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SNXweave Weekly Recap 17

SNXweave Weekly Recap 17

December 7, 2021

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

Spartan Council and SIP updates

Present at the November 30, 2021 Spartan Council Weekly Project Sync:
Spartan Council: Afif, BigPenny, bojan, Danijel, jj, Kain, KALEB
Core Contributors: Rafa

First and foremost, another election is upon us! SNXweave will once again be broadcasting Spartan Council panels on our Podcast to hear from the Spartan Council incumbents and candidates, and discuss questions posed by the community. If you plan to run for Spartan Council this epoch and would like to participate in the panel, please have your nomination in BEFORE tomorrow at 22:00 UTC, and tag ProofOfCake in the spartan-council-nominations channel in the Synthetix Discord. We’re all looking forward to another exciting election period!

In case you missed it, the LUSD/sUSD wrappr has been added to L1, along with some parameter changes. This introduced an LUSD Wrappr that mints sUSD for each LUSD deposited, with no fee. The burn fee on ETH has also been lowered to zero and the cap decreased, thereby incentivizing an unwind of the sETH wrappr. SCCP-153 was also implemented, raising the cap on atomic swaps per block to 1 million sUSD. The cap will be raised even further in the near future to accommodate for larger trades without fee reclamation delay.

The Atria release also went out a few days ago, on which SIP-192 was implemented to fix the error where fees from the Wrappr Factory are double-counted. This led to stakers claiming a higher amount than they should have been able to, resulting in a loss of funds in the fee payment address. Stakers are not able to claim when the fee address lacks the necessary funds, therefore this SIP repaid the missing funds — roughly $257,000 — back to the Synthetix fee address on L2 in order to make up for the shortfall in fees and allow stakers to continue claiming for the rest of the fee period.

Last week we had two SIP presentations — SIP-188 to add a sETHBTC synth and SIP-180 for Aelin Protocol.

SIP-188, presented by Afif, will list a synth that tracks and mirrors the ETH:BTC price ratio on L1. $ETHBTC is one of the most traded pairs in crypto markets, so this synth will give users one-click exposure to pseudo-delta neutral exposure to ETH’s upside. The only difference in functionality of this synth will be that it trades at the ratio of prices from multiple Chainlink feeds — ETH:USD and BTC:USD, or inverse of BTC:ETH.

Afif explained that one possible risk to be aware of is if we ever had an inverse of this synth (so sBTCETH), you would theoretically be able to buy the two of them together and make a risk-free profit from the protocol. For this reason, there will not be an inverse to this synth.

Kaleb asked if it’s worth exploring adding this synth to atomic. Afif said we probably would be able to, since the wrapped BTC/wrapped ETH pool on Uniswap is pretty liquid. But he added that it might not be worth it if the risk is too big or if we wouldn’t be able to have enough volume on it in atomics. Kaleb also asked what the fees will be on this synth, since ETH is 25 basis points and BTC is 30. Afif said they were thinking of making it the higher of the two — so 30 basis points. This SIP was voted on and approved with 7 Council members voting in favor and none against.

Next, SIP-180, presented by Alex Ape and Kain, proposes the creation of Aelin Protocol. As a reminder, Aelin is an open and permissionless set of factory contracts that enables anyone to instantiate a pool of capital that can be used to source deals within the Ethereum ecosystem. The community got to hear a lot about Aelin from Alex and Kain a couple of weeks ago during the Spartan City Hall that the aDAO hosted with them. They really dove into some important technical aspects of Aelin and answered some great questions during the City Hall. Definitely be sure to check out the recording if you missed it, or check out our blog post from last week for a summarized recap of the City Hall.

Aelin is a new decentralized deal coordination protocol that will leverage the established decentralized governance framework of Synthetix to launch this new protocol in a fair and transparent manner. Alex explained that 30% of the initial supply of AELIN tokens will be released initially. Of this 30%, half (so, 15%) will be airdropped to SNX stakers on L1 and L2 as a sign of appreciation for the effort that has gone into Synthetix governance enabling Aelin to launch via this SIP.

