SNXweave Weekly Recap 148

August 7, 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

• Multicollateral margin: Expected to go live this week — first deployment will be to Arbitrum with zero caps. Caps will be raised when integrators are ready. Once it’s working with the front ends on Arbitrum, it can be pushed to Base as well.
• L1 Perps: Audit is 95% complete and should be released to testnet soon; Mainnet release to follow.
• Synthetix Perps launch on Arbitrum: USDx will be the native stablecoin for users on Arbitrum.
  •  For depositors (LPs): USDx can be borrowed against collateral that is deposited into Synthetix. LPs can then gain additional liquidity while earning LP rewards from trading fees and incentives.
  • For traders: USDx will be the first collateral type supported to use for perps trading on Arbitrum.
• How USDx is supported:
  •  Collateral backing: Users who generate USDx can back it with approved collateral types like USDC, USDe, ARB, ETH, and others.
  •  Underwriting Synthetix Perps: The same collateral supports Synthetix Perps by providing the necessary liquidity for the derivatives market.
• USDx explainer article TLDR: Deposit collateral on the V3 liquidity app, borrow USDx against your collateral at 0% rates, and use USDx to trade on Synthetix Perps once it’s launched on Arbitrum. Alternatively, you can also deposit your USDx in liquidity pools on Curve and Ramses to earn additional incentives and 30x sats with Ethena.
• SIP-399: Add Dynamic UX Fee to Support Gasless Transactions presentation overview (see below for recap)
• SIP-400: Fix for underflow error when offchain price timestamp is bigger than current block timestamp presentation overview (see below for recap)
• SIP-401: Risk Council Formation presentation overview (see below for recap)

Spartan Council and SIP updates

Present at the July 31, 2024 Spartan Council Weekly Project Sync:
Spartan Council: cyberduck, fifa, Millie, ml_sudo, Snax Frens, snxmaximalists
Core Contributors: 0xrobin, Fred, Kaleb, Matt, meb, Steve, troy

Multicollateral margin is expected to go live this week — the first deployment will be to Arbitrum with zero caps. When integrators are ready, the caps will be raised. And once it’s working with the front ends on Arbitrum, it can be pushed to Base as well.

For L1 Perps, the audit is 95% complete and should be released to testnet soon with a Mainnet release following shortly after.

Next, in preparation for the launch of Synthetix Perps on Arbitrum, Synthetix released an explainer article last week on the new stablecoin on Arbitrum — USDx. This is designed to serve as the native stablecoin for users on Arbitrum, backed by crypto assets. For depositors (LPs), USDx can be borrowed against collateral that is deposited into Synthetix. LPs can then gain additional liquidity while earning LP rewards from trading fees and incentives. For traders, USDx will be the first collateral type supported to use for perps trading on Arbitrum.

USDx is supported by collateral backing and underwriting Synthetix Perps:

• Collateral backing: Users who generate USDx can back it with approved collateral types like USDC, USDe, ARB, ETH, and others. This collateral basket ensures the stability and value of USDx, maintaining its peg.
• Underwriting Synthetix Perps: The same collateral supports Synthetix Perps by providing the necessary liquidity for the derivatives market.

TLDR for the explainer article, you can deposit collateral on the V3 liquidity app, borrow USDx against your collateral at 0% rates, and use USDx to trade on Synthetix Perps once it’s launched on Arbitrum. Alternatively, you can also deposit your USDx into liquidity pools on Curve and Ramses to earn additional incentives and 30x sats with Ethena.

Check out the article here for additional information and to read more about generating USDx, 0% interest borrows, and providing liquidity with USDx.

Next up, there were a few SIP presentations last week, so let’s review them:

SIP-399: Add Dynamic UX Fee to Support Gasless Transactions

• Presented by Burt, this SIP proposes adding a flexible additive integrator fee to all perps instances
• This fee would be assessed to margin accounts and would allow users to pay their gas fees without having to maintain an ETH balance in their wallet
• The goal here is to improve the user experience, which should in turn make the onboarding process from centralized exchanges easier
• During the presentation, someone in the chat brought up the fact that the gas is only about $1,000/month
• Millie suggested approaching the Treasury Council to see if they can subsidize gas costs, if Kwenta were to offer gassless trading, rather than going through a complex SIP implementation
• At the moment, there have been some minor UX issues on Base in one-click trading because they require users to have an ETH balance
• Kaleb also mentioned that once multicollateral margin is launched, there will be restrictions on margin withdrawal that would lock withdrawal as soon as this fee is applied

SIP-400: Fix for underflow error when offchain price timestamp is bigger than current block timestamp

• This SIP was proposed by Noisekit as a bug fix in the Staleness Circuit Breaker node
• The bug currently results in an underflow error when off-chain price update timestamps exceed current block timestamps
• Kaleb presented the proposal for Noisekit, explaining that the issue was highlighted on Arbitrum due to the speed on the blockchain

SIP-401: Risk Council Formation

• ML_sudo presented this SIP, which is the third proposal for the formation of a Risk Council to replace the pDAO
• The primary difference in this proposal is the outsourcing of the parameter setting and risk management to a third party — ML and Cav met with several risk management providers at EthCC to discuss potential solutions
• The Risk Council would still be responsible for overseeing code integrity and queuing/voting on protocol upgrades
• This council would also be hand selected by the Spartan Council (rather than a token holder vote), and the SC would maintain the ability to unilaterally replace the Risk Council at any time
• The SIP is still a work in progress and ML explained that this presentation was scheduled primarily to receive community and SC feedback
• Specifics that still need to be ironed out for the SIP include:
  • Implementation details: Step by step execution details from SIP approval to deployment — there would need to be some procedural guidance on how this Council would serve its collaborative function with the SC.
  • Selection process: How will these Councilors be selected by the SC? Will there be a vote amongst the SC? If so, does it happen every epoch? What are the tiebreakers? Etc.
  • Budget details: How many Risk Councilors should there be and how much will they be paid?
• Lastly, there was some discussion about renaming this body under this iteration of the Risk Council since all of the risk management functions would be outsourced and it would not be a community-elected entity (therefore “council” would not be an appropriate name)

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SIP/SCCP status tracker:

SIP-383: Multi-Collateral Margin Support — Perps V3, Status: approved

SIP-399: Add Dynamic UX Fee to Support Gasless Transactions, Status: draft

SIP-400: Fix for underflow error when offchain price timestamp is bigger than current block timestamp, Status: draft

SIP-401: Risk Council Formation, Status: draft