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Synthetix Quarterly Report — Q1 2022

Synthetix Quarterly Report — Q1 2022

Quarterly Report for Synthetix, Q1 of 2022: January — March.

Wow, where to even begin? What an epic epoch! Let’s start with the highlights shall we.

Q1 Highlights

Spartan Council/CCs: Futures & the Debt Pool Synthesis

Grants Council: Hero Stats Page & Tools Site

Ambassador Council: Spartan City Halls

How could we discuss this epoch’s highlights and NOT talk about Futures and the Debt Pool Synthesis?? More like how will we be able to top this epoch…

Merging the debt pools was necessary to provide maximum liquidity across the protocol and provide the ability to transfer synths between multiple chains efficiently via cross-chain messaging in the future. And Synthetix’s perpetual futures have enabled an expansive and capital-efficient trading experience by allowing fully composable, on-chain leverage on a large selection of assets.

It was very clear early on in the proposing of Futures that deployment to Optimism would be required for a successful launch. And in the days since its launch, trading volume on Optimism has skyrocketed, breaking $50mil on March 29th. In fact, nearly half of the trading volume for the entire quarter has been executed since the launch of Futures. Want to know how you can follow this?

Well, that brings us to our next highlight of the epoch — the Stats page & Tools Site. The Grants Council has been working hard to bring the community actionable data, along with all of the resources you need to learn the ins and outs of Synthetix. And they are doing this with the Tools Site and their proposed improvements to the Stats Page. You can now head over to and see stats well beyond what was previously available on the staking page. This Grafana version of the Stats page was released by the Core Contributors (CCs), but the upcoming HERO Stats page is a highly anticipated release that the Grants Council has already spent countless hours working on with designers and developers.

The Ambassador Council also continued their hard work this epoch, serving as the protocol’s evangelists by bringing awareness to countless projects in DeFi. Through their growing Spartan City Hall initiative, the Ambassadors invited representatives from several projects to come have a live discussion in the Synthetix Discord. In addition to making these connections and increasing awareness, one of the most important functions of the Ambassadors Council is the way in which those connections are used to foster further collaboration within the DeFi space. For instance, with the issue of teleporters turning out to be an exceptionally difficult problem to solve, a Spartan City Hall with Across protocol sparked a conversation between Across and the Synthetix CCs about the possibility of Across running a relayer. Collaboration really is key!


Despite a long list of highlights, no epoch is without its bumps in the road. Early in the quarter, with the release that brought us Dynamic Exchange Fees, a minor change caused an integration error with protocol partners. The Spartan Council called an emergency session and quickly executed a follow-up release of SIP-209 to correct the issue by updating the Exchanger for backwards compatibility.

There was also a minor hiccup in the Debt Pool Synthesis implementation. It was originally expected to go out with Futures on the Diphda release, but unfortunately ended up being pushed to a week later. After its release, however, there was another issue that required an emergency suspension of minting and burning beyond the short downtime the community was expecting. Thankfully, the issue was resolved, and minting, burning and claiming were resumed by March 28th.

There were also a few issues that came up around election time. The initial plan was to use the new V3 Governance Election Module (V3GM) for this past voting period, but it unfortunately wasn’t ready in time. The only options were to either extend the epoch to accommodate this delay or push the V3GM debut one more epoch, and the decision was made in favor of the latter. Then, the day after voting opened, several stakers had an issue where their weighted debt (WD) was not displaying correctly when they cast their votes. Voting was therefore paused and restarted, and the epoch was extended to allow for the normal 7-day voting period.

And of course, we can’t forget about SIP-210 and the heated debate that this DAI wrapper discussion sparked. With DAI representing one potential risk to the protocol, and debt pool skew representing another, this SIP saw the Spartan Council separated along a fault line of ideology and pragmatism. In the end, the result ended up being decided by a single dilution. With 5 votes in favor required for a SIP to pass, SIP-210 was rejected at 4.87 votes.

