Ghostboard pixel

Synthetix Quarterly Report — Q1 2024

Synthetix Quarterly Report — Q1 2024

Quarterly Report for Synthetix, Quarter 1 of 2024: January — March.

👉Q1 Highlights

Spartan Council/CCs: Andromeda Scaling & L1 Perps
Grants Council: sUSD Bridge UI
Ambassador Council: OP Grants

The first quarter of 2024 was a period of intense growth and development for Synthetix, marked by significant technical advancements and a reinforced commitment to community-driven governance. Let’s take a minute to review some of the highlights and challenges from the last three months.

The Andromeda invite-only Alpha went live right at the beginning of the year. You’ll remember, back in 2023, Kain proposed a series of experiments to test the viability of the flagship Synthetix product outside of the immediate community. Out of an abundance of caution, the deployment remained relatively constrained for much of the quarter with very limited LP and OI caps, but it was unleashed right at the end of March and has since seen nearly $500 million in volume. In just 5 days, the target milestone of $10 million in LP collateral was reached.

The next major milestone is $100 million in daily volume. Currently, the 7-day average daily volume hovers between $10–20 million. This couldn’t have come at a better time, as the scaling of Perps V3 has coincided with a renewed interest in Base. Since its launch in 2023, TVL on Base has hovered between $300–500 million. During the month of March that figure doubled, and transaction volume has increased substantially as well.

In another major event this quarter, Perps volume on Optimism surpassed $50 billion! This is a monumental milestone that underscores the protocol’s robust growth over the last couple of years. This achievement not only highlights Synthetix’s strong market presence, but is a testament to the demand for decentralized perps markets. The protocol continues to demonstrate a strong commitment to providing a scalable and efficient trading experience to users and we can’t wait to see what V3 brings!

This quarter, a V3 use case for SNX LPs was also added in a strategic partnership with Ethena. Ethena is the creator of the yield bearing, decentralized stablecoin USDe. At the end of last year, they approached Synthetix requesting an L1 Perp to execute a portion of their yield generation strategy (capturing the funding rate on derivative positions). Synthetix agreed to be the infrastructure provider on this initiative and the product is expected to go live next month.

The Ambassadors successfully secured two Optimism Grants this past quarter. One grant focused on enhancing sUSD liquidity, a strategic initiative aimed at bolstering the stability and usability of the Perps V2 trading stablecoin. The second grant provides funding to create a best-in-class orderbook Perps DEX — an innovation that continues to revolutionize the DeFi trading experience. These grants not only demonstrate the Ambassadors’ effective representation and advocacy for the protocol, but also highlight Synthetix’s commitment to continuous evolution and constantly expanding offerings that will serve to draw new users to the protocol in the future.


The biggest challenge this past quarter, and one that may be sticky the rest of the year, is the issue of the legacy debt pool skew. It has been a long-standing issue that tends to get exacerbated during bull runs as users pile into one side of a particular trade. Before the protocol launched delta neutral Perps markets, the most popular product was spot synth exposure to cryptocurrency assets — most notably, sBTC and sETH. Much of the other spot offerings have been unwound, but the unbalanced positions that users take in these spot markets require a higher c-ratio for LPs and require stakers to take a more active role in hedging.

Several solutions have been proposed to address this issue and some of them began to take shape this quarter. The issue fee rate on loans was raised from 0% to 40%, ETH Wrapper parameters were updated, and legacy V2 loans were eventually deprecated to apply some reverse pressure to the market dynamics that generate the skew. The ultimate goal is to unwind the spot offerings entirely, as they generate risk for the protocol with almost no fees.

Another challenge this quarter came just after the new year when there was suspicious trading activity on several centralized exchanges. These exchanges, along with Synthetix, rely on healthy arbitrage activity to support market making. Due to the unusual trading activity, a number of arbitragers stopped participating in specific markets. Luckily, and this was planned as a risk management measure, the open interest for these markets was quite small. It did, however, prompt the addition of a new risk management module that would grant the owner emergency authority to reduce OI caps to zero for a predetermined list of assets. This owner will eventually be the risk committee, but until the committee is formed, the Spartan Council would appoint an interim risk council to serve in this capacity under their direction.

