Synthetix Referendum Town Hall Review

SNXweave -

September 30, 2024

The following post contains a recap of last week's Town Hall regarding the recently proposed Synthetix Referendum: A Synthetix Reboot. Community questions and answers are also reviewed below.

👉TLDR

  • This past week, Fenway held a Town Hall (recording here) to discuss a referendum being proposed through Synthetix governance
  • Motivation behind this referendum included:
    •  Governance failings
    • Inefficient development
    • Limited marketing efforts
    • A lack of direction
  • To address these shortcomings, the referendum proposes a roadmap refresh and an overhaul of the protocol’s governance and organizational structure.
  • What now?
    • Referendum vote is live as of September 27th, and will last for 1 week
    • Fenway will be active in Discord and on Twitter for questions and discussion
    • Another town hall will likely be held this week once everyone has had a chance to digest — be on the lookout for a possible vote to decide when to hold this call

A referendum has been proposed for Synthetix governance by Fenway, highlighting a number of changes to the current DAO structure, operations, and recommendations for SNX moving forward. This past Thursday there was a Town Hall in Discord (recording here) where Fenway reviewed this referendum in depth and allowed time for community questions. We will be recapping the Town Hall in this blog post, so let’s get started.

Starting out, Fenway introduced himself: he has followed Synthetix since the early Havven days and is passionate about this project. He is proposing this referendum because he believes the changes will allow Synthetix to thrive again and thinks it’s important that this issue be a referendum because it opens the vote to the token holders, who are the ultimate stakeholders.

Recent Shortcomings

Fenway detailed some missteps that he has identified in the way that Synthetix operates, including:

  • A lack of clear coordination and structure
    • Synthetix does not have a defined roadmap for the next 1–2 years.
    • Councilors often vote on proposals without giving much consideration toward a broader strategic plan.
    • Having team members from different time zones causes a decrease in accountability, innovation, and output.
  • Poor execution of major initiatives
    • Delays have caused missed opportunities and prevented full capturing of market narratives, user attention, and product adoption.
    • There is not enough consideration toward economic drivers during product development, causing fee models that are not optimal for long-term project sustainability and several missed opportunities for Synthetix to access grants for work (i.e. the 900k ARB grant that was lost).
    • Launches have been too low-energy, resulting in low fees and low incentives for new investment in the Synthetix ecosystem.
“This referendum outlines a plan to reset, update and reinvigorate the project through streamlining governance, increasing accountability, improving transparency, revitalizing culture, and aligning key stakeholders.”

Short-Term Changes

Fenway went on to explain that the following 4 core short-term changes are necessary to solve these issues:

1. Roadmap refresh

In parallel with this referendum, a 2025 vision has been proposed. Should this referendum pass, a streamlined communication plan will be designed to share Synthetix’s clear vision, roadmap, and core messages with the broader crypto community. The focus will be to go to market with a succinct message to increase awareness, attract additional integrations and further engrain Synthetix across the crypto ecosystem.

2. New governance model

The referendum proposes dissolving the 3 Councils (Spartan, Treasury, and Ambassador) and instead having 1 Spartan Council made up of 7 seats with equal voting power — 4 elected and 3 hired Core Contributors (CCs). His proposed nominees to fill these seats for the new founding Spartan Council are:

1. Treasury Seat: coKaiynne

2. Advisory Seat: Kain Warwick

3. Advisory Seat: Jordan Momtazi

4. Advisory Seat: Spartan Glory

5. CC seat — Strategy: Fenway (Benjamin Celermajer)

6. CC seat — Ops: Cavalier

7. CC seat — Technical: TBD

If this referendum passes in the token holder vote, these proposed nominees will be voted into their new positions, should they accept the nomination.

Other proposed changes for this governance overhaul are as follows:

  • Synthetix will remain a DAO that the SNX token holders govern.
  • The Treasury Seat and the 3 Advisory Seats will be elected by governance voting.
  • All SIPs, SCCPs, STPs, and Treasury Transactions will be signed by the new council with a required threshold of 4/7 signatures for approval.
  • The Treasury Seat will also be a required signer of all STPs and Treasury transactions.
  • The Strategy, Technical, and Ops seats will be hired by the elected seats and will form the leadership team of Synthetix. This ensures the council has full project context when making decisions, helps maintain project consistency across epochs, and ensures a point of ultimate accountability for the progress of Synthetix.