Protocol Stats

Overview of Synthetix Q1 Stats: January 2022 — March 2022.

Sneak peek into what the HERO STATS page will look like, but with real Q1 data!

Spartan Council

Q1 2022 Spartan Councilors: Afif, BigPenny, bojan, jj, Kain, KALEB, redmarglar, TerraBellus

Along with their contribution to the achievement of major Synthetix milestones this epoch, let’s take a minute to review everything else the Spartan Council was able to achieve in just the last 3 months.

We began the epoch with a lot of initiatives to start getting stakers over to L2. In January, inflation rewards were increased to 100k SNX, ETH loans went live to increase sUSD liquidity, and in partnership with Gelato, a wETH pool was incentivized to add value for stakers and liquidity providers.

Kain also published an unofficial roadmap for Synthetix detailing the plan for the protocol this year.

He called attention to the growing number of users on other chains, and proposed network mobility

(teleporters, bridges, etc.) as the primary solution for this. The biggest deliveries that he expected to have out for this epoch that have been released are Futures, the Debt Pool Synthesis, and Debt Shares.

Unfortunately, there have been some setbacks on the teleporter front. Though the release date is unclear at this time, Chainlink has an upcoming product that facilitates these cross-network transfers called their Cross-Chain Interoperability Protocol (CCIP). In the longer term, this will be the most elegant solution to the problem of cross-chain mobility, so Synth Teleporters will likely be on hold until we have V3 and CCIP.

In the roadmap, Kain also went into detail about his vision for V3 and how Synthetix will transition to a completely new protocol architecture. A huge part of this upgrade is the highly anticipated V3GM that we mentioned earlier. Kain says it will eventually be spun off into its own partner protocol, which will “enable the next generation of projects to launch with fully on-chain governance that is flexible and decentralized.” Hopefully we’ll get a sneak peek of its functionality for the next election period!

February then saw a number of releases go out, fueled in large part by a very productive global offsite. The team got a rare opportunity to collaborate in person, which paved the way for some of the high-profile releases later in the epoch. The team also announced a partnership with dHedge to deploy a one-click hedging solution for SNX stakers on Mainnet Ethereum.

The Alsephina release implemented Dynamic Exchange Fees, a dependency for Futures, and resulted in trading fees being cut nearly in half. The objective with the dynamic fee implementation was to bring traders the lowest possible fee while also addressing any opportunity to frontrun oracle price feeds.

SIP-185, for Debt Shares, was implemented on the Alphard release. While this improvement didn’t change much for stakers immediately, it was a dependency for the Debt Pool Synthesis (which went out later in the epoch).

sSOL was added to Optimism with shorting on the Polaris release in February, making it the first new synth on the protocol in over a year. Later in the month, they took this one step further by adding sAVAX, sMATIC and sEUR on the Algeiba release. sAAVE and sUNI were also added, but on a subsequent release.

Hamal implemented the Target Staking Ratio SIP in hopes of achieving a network staking ratio of 85%. This release was really about increasing the bandwidth of the protocol by bringing new stakers in and increasing the synth supply. In the short term, the increased inflationary incentives seemed to be drawing in additional stakers and can be seen in the increase in staking activity from ~65% prior to implantation, to above 70% today. Long term, the Council expected there to be some lag between higher APYs and corresponding staking activity, and is likely to reassess the increase in inflation rewards in the coming months and tweak it if necessary.

March was a huge month for the protocol and marked a major milestone in the product release schedule. After almost a year of delays (since its original presentation) SIP-80, for Futures, finally went out on the Diphda release. Most of the delays lined up with some of the launch delays on the Optimism side. It was clear early on that Futures would not be a desirable product on L1 given the gas fees, so the team settled on Optimism as the most reliable, secure, and scalable solution.

