SNXweave Weekly Recap 80

SNXweave -

March 15, 2023

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 March 8, 2023 Spartan Council Weekly Project Sync:
Spartan Council: Adam, Cavalier, dsacks, Jackson, KALEB, SeliniCapital (representing Jordi), William87
Core Contributors: Afif, Bex, Darius, joey, jz, Matt, Mike, Nikita, noah, sunny

First off, the top priority right now is getting markets up on V3. Auditors are starting to look at the spot market implementation, and the SIP for this is being presented tomorrow. The CCs also did a lot to get the ball rolling on Perps V3 at ETHDenver — the focus should still be on driving Perps V2 volume, but the team is hoping to get a Perps V3 UI prototype ready for users to start testing as soon as possible.

Adam asked if there was already a communication plan in place to share documentation or guides for integrators to start making use of the system update and new stablecoin. Noah said it’s definitely something they’ll have to start prioritizing once everything is in audit.

As far as Perps V2 goes, all of the updates are code-complete. Auditors should be able to complete the review next week, since they currently have other active audits that they’re working on. The updates are a collection of improvements discovered through the alpha and beta by the CCs, integrators, and other active users. Open interest caps have also been raised for BTC and ETH.

There were also a couple of SIP presentations last week, so let’s briefly review them.

SIP-237: Debt Migration

  • This SIP introduces a mechanism to allow stakers to migrate their debt position from Ethereum to Optimism without the need to burn their debt. This has been a long time coming and marks the end of V2X!!! Let’s take a moment to celebrate that 🎉
  • The current staking migration process requires stakers to burn all debt due to limitations in the debt register design
  • The implementation of debt shares has allowed for staking positions to be migrated without the need for debt to be burned
  • During the presentation, Kaleb raised a concern about how to handle escrow entries with this
  • There was some discussion about what the new unlock date should be — Jackson weighed in a lot because he did this once before when escrow changes were made in the past
  • Chainlink is ready to go and the SIP could be released as early as this week

SIP-2007: Direct Integration — Peg Balancing

  • As a background, the protocol is currently at the wrappr cap for DAI and ETH, which could cause sUSD to start trading at a premium again. The risk is that if the DAI wrappr is increased, any utilization outside of perps would increase the long skew.
  • One possible solution is to increase the DAI wrapper for availability to Optimism only to ensure it only goes to perps
  • SIP-2007 proposes allowing a direct integration with the pDAO to swap sUSD for sETH with no fee
  • This would give the pDAO more direct control of the debt composition and skew
  • This also may be especially useful during the proposed OP trading incentive rewards due to the expected influx of active users

Terra asked why this should be a special pDAO privilege rather than a governance-controlled action via SCCP if the intention was for this mechanism to be used infrequently:

  • Kaleb explained that the amount of time to get an SCCP through governance may be too long to protect users from paying a premium on sUSD
  • Cavalier highlighted that this seems like a mechanism that would allow CCs to ensure components of the protocol are performing as they are designed to, and should not require a governance step at each action (since governance processes already approved the intended function of the protocol)
  • Kaleb will be specifying more clearly what type of transactions will be authorized under this SIP
  • It was also suggested that a channel be set up to announce all transactions executed using this mechanism for increased transparency

This SIP was rejected in order for changes to be made.

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SIP/SCCP status tracker:

SIP-317: Spot Markets, Status: draft

SIP-237: Debt Migration, Status: draft

SIP-2007: Direct Integration — Peg Balancing, Status: rejected