3. Organization of working streams

Core working groups will be defined and formed, as Synthetix will require several functions such as sales, customer support, analytics, development, etc. with the proposed changes in this referendum.

Each working group’s function, roles, and responsibilities will directly align with the Synthetix 2025 vision. Importantly, working groups will be held accountable for the delivery of core workstreams and report to the new Spartan Council.

As previously mentioned, Fenway also believes that projects with team members from different time zones have decreased efficiency. Therefore, working group members will be co-located in the same time zone(s) to create an environment where team culture can grow, turnaround and iteration of work is rapid, team cohesion is strong, members become more accountable to one another, etc. One working group will be hired and operate out of Sydney, Australia with Fenway’s oversight.

4. Formation of a Synthetix foundation

This will enable Synthetix to:

  • Sign contracts with partners, potential integrators, and investors
  • Have a contracting entity for domain services, cloud services, and email services
  • Engage with smart contracts that require a signing entity for KYC/AML
  • Take receipt of partner incentives that require a receipt from a signing entity
  • Etc.

This is simply aligning with a modern DAO approach that has been adopted by the vast majority of ‘new’ and many existing crypto projects.

Vision Going Forward

Next, Fenway went over his vision going forward if this referendum were to pass:

  • SNX token redesign
  • Operationalized SnaxChain
  • Restart work on Synth Teleporters
  • Increased focus on business development and marketing
  • Perps V3 feature expansion & V2X deprecation
  • V3 perp multichain proliferation

What Now?

  • Referendum vote is live as of September 27th, and will last for 1 week
  • Fenway will be active in Discord and on Twitter for questions and discussion
  • Another town hall will likely be held this week once everyone has had a chance to digest — be on the lookout for a possible vote to decide when to hold this call

Q&A from the Community

Below are questions that were asked by community members during the call, along with Fenway’s answers to each question.

Q: How will this proposal create more accountability? More than half of the people proposed for the new Council aren’t on this call.

  • A: Fenway reiterated that this is just a proposal and that many of the people nominated have yet to see it. He also explained that while they may not be in Discord every day or on every call, these people were chosen due to their reputation within the community and ability to put Synthetix at the center of important discussions. He agreed, however, that it’s important that they participate in community calls and that they stay up-to-date on what’s going on so that they remain accountable to the community, but he views these as more of a strategic role.

Q: Why is voting not limited to staked SNX?

  • A: The reason for this is twofold:
    • Fenway believes that non-staked individuals are community members.
    • He is also strongly of the opinion that staking should be more about capturing a share of protocol revenue than governance.

Q: How is consolidating power around 4 individuals expected to solve many of Synthetix’s problems?

  • A: Fenway agreed that 4 elected members & 3 members hired by the elected can potentially consolidate power around 4 people. But they would only be elected for an epoch. He added that, in theory, whales have the most at stake in this project so you would hope that their intentions are well-aligned anyways.

Q: I generally think we should move step by step when we make any changes. I could agree with adding hired members on top of what we have now so we can weigh this decision’s effectiveness, but changing the entire governance structure can cause unpredictable effects — some of which are positive and others negative, making it extremely difficult to identify what worked and what didn’t.

  • A: Fenway thinks big change has to happen and it has to happen quickly — a step by step process would likely be too slow for real change.

Q: You mentioned 4 pillars on which your proposal stands. What if people agree with some but disagree with others? Isn’t it counter-productive to offer them all in a single vote?

  • A: Fenway again emphasized that he thinks change has to happen now. If this current referendum is voted down, then he will come back with an updated one and propose it again.

Q: Why do you think it’s necessary to consolidate councils? Ambassadors do a lot of work like being delegates to other major protocols (Optimism, Kwenta, TLX, Arbitrum, etc.), being the voice of Synthetix, working on and proposing many SIPs, and helping raise awareness for integrators. Do you think these functions are not important or will they be migrated to the new Council or to full-time CCs?

  • A: Fenway emphasized that everything the Ambassador Council does is very critical, and he thinks it’s therefore more of a full-time hired role than a part-time Council role. So he really sees this governance change as a merging of the Spartan and Treasury Councils and a deprecation of the Ambassador Council, but maintaining that role as a work group within the CCs or external to the CC structurally.

The Town Hall ended with an urge for community conversation and a call for voter participation — so be sure to discuss the referendum as much as possible in Discord, review the full proposal, check out the 2025 vision, and ultimately cast your vote here.

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