Grants Council

Q1 2022 Grants Councilors: beachmom, CT, cyberduck, joey, Mike

As always, the Grants Council has been hard at work improving the protocol through their carefully-vetted grant proposals. Here are this epoch’s highlights from them:

  • Gitcoin Funding Round 12 paid

For some context, the Grants Council embarked on a Retroactive Public Goods initiative back in December. The idea of Retroactive Public Goods Grants (or RPGG) was first proposed by Vitalik Buterin last summer, and has now become an integral part of the Grants Council’s mandate. By funding public goods projects after the fact, it provides a way to maximize value in the DeFi community. The Council therefore partnered with Gitcoin to put forth a private Grants funding round that went towards public goods projects that have benefitted the larger DeFi community. Utilizing a specific eligibility criterion, the Council was able to ensure that the 8 projects they funded truly fit into the RPGG model they adopted. And with quadratic funding, it was up to the community to decide how the funds were allocated. At the conclusion of the funding round, the Grants Council paid $75,000 to Gitcoin, who then distributed the funds to the projects directly. Check out the full list here:

  • Grants Council funds community proposal for Uniswap to incentivize liquidity on Optimism and Arbitrum

After a fairly unilateral consensus check (see below), it was voted that Uniswap should incentivize liquidity on Optimism and Arbitrum. So, @litocoen put together a proposal to make this happen. And luckily for everyone, the Synthetix Grants Council provided the grant for the contract development and audit for his proposal. This is just another great example of the amazing public goods side of the Grants Council.

  • SYNTHETIX NFT project leak

WOOO! The Council has been working extremely hard with to bring this massive NFT drop to Synthetix. This epoch brought more creative juices and even better concepts, as the Council did a bit of reworking with the designers to perfect these concepts. In February, they leaked the different “TRIBES” for the project:

Synthetix: Human Spartan Warriors

Synthetix: Legendary Human Spartans

Synthetix: Humans Spartan OG’s

Synthetix: Humans Spartan Demi Gods

Synthetix: Undead Masses of Silent SNX Holders

Synthetix: Discord & Twitter Trolls

Kwenta: Elementals

Thales: Philosophers

Lyra: Mechanoids

Aelin: Alien Elfs

dHedge: Dwarfs

And then, during the gov call in March, the Council also leaked some blurred images of a couple of the NFT concepts. But we’ll do you one better…check out these non-blurred concepts below. Several of these are still in the early stage of the design process, but aren’t they awesome??


As for what they’re up to now — they’re continuing to perfect the TRIBE designs, and are in the process of writing up some LORE to give this NFT universe its proper backstory for the Synthetix ecosystem.

  • TOOLS site is published

The much-anticipated TOOLS site was shared at the end of March. Acting as an all-in-one pit stop for your Synthetix needs, the TOOLS site provides a collection of dApps and resources that are useful to the ecosystem in the larger DeFi and multi-layer Blockchain space. If you were to navigate the site you’d find “Guides” on topics such as how to write a SIP, how to stake SNX, or how to vote. You’d also find the very useful “Packs” category, which includes everything you would need as, say, a first time staker. And of course, what’s a TOOLS site without Tools? Yup, there’s a very handy section for that as well. There you can find links to the Flashburn App, Etherscan Gas Tracker, CEX Hedging Bot, and many others. There’s so much more to the site than what we’ve mentioned here, so be sure to explore it at:

Wanting to prioritize usability first, the Grants Council does recognize that this site is a bit of a work in progress. That’s why they’ve asked the community to help them write short descriptions of all the Tools and Packs, as well as design up some unique icons. So, if this sounds like something you’d be interested in, head over to the grants-council channel in the Discord and reach out to any of the five councilors.

  • HERO STATS page in progress

I know we’ve all been looking forward to this one for a LONG time now. The new Grafana Stats page that the CCs created was officially made live at at the end of March. You can view protocol information such as volume sources, total traders, APY, etc. from both Optimism and Mainnet. As this page is also still a work in progress, Futures Trading has not yet been integrated and optimizations will be made as time goes on.