The other 15% will be split into thirds: 5% will go to the Aelin DAO to keep everything running, 5% will go to the initial Aelin Launch Pool, and the remaining 5% will be for DeFi Mega Pool Farming. The other 70% of AELIN tokens will be distributed over a 4-year period, and Alex said there will be a staking rewards contract shortly after launching Aelin.

As for the Aelin Council, there will be 5 seats who will initially be voted in by SNX stakers. The duties of this initial Council will be to hold the funds for the protocol, set the direction for v2, host meetings for the community, propagate educational resources, manage and pay Core Contributors, help set up the initial AELIP governance proposal structures, and more. Alex and Kain emphasized that these are the early stewards of the protocol who will push Aelin towards v2, which will have a much more robust governance mechanism and maybe even different DAOs to serve different purposes. The initial stipend for Council members will be 0.2 $AELIN per month.

This SIP was also voted on and approved, with 6 Council members voting in favor and none against. And as a reminder to SNX holders: there is a separate snapshot space open for you to use your SNX to vote for the first Aelin Council, so get your votes in!

Grants Council

Present at the December 2, 2021 Grants Council meeting:
Grants Team: ALEXANDER, clem, CT, Mike, rubber^duck

In Grants news, the Retroactive Public Goods Grants (RPGG) initiative went live last week! As a reminder, the Grants Council partnered with Gitcoin to put forth a private Grants funding round that will go towards public good projects that have benefitted the larger DeFi community. Feel free to check out their Medium page for a more in-depth explanation of the eligibility criteria.

There will be a Twitter Space happening this week with the Grants Council and Gitcoin to discuss this initiative — so tune in on Wednesday! The main Synthetix Twitter account will also be doing a tweet thread to promote the RPGG project.

As for the upcoming NFT project, the Council is hoping to have another AMA-type online chat with the Ambassadors, Optimism, and the guys to talk about NFTs on Optimism and get everyone excited. Be sure to stay tuned for the date to hear some tidbits and easter eggs about the NFT project ;). Rubber^duck says they just need to reconnect with Universe to see how far they are from a final set of designs, then the ball is pretty much in their court to deploy their products on Optimism.

Version 1.5 of the gDAO site is still being worked on by developer Korede. This version will feature a multiple input field feature for submitting grants, as well as a page that integrates and differentiates between grants and initiatives. Clem and CT will be syncing up with Korede this week to get an update on the site and make sure it can be delivered hopefully by the end of the year.

Lastly, the Grants Council has gotten to the bottom of the issue some people are having with failed transactions when using the Flashloan tool. It appears they’re failing for those with zero transferable SNX in their wallet. The Flashloan tool basically lets you sell off some of your SNX for sUSD so you can pay off some of your debt and eventually get unstaked. If all of your SNX is staked and zero SNX is transferable, then there is zero SNX that can be sold. You can ONLY take a flashloan out against transferable SNX. Rubber^duck will be writing a disclaimer for the page that says you need to have some transferable SNX for this to work.

Ambassador Council

Present at the December 1, 2021 Ambassador Council meeting:
Ambassadors: andy, GUNBOATs, MiLLiE

In Ambassador news, Millie has submitted a SCCP to modify the Ambassador Council mandate for the upcoming election. The most notable change will raise the Council seats to 4, while allowing for a 3/4 Gnosis Safe Multi-Sig. The new mandate also reinstates the need for a technical role on the Ambassador Council. Previously, in SIP-157, there was a clause that excluded any expectation of technical skills related to smart contracts. However, as the Ambassador Council has matured with initiatives such as the Governance Participation Program, it has become apparent that a technical role within the Council is in fact necessary. Pending Spartan Council approval, the Ambassadors are hoping that this SCCP gets implemented in time for the upcoming epoch.