The protocol saw a bit of a meta-governance shakeup this quarter as well. After four years serving Synthetix, the current Grants Council will be the final one. The decision to sunset the Grants Council comes in light of the evolving needs of the protocol and a noticeable decline in volume and quality of inbound grant requests. The introduction of a single, technical lead will serve to streamline decision making and ensure that the trajectory of the grants process more closely aligns with the long-term, strategic goals of the protocol. The position will serve at the pleasure of the Spartan Council and can be voted in or terminated at any time with a simple majority.

👉Protocol Stats

Overview of Synthetix Q1 Stats: January 2024 — March 2024.

👉Spartan Council

Q1 2024 Spartan Councilors: Adam, Bilby, Cyberduck, Jackson, Kain, Millie, ml_sudo, and Snax Frens

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

Getting Andromeda over the line was the BIG achievement of Q4 of last year, but that’s where all the work really began towards the effort of scaling the deployment. In January, we saw Andromeda officially launch with a restricted alpha release to allow for further, live testing. SNX buyback and burn was also introduced and the Base SNX bridge was launched, allowing SNX to be transferred from L1 to Base to be bought and burned. As a reminder, this solution was originally selected by the Spartan Council as the most elegant, least overhead solution for sharing fees with SNX LPs while allowing for USDC LPing on Base. The Council wrapped up the month with the Markeb release, which introduced JTO and ORDI markets on Perps V2.

In February, Pyth Retrospective awards were announced, reflecting a commitment to community stakeholder value. There were also some changes made to loan parameters, which included increases in the issuance fee and the interest rate. The goal here was to encourage loan repayment and further strengthen the sUSD $1 peg, which is critical for the healthy function of Perps V2.

In March, Synthetix announced another expansion of Perps offerings adding STRK, CVX, PENDLE, and JUP which went out on the Markab release. Additionally, and in partnership with Synthetix, Kwenta introduced the first V3 integration beta built on the new Synthetix V3 architecture. This integration introduces new features such as native cross-margin and better pricing mechanisms which seek to improve user experience.

👉Grants Council

Q1 2024 Grants Councilors: ALEXANDER, Egor, Mike, MoneyManDoug, synthquest

Watcher Page

We all know the Grants Council has been behind much of the success of the Watcher page in the past, but in recent months they have also been working to improve and update this site in preparation for V3. This included a rework of the UX/UI with additions such as: totals for open positions, filter tabs for closed and liquidation positions, and historical account total trading history.


In addition to their regular Synthetix Discord bot maintenance and payments (recurring bots such as the ETH/BTC ratio and anti-scam Discord bots), the Council also worked on an Arbitrage bot and Discord bots for V3. These V3 bots include ones for volume, burn (which replaced the inflation bot and was updated in February to include all-time SNX burns , in addition to weekly), and soon fees and OI bots.

For the ARB bot initiative, the GC funded an expansion on the existing Synthetix V3 SDK to release the Funding Rate Arbitrage Bot Template, a cutting-edge tool tailored for capturing funding rate arbitrage opportunities between Synthetix and other trading venues. They recognized a growing need for arbs on V3 and were excited to build simple tooling that allows anyone to set up an arbitrage bot by running a few lines of code. This will empower users to automatically search, open, and close arbitrage trades between Synthetix V3 markets and Binance.

This project serves as a template to help newer developers/traders start taking advantage of delta-neutral arbitrage opportunities between CEX/DEX perps platforms. The current version focuses on Synthetix vs Binance pairs, opening funding-accruing positions on Synthetix, and hedging on Binance.

Given that the repo is under active development, it is recommended that you run the bot on testnet for a while first to ensure that the configuration is correct before putting any capital at stake.

Further work will be done to showcase current and historical arbitrage returns, and this bot will live on the Watcher Page. 📈Happy Arbing!📉

sUSD Bridge

This was a big one this quarter — the Grants Council helped bring the sUSD Bridge to Synthetix! After several weeks of work, the sUSD bridge UI (native and instant) went live in March. This now allows transfers between Ethereum Mainnet and Optimistic Ethereum at a guaranteed 1:1 synth transfer, and is accessible through the Synthetix Staking site. This UI leverages a native bridge that the Grants Council created with the Socket bridge aggregator integration. To use this tool, visit the Synthetix Staking UI Bridge.