The Grants Council, however, is working on a sexier version of this site, known as the HERO STATS page, with designer Jade. You can check out this link to see what this new site will look like on different screens.

The Council is currently working hand-in-hand with the CCs on the HERO STATS page, as they are dependent on the data sources that the CCs are putting in place for this. But either way, time to put the 13 traders meme to rest.

  • Synthetix FUTURES Dune Analytics Dashboard

The Grants Council dropped this little doozy last week, and it has already been such a useful resource for accessing Futures-related data such as volumes by period & market, trades, traders, deposits, withdrawals, longs, shorts, fees generated and more. The Council funded @drethereum to build this, and welcomes any feedback or suggestions as they continue to work with him on any additional updates to the site.

  • SNXweave

Saved the best for last, am I right?😉 SNXweave and the Grants Council working together continues to be a force to be reckoned with. This epoch alone, SNXweave has published 13 Weekly Recap blog posts & 13 Weekly Recap podcasts. We have also had the pleasure of hosting the first ever LIVE Spartan Council Election Panel. And now, we’re finishing Q1 off strong with a Quarterly Report to tie the epoch up in a neat bow.

What’s next for the Grants Council?

I’m glad you asked, because there’s a lot brewing. The biggest projects in the works right now are:

— NFT project

  • Like we said, this project is coming along swimmingly. The next leak we will likely see here is regarding the LORE that is in progress. A tentative release date for the NFTs is the end of Q2.

— Hackathon

  • The Grants Council has been in conversation with an Indian University to sponsor and participate in this hackathon.
  • This will take place April 14, 15, and 16.

— Translations project

  • The team has taken proposals for this project to help them translate important Synthetix documents into different languages based on demographic data of website users. They are brainstorming ways to ensure that each translation is 100% precise, because even the slightest deviation could create a huge difference in the way that the information is interpreted.

And of course, with every new epoch comes fresh ideas. The team is already discussing a number of new initiatives, such as a Wrapper UI or 1-click leveraged ETH using loans. It’s up only ⬆️ with the Grants Council 24/7.

Ambassador Council

Q1 2022 Grants Councilors: GUNBOATs, Matt, MiLLiE

The Ambassadors have kept their Spartan City Hall game going strong this epoch, holding five City Halls with five different protocols. Let’s quickly review each of them:

  • Spartan City Hall with Across Protocol

Across is a novel bridging method that combines an optimistic oracle, bonded relayers, and single-sided liquidity pools to provide decentralized instant transactions from rollup chains to Ethereum Mainnet. During the City Hall, we heard from Chandler, Matt and John who explained how Across works in depth. We won’t get into the details here, but if you’d like to learn more about Across, check out our blog post here to read a recap of the City Hall with them.

  • Spartan City Hall with Gearbox Protocol

Gearbox is a generalized leverage protocol, meaning it allows anyone to take leverage in a DeFi-native way and then use it across various DeFi protocols in a composable way. Basically, you can take leverage with Gearbox and then use it on the protocol of your choice. During the City Hall, we heard from Mikael, Ivan, and Ilgiz who went pretty deep into the technical details of Gearbox. Be sure to read our blog post for a summary of the call.

  • Spartan City Hall with Thales

Thales is a decentralized protocol that allows users to take part in peer-to-peer parimutuel markets on Ethereum. Thales introduces the unique combination of custom market making on the most secure and decentralized blockchain around while still providing a trading experience that’s easy to understand and actually quite fun. During the City Hall, we got to hear from Padzank, Red, and Danijel, so if you’d like to read more about it here’s a recap of the discussion.

