SNXweave Weekly Recap 89

May 17, 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 May 10, 2023 Spartan Council Weekly Project Sync:
Spartan Council: Adam, cyberduck, Danijel, dsacks, Jackson, and ml_sudo
Core Contributors: db, Mike, noah, Rafa

To start off with a quick work in progress update for V3, the alpha spot market implementation SIP was presented last week and is pending a vote. It is currently through audit with Open Zepplin, and Iosoro is looking at it now, so it should be wrapping up shortly.

Prior to last week’s meeting, the rudimentary trading front end was also launched, but only for testing to see how the system is functioning. The current focus for the engineers is on cross-chain deployments, as the CCs are preparing to add this functionality as soon as CCIP is launched and db is working on a proof-of-concept implementation for cross-chain pools.

Other priorities at the moment include the alpha UI for stakers (which is up and running!), revamping V3 documentation, and continuing conversations with integrators about V3 integrations.

Moving on to last week’s SIP presentations, SIP-2015 for five additional Perps V2 markets (XRP, DOT, TRX, FLOKI, and INJ) was presented by Matt.

During this presentation, Adam brought up a topic of discussion that started during the call and then continued in the Spartan Council meeting. He flagged the way that new markets were being proposed, saying that markets are currently proposed via SIP (which requires a community presentation), but all of the relevant risk parameters are set via SCCP (which does not require a community presentation).

He thinks it’s not too much of a problem, given the current CCs and SC, but that the process may present issues later (given the potential risk to the debt pool associated with listing higher volatility assets). This is typically mitigated by the funding rate model, however, which incentivizes arbitragers to help maintain neutral markets.

Noah added that, historically, SIPs were reserved for code changes and SCCPs have been for configuration changes. One of the goals of V3 is that there will be very limited changes to the code, and if there are any code changes they will be relatively minor. As a result, most governance activity may come from SCCPs, so it might be valuable to start a discussion of how governance will look and get community input in V3.

Next, SIP-2014 was presented to add three more additional Perps V2 markets — PEPE, SUI, and BLUR. Westie explained that in addition to building the current list of offerings, these assets were selected because they have deep spot liquidity but very limited on-chain perps trading markets.

Once approved, the markets from SIPs 2014 and 2015 will be launched, but will be paused pending SCCP parameter updates.

SCCP-304 was also presented last week, which proposes deploying a synthetic ETH spot market with a snxETH token to Optimism, integrated with the Synthetix V3 core system. Noah explained that the same settlement strategy being used for Perps V2 is also being applied to spot markets in V3 (Chainlink oracle for price, Pyth oracle for asynchronous settlement). This will also set up an ETH wrapper (which will initially be capped at 100 ETH), and would be deployed to Optimism first.

As the first market on V3, this would allow for further testing of the system to make sure everything is functioning as expected. In V2, adding a new spot market would have required a code change and a SIP. In V3, however, this is the only configuration change, which is typically done via SCCP (no presentation required). This was presented with the goal of opening up the discussion on governance processes going forward, given the new V3 framework.

Lastly, Afif presented SIP-2013 for a dynamic gas fee module, which would be able to adjust the minKeeperFee, within bounds set by governance. He explained that the purpose of the keeper fee was never to subsidize gas costs for users, but rather to roll up trades and gas fees into a single transaction for better UX. The proposed dynamic fee in this SIP would allow users to pay the additional cost directly out of the sUSD margin, so it would still only be a single wallet transaction. There is also a target minimum profit on these transactions to incentivize keepers, as well as an absolute maximum.

Grants Council

Present at the May 11, 2023 Grants Council meeting:
Grants Team: Alexander, CT, sunny, synthquest

The Grants Council also had a productive week, making some good progress on the NFT project, stats page, budget tasks, Discord bots, and more. Sunny also had an awesome V3 Overtime market idea, so a new channel has been created to further discuss this within the Council.

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SIP/SCCP status tracker:

SIP-322: Spot Market View Functions, Status: draft

SIP-2015: 5 Additional Perps V2 Markets, Status: draft

SIP-2014: 3 Additional Perps V2 Markets, Status: draft

SCCP-304: snxETH V3 Spot Market, Status: draft

SIP-2013: Dynamic Gas Fee, Status: draft