontrunning
    • Low Latency: Data from centralized exchanges is translated to Chainlink pricing very quickly (usually within 1 second, compared to competitors’ 2–4 seconds)
  • Chainlink has also offered to take on a great deal of the integration work on their end, which would reduce the integration burden for Synthetix CCs
  • The cost (paid to Chainlink) will be 1.5% of the fees generated
    •  This will likely be pushed to end users in the form of higher transaction costs to use these low latency oracles
  • Chainlink is also working towards being able to spin up price feeds faster than in the past (hopefully, within 24 hours of a token launch)
  • They will be providing full API access for keepers in the Synthetix ecosystem
  • Burt brought up an issue regarding use of multiple oracles on the same network
    • Raoul confirmed that there wouldn’t be anything technically prohibiting integrators from using multiple oracles on a single network
    • Burt flagged that with the differences in price reports, use of different oracles would likely require different market listings, which wouldn’t be ideal from a UX perspective

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SIP/SCCP status tracker:

SIP-398: Chainlink Data Streams For Synthetix V3 on Arbitrum, Status: draft