  • Spartan City Hall with Nuke Vaults

Nuke Vaults is a stablecoin- and Layer 2 EVM-focused yield aggregator, with a mission to become the “#1 place to go when you’re looking to get Yield on your Stablecoins on Layer 2 and Sidechains.” During the call, we heard the Ambassadors speak with Calavera, Linus, and Trinty. If you’d like to learn more about Nuke Vaults, read the summary of the City Hall here.

  • Spartan City Hall with Quixotic

Lastly on our Spartan City Hall list, Quixotic is the largest NFT marketplace on Optimism. Quixotic provides speed and cost efficiency, as well as all of the safety and security inherited from L1 Ethereum. During the City Hall, guests Daniel, Mark, and Dre got into some of the specifics of their marketplace, and also discussed the growing governance structure of Quixotic. So, if you haven’t already, be sure to read all about the call here.

  • L222 Tuesday Twitter Space

The Ambassadors also hosted this lively Twitter call with Kain and the founder of Optimism, Ben Jones. They got to discuss topics such as L222, ETH DeFi renaissance, the benefits of L2 native projects, efficiency improvements for Optimism transactions, and MUCH more. You can catch the recording of the call here if you missed it.

  • Governance Participation Program (GPP) — rewards & review

You may recall when the Ambassadors first introduced this program back in September with the aim to help equip the Ambassador Council with the additional voting power necessary to fulfill their mandate to act on behalf of the interests of SNX holders. They therefore started the GPP, which was a pilot program that incentivized delegations of governance tokens to the Ambassador Council and encouraged indirect participation from smaller token holders who might have otherwise forewent their governance privileges.

All unclaimed rewards from this program were distributed on Optimism back in January.

The Ambassadors also released a Mirror blog post at the beginning of March detailing the successes and failures of the GPP. Delegators of UNI tokens were rewarded with 32,000 SNX (!!!) over a 30-day period. However, due to the nature of the program, it was not impervious to whale farming. One whale extracted a large portion of the rewards after the program became highly publicized, which went against its whole purpose.

Nevertheless, had it been the Ambassadors’ goal to take action with the delegated UNI, the GPP proved to be a very powerful way to facilitate that goal indeed. They had enough UNI tokens delegated (>2,000,000) to propose an on-chain vote at the time, and 90% of the wallets that delegated in the GPP remain delegated today.

  • New Ambassador Council Mandate proposed

At the end of March, Millie proposed this SIP which will create a more structured approach to the Ambassador role by relying on a number of key performance indicators (KPI). These KPIs are:

  1. Total delegated voting power of all ecosystem governance tokens

2. Number of social events and their audience/viewership count (Town Halls, DAO-to-DAO community calls, Twitter spaces)

3. Sum of Protocol integrations, Grants referrals and contributor referrals

4. Use of the Synthetix Councils’ and CC’s Coordinape circle as an indicator for non-public contributions and productive Discord engagement

5. Various approved SIPs written by members of the Ambassador Council

By proposing that these KPIs be incorporated into their mandate, the Ambassador Council hopes to offer more accountability to the token holders and provide transparency surrounding the performance of its members. These KPIs should also prove to be clear metrics for growth and improvement, creating a reference point for the past, present, and future performance of the Ambassador Council.

What’s next for the Ambassador Council?

The Ambassadors have a couple of things potentially on the horizon:

— Another Governance Participation Program

  • Since the first GPP was just a pilot program, the Ambassadors are hoping to run another iteration of it in the future and enhance the program based on what they learned from the first trial in order to maximize their votes in a targeted way.

— Potential integration with Across Bridge V2 (when it’s released)

  • The Treasury Council is exploring a fast-bridging solution from Optimistic Ethereum to Mainnet, so the Ambassadors referred them to Across Protocol since it’s currently the best solution for Optimistic rollups. Their current design, however, doesn’t support synths, but this integration will hopefully take place once they deploy V2.

Best Memes from Q1

The quarter of course wasn’t without humor, so here are our favorite memes from the epoch:

Afif ❤
Fun fact: “2 weeks” eventually happens!