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SNXweave Weekly Recap 94

SNXweave Weekly Recap 94

June 21, 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 June 14, 2023 Spartan Council Weekly Project Sync:
Spartan Council: Burt Rock, Cavalier, cyberduck, Danijel, dsacks, Jackson, ml_sudo
Core Contributors: Afif, KALEB, meb, Mike, noah, troy

In case you missed it, Synthetix announced the addition of Lido Finance’s stETH as the latest asset for leverage trading on Perps! This exciting new perpetual futures market has been approved by SIP-2021, and had parameters set in SCCP-2015. Synthetix Perps is now the ONLY protocol that supports stETH perps — no other decentralized or centralized perpetual futures protocol currently supports stETH.

For a V3 work in progress update, the CCs have made some good progress on the developer section of the V3 docs. Auditors are focusing on the legacy market now, and the CCs are preparing to start the migration process once the market is live (while also processing auditor feedback as it comes in).

The team is also focusing on deployment tooling and streamlining the process from governance to deployment as much as possible. V3 will bring a big update for this process, handing over full control of upgrades to the Spartan Council. The vote will happen on chain, rather than snapshot, and the pDAO would assume a more risk-review function rather than executing upgrades.

Some additional tooling and UI upgrades are also in the plan to make the process more accessible to SC members. ML_sudo asked what the motivation was behind this change, which is to:

  • Improve decentralization
  • Provide on-chain governance processes, and
  • Increase resistance to governance attacks

The top priority is now Perps V3 — some of the initial specs have been shared with integrators, and the interfaces should be ready to share this week. Conversations have also begun with existing integrators to make them aware of the changes in Perps V3.

Lastly, as a teleporter update, the CCs executed a successful round trip of sUSD on test net. They are currently waiting on Chainlink to deploy token pools on different networks, such as arbitrum, to further test the functionality. Danijel asked how long it takes to deliver messages cross-chain, and meb said it depends on the chain that you initiate it from, and is also based on different factors such as finality on the destination chain and riskiness. However, it only takes a couple of minutes on test net as of now (not seconds — due to a focus on security.

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

SIP-324: V3 SNX staking pool

  • Presented by Cavalier, this SIP proposes a V3 pool for SNX staking that does not have market exposure, with yield provided by an external source
  • It will basically create a new V3 pool, market, and rewards distributor contract that will all be owned by the Spartan Council
  • 30% of SNX is currently unstaked, so the goal of this SIP is to attract some of those users with yield (funded by the Treasury Council)
  • It would not be exposed to markets and would therefore incur less risk and would require less direct management

There was some skepticism, as a few SC members brought up concerns during the presentation:

  • Danijel wanted clarification on how to know that this product would not compete directly with current staking offerings, and stressed that he wants to see actual numbers in order to make a decision
  • Danny added that the yield would have to be high enough to attract users away from AAVE, which is currently yielding 3%
  • Danijel also asked what the Spartan Council’s role would be in this process, and Cav explained that, since it’s a new pool, it would require governance approval to use the new V3 system
  • · Consensus was to include the exact terms of this pool before the SIP is put to a vote (may require re-presentation as well)

SIP-326: Additional Pool Configuration

  • This SIP introduces enhanced configurability for V3 pools by enabling pool owners to deactivate specific collateral types or define a more conservative c-ratio
  • All pools currently inherit the system-wide configurations of permitted collateral types and c-ratio
  • Cav explained that this SIP will give pool owners control to set collateral type and c-ratio more conservatively if they wish to do so

— They could increase the c-ratio as much as they want (up to infinity), but not decrease

— They could also reduce the list of possible collateral, but not add to it

SIP-311: snxUSD Teleporters

  • This SIP, presented by Pieter from Chainlink, proposes the addition of a cross-chain transfer function to the snxUSD token
  • Leveraging cross-chain messaging, Synthetix is able to implement highly efficient digital asset transfer via teleportation
  • In its simplest form, this entails burning snxUSD on a source chain, sending a cross-chain message containing the amount burned, and minting that quantity of tokens on the destination chain

Pieter gave a technical description of this process during the call

  1. User initiates a cross-chain message (including destination chain)
  2. Router contract receives the message and burns the asset on the source chain (after confirming finality)
  3. Two oracle networks power this process (committing oracle and executing oracle)
  • A totally separate active risk management network developed by a different team in a different programming language is constantly monitoring this process for anomalies, providing the ultimate layer of security
  • There is also rate-limiting capability to limit the amount of exposure at any given time
  • This allows transfers to any chain that the Spartan Council votes to deploy V3 on
  • Kaleb asked what would happen if the fee changes in transit. It was explained that smart execution functionality allows the sender to set a gas limit for the transaction, and as long as the limit is above the destination gas price, the transaction will go through
  • Danijel asked if there would need to be additional oracles for each chain that V3 is deployed on in order to keep track of the debt (like in V2X). Db answered saying no, V3 is set up so that the debt is managed at the pool level and deployments to different chains would represent different pools in V3. The CCs are, however, looking into building cross-chain pools, but that feature would be separate and is not ready yet (possibly by Q3 or Q4 this year)

Grants Council

Present at the June 15, 2023 Grants Council meeting:
Grants Team: Alexander, CT, JVK, synthquest

The Grants team had the following updates last week:

  • NFT project is being prepped for launch
  • Bots dev payments sent
  • Major safe maintenance done thanks to the Treasury Council
  • First draft of the governance guide is complete, the team is now seeking second draft input outside of the Grants Council
  • public goods grant processed for 2,000 SNX

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SIP/SCCP status tracker:

SIP-2021: Adding stETH/usd to Synthetix Perps, Status: implemented

SCCP-2015: stETH Perps Parameters, Status: implemented

SIP-324: V3 SNX staking pool, Status: draft

SIP-326: Additional Pool Configuration, Status: approved

SIP-311: snxUSD Teleporters, Status: approved