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Sunsetting Perps V1

Sunsetting Perps V1

Synthetix governance has approved SCCP 2008, a plan to sunset Perps V1 markets. These markets have been in close-only mode for 3 months, but there are still some positions that haven’t been closed. This is a necessary step in deprecating Perps V1 and moving these last few traders to Perps V2.

Details on SCCP 2008 & Perps V1 deprecation

SCCP 2008 is a proposal that aims to deprecate Perps V1 Markets by increasing the margin requirement on existing positions. Despite being in close-only mode since the implementation of SCCP-278 three months ago, there are still around sUSD 150k worth of positions outstanding in Perps V1 Markets.

The liquidationBufferRatio will be raised by 5 percentage points per week for a duration of three months. After this period, the liquidationBufferRatio will be increased to a level that will cause the remaining outstanding positions to be closed by liquidation. In addition, the liquidationFeeRatio will be reduced from 35 bp to 2 bp.

As of this blog post (6/1/23), liquidationBufferRatio is currently at 10%.

What does this mean for traders?

For traders with existing positions in Perps V1, they can still access their positions via Kwenta on this link. Users should withdraw all funds from v1 markets within the three-month window to avoid being liquidated. Users can find idle deposits by clicking the sUSD icon at the top right of the v1 markets page (from Kwenta v1)

You can view active positions at Kwenta v1 or by visiting a recently taken snapshot of accounts with margin and open positions.

Why is this happening?

The primary motivation behind this decision is to sunset outstanding positions in Perps V1 in the least intrusive manner, giving accounts with existing positions enough time to close their positions.

Synthetix Perps (V2)

Synthetix Perps V2 represents a significant upgrade from its initial version, Perps V1, introducing many new features and improvements to enhance the trading experience, increase capital efficiency, and improve risk management for market LPs (stakers).

Synthetix Perps V2 already supports over 40 markets and has facilitated over $10 billion in total volume since its December launch.

A key enhancement in Perps V2 is the implementation of new off-chain oracles. These oracles have been instrumental in significantly reducing trading fees, which now range between 2-6 bps for major pairs. In addition to lower fees, Perps V2 introduces new risk management features designed to neutralize market skew. These include price impact measures and dynamic funding rates.

Any Questions?

If you have any questions or need further clarification, please join the conversation on Discord.