How to transfer sUSD:

1. Go to the Synthetix Staking UI Bridge site

2. Select either the native bridge or the instant bridge option:

  • The native bridge allows for sUSD transfers between Optimism and Ethereum Mainnet without slippage. Note: transfers through the native bridge will have a 7-day waiting period.
  • The instant bridge, utilizing Socket Tech, supports bridging any asset to any chain with a fee.

3. Initiate the withdrawal

4. Prove the withdrawal (may have to wait a few minutes after initiating)

5. For native, wait 7 days

6. Claim the withdrawal

Notifi integration

If you recall from last quarter, the Grants Council funded this initiative to bring Notifi to the Synthetix ecosystem and help improve staking experience. Types of alerts include: Synthetix Announcements, Liquidation Warning, Liquidation Confirmation, Account Snapshots, Claim Reward Reminders, Governance Updates, and C-Ratio Health Alerts. The GC continues to fund Notifi to allow users to gain direct access to real-time alerts on Discord, Telegram, and email for these reminders. Click here to see how to set up Notifi if you haven’t already!

Integrator Fee Report

Lastly, the GC approved a grant from ML_sudo for an Integrator Fee Report, which is a research effort to determine a suitable rate of fee sharing by the protocol with integrators. Paying too little or too much could result in incentives that are misaligned with Synthetix stakeholders (stakers and token holders). Currently, there is no quantifiable approach to determine a fair and motivating fee split for integrators, so there is a need for better information to help the Spartan Council make this decision for the long term (right now a simple flat 20% fee share is in place on Andromeda/Base).

The goals, therefore, that ML_sudo laid out for this project are to gain clarity on the revenues earned by integrators and propose more nuanced payment structures (e.g. tiered fees).

This report is still in progress, but ML_sudo has held preliminary interviews with 3 frontends already: Kwenta, Polynomial, and Cyberdex.

What’s next for the Grants Council?

Starting in the new governance epoch, the Grants Council will be reconfigured into a single Grants Lead position to make it more efficient and effective for the current and future state of the protocol. This comes from SIP-364, which specifies that the Grants Lead will be appointed rather than voted on by SNX debt share weighting. The SIP also redefines the mandate of the grants initiative to provide greater focus moving forward.

This new Grants Lead will be someone with experience as a technical project manager, and will be appointed by the Spartan Council with a majority 5/8 vote in favor for an ongoing term that can be terminated with the same vote structure. They will coordinate with various governance bodies, as well as the community, to manage and deliver projects within the new Grants scope.

The Grants Lead will be responsible for:

  • Maintaining and setting an appropriate budget for ongoing and one-off projects
  • Coordinating and publishing a summary of open grant requests required by the CCs, SC, TC, and/or community and defining the outputs for these requests
  • Proposing a budget to the Treasury Council to cover ongoing and new Grant requests
  • Conducting due diligence on grant proposals and the work of contractors
  • Establishing criteria for retroactive grant funding across various categories and sharing these criteria regularly to ensure wide visibility by potential recipients
  • Proactively identifying appropriate opportunities that can be addressed by grants
  • Product managing the scoping, development and delivery of valuable initiatives
  • Establishing regular communication with the Spartan Council, including briefs, memos, reports, and voice calls

If this is something that you are interested in, and think you would make a good candidate for, click here to apply by the end of the week! This position will start with the new epoch, as soon as May 1st.

👉Ambassador Council

Q1 2024 Ambassador Councilors: GUNBOATs, Kevin, mastermojo, Matt, Westie

As the governing arm of Synthetix, the Ambassadors remain a constant voice for the protocol. In Q1 they continued to earn governance support and recognition throughout the ecosystem and greater DeFi arena. The Council had three main focuses during Q1:

  • DeFi Governance: Optimism Governance (which involved Token House and Citizen House), as well as other DeFi DAOs (such as Arbitrum, Gearbox, Safe, Lyra, Aave, etc.)
  • Integrator Support: Current & future — Guiding core contributors, integrators, and more through the processes of grants, retroactive funding, and other ways to secure valuable funds
  • Marketing Support: Spartan Spaces & Integrator Spotlights via Twitter

A big highlight for the Ambassadors this Quarter was their assistance and support toward ecosystem partners in the recent Optimism Grants Round (second round is currently over at end of April 2024). Detailed breakdown is listed below where 900,000 OP was secured for Synthetix/Ecosystem Partners.