In case you missed it, the Ambassador Council hosted a Spartan City Hall last week with Optimism. We got to hear co-founders Kevin and Ben answer several of the community’s questions as well as discuss the recent regenesis and the future of Optimism.

Ben gave us a rundown of what exactly EVM equivalence entails, explaining that it means the system is fully compliant with Ethereum in a way that is very different. He continued saying they realized that they needed something that was exactly the same as Ethereum, because Ethereum on L1 is constantly improving. Kevin added that they worked closely with a lot of projects to get them integrated on OVM before the EVM equivalence, so it’s really nice seeing all of them now having one-click deploys.

Andy asked if this was Optimism’s last regenesis or if there will be more in the future, to which they replied saying there will likely be upgrades in the future.

Millie asked them to elaborate a little more on EVM equivalence and how it compares to other L1 chains. Ben explained that several other Layer 1s do already have EVM equivalence, but most are more centralized. But in Optimism’s case, he explained that everything they build has to have security that can be routed through Ethereum. The core difference that makes this EVM equivalence unique for Layer 2s is the way that they were able to tie in the security of Layer 1 and apply it to the Layer 2 system.

Next, Andy asked if they had an estimate for when the whitelisting will cease to exist. First off, Ben wanted to reiterate that even though they still have a whitelist, it is still extremely easy to get through it, and there have been a ton of projects that have launched since their EVM equivalence. Kevin echoed this saying basically if you fill out the type form information correctly, you’re almost guaranteed to get whitelisted within a week whether you’re a small or large project.

He added, however, that they have done a lot of de-risking on arbitrary contract deployment. And while they’re not making any promises, there’s a possibility that whitelisting will be removed by the end of the year. But regardless, they would like to remove the FUD that it’s difficult to deploy on Optimism because of whitelisting!

Millie then asked them to clarify the centralization aspects of Optimism. Ben said that if you’re on L2, there is a critical centralization factor no matter what that is going to compromise the security in some sense. He added that “the trade-off you make is that users don’t get all of that security up front, but up front comes sooner.” This is the reason why they don’t have fraud proofs yet, but this is likely going to be a key integration in the next upgrade.

Millie also asked the guests where they see Optimism in the long-run. Kevin said that once the whitelist is lifted, since they will be at EVM equivalence and 1-to-1 with geth, Optimism will inherit all of the stability of geth. This means they will be able to scale up to millions of transactions per day, which will be a very critical inflection point for several major applications.

Ben also touched on EIP 4488, saying it basically proposes a way to make calldata cheaper while capping the blocks at a maximum size. This will most likely allow for cheaper transaction costs for rollups and a 5x reduction in calldata costs.

If you missed this City Hall and would like to hear all of these points discussed more in-depth, be sure to check out the recording. Kevin and Ben were great guests, and we all learned a lot!

Lastly, as another reminder, the nomination period for all DAO positions is open for another week! To be on the ballot for the Spartan, Treasury, Grants, or Ambassador Council you must have your nomination in before the end of the day UTC time Tuesday December 14th. Voting will begin immediately following the end of the nomination period and will go through the end of the day UTC time Tuesday December 21st.

And of course, don’t forget that if you are running for Spartan Council and would like to participate in the panel, you must have your nomination in before 22:00 UTC Wednesday.

Your participation in governance is what keeps the Synthetix ecosystem flowing, let’s make this a great election!

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SIP/SCCP status tracker:

SIP-190: Add LUSD/sUSD Wrappr to L1, Status: implemented

SCCP-151: Wrappr Parameter Changes (L1), Status: implemented

SCCP-153: Increase Volume Cap on Atomic Exchanges, Status: implemented

SIP-192: Fee Pool Accounting Error Fix and Reimbursement, Status: implemented

SIP-188: Add sETHBTC synth, Status: approved

SIP-180: Aelin Protocol, Status: approved

SCCP-155: Ambassador Council Modification, Status: draft

SIP-157: ambassadorDAO Mandate