Now let’s get into a more detailed list of what else the Ambassador Council accomplished this past quarter:

✅ Governance

1. General Governance

The Ambassadors always want to make sure they’re staying transparent with their voting. As always, their activity can be followed through their wallets on Snapshot and Tally.

Voting Activity can be followed using these links:

2. Optimism Governance Forum Activity:

The Synthetix Ambassadors remain a major voice in Optimism Governance, and their respective OP Governance Forum Activities can be found using these links:

3. X/Twitter Engagement

The Council has increased their online engagement even more from last quarter, doubling their number of Governance Update posts on X.

Synthetix Ambassadors Governance Updates:

Synthetix Ambassadors Project Spotlight:

4. Partner Support

Current Partners

  • The Ambassadors have continued to check in on partners and work with them on any feedback, support requests, DeFi grant assistance/guidance, etc.

Future Partners

  • The Council plans to focus on Perps V3 and Synthetix V3 in the next epoch when it comes to future partnerships. They are currently in talks with future partners to build on top of Synthetix Perps either as a frontend or otherwise, and they will be continuing these efforts into the new quarter.
  • They are also monitoring changes to retroactive public goods funding (RPGF), which appears to be fruitful for Synthetix on Base & OP as onchain builders and ecosystem partners.

5. Delegation

This quarter the Ambassadors accepted AJNA delegations and used their voting power to vote for Ajna grants!

✅ OP Grants

A really BIG WIN for the Ambassadors this quarter was the results from Round 1 of Optimism Grants Cycle 19. The notable winners from the Synthetix Ecosystem include:

1. Synthetix for a Mission Request for Best in Class Perps DEX — 400,000 OP: This grant will support the building of an orderbook Perps DEX on Synthetix Perps, featuring an advanced orderbook, multiple order types (e.g., take profit, stop loss), an open-source relayer, and the infrastructure to enforce these trading rules.

2. Thales for a Growth Grant — 200,000 OP

3. Synthetix for a Growth Grant — 200,000 OP: Boost sUSD liquidity and support Perps trading competitions.

4. ERC-7412 Tooling + Education for a Builders Grant — 50,000 OP

5. Synthetix IPFS Node — 50,000 OP

In addition to supporting ecosystem partners in the latest round of Optimism Grants, the Ambassadors are expecting to continue to support many of the same partners in the upcoming round as well. This list includes:

  • Rage Trade
  • Polynomial
  • CoPin
  • Spongly
  • Thales
  • OP Indexer (from Polynomial)
  • Toros
  • dHedge
  • Valio
  • TLX
  • Strands
  • Ammalgam

Currently, OP grants cannot be used on Base, but the Council is working with delegates and the OP foundation to make this possible.

✅ Spartan Spaces

Spartan Spaces continued to serve as important community marketing tools this quarter, with the Ambassadors hosting a couple of other DAOs on behalf of Synthetix.

1. Polynomial (Length: 45 minutes)

2. Pyth (Length: 1 hour)

✅ Synthetix Governance Proposals

The Ambassadors only had one Synthetix Improvement Proposal (SIP) that they authored this quarter, but it was a quickly approved one:

1. SIP-2054: List PENDLE on SNX Perps V2 (author: GUNBOATs)

What’s next for the Ambassadors?

In the next quarter, the Ambassador Council will be focusing on the following:

  • Obtaining more Arbitrum delegations and expanding into Arbitrum governance
  • Other DeFi DAOs (Lyra, Gearbox, Safe, etc.)
  • Integrator support: helping CCs and integrators with grants, retroactive funding, etc.
  • Continuing marketing support
  • Pursuing further growth strategies for Perps and Synthetix V3
  • Exploring opportunities to scale synth supply
  • Increasing presence in Optimism governance (Optimism Token House, Citizen House, Grants, RPGF)
  • Expanding influence in DeFi & DeFi Governance

👉Best Memes from Q1

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