Synthetix V3 is live on Arbitrum

Synthetix -
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Starting at 9pm EST on June 18th (1am UTC, June 19th), users can earn LTIP rewards by depositing USDC, ETH, and ARB as collateral on Synthetix V3 on Arbitrum.

Synthetix has launched on Arbitrum, bringing V3 to the network. This is the first of many stages to fully integrate Synthetix's liquidity layer and support Synthetix-powered Perps V3 & derivatives on Arbitrum.

V3 on Arbitrum offers users several areas to earn rewards, contribute collateral to the network, and borrow against their collateral:

  • Earn ARB rewards by providing collateral (ETH, ARB, and USDC at launch), with trading fees earned once Perps trading is live.
    • Ethena sUSDe/USDe, Etherfi weETH, Lido wsteth, and AAVE lending tokens to follow soon after.
  • Mint (borrow) an Arbitrum-native Synthetix stablecoin against deposited collateral.
  • Earn additional ARB incentives for trading Perps and providing liquidity for the Arbitrum-native stablecoin USDx on supported Arbitrum DEXs.

Liquidity Provision and Incentives

Starting at 9pm EST on June 18th (1am UTC, June 19th), users can earn LTIP rewards by depositing USDC, ETH, and ARB as collateral. Additional yield-generating collateral options, such as Ethena's sUSDe/USDe, will be enabled soon.

Depositors can directly mint USDx, Synthetix's new Arbitrum-native stablecoin, through the liquidity frontend.

Collateral Depositing (aka LPing) is live, and Liquidity Provider incentives begin today. Perps trading will be enabled once specific LP milestones are reached, as detailed in the Deployment & Growth Plan below.

Deployment & Growth Plan

The deployment will progress through three key milestones:

Milestone 1: LP Ramp-up & Liquidity Launch (Week 1)

  • Synthetix will focus on attracting a critical mass of LP collateral on ARB, USDC, and ETH.
  • Once total LP collateral scales to 10-20m, the platform will be ready to launch perps trading.

Milestone 2: Ethena Asset Support (Week 2-3)

  • Enabling Ethena assets sUSDe & USDe as collateral.
  • Support additional yield-generating collateral from Lido, Etherfi, and AAVE.

Milestone 3: Enabling Synthetix Perps & Yield-Generating Collateral (Week 3-4)

  • Contingent on LP scaling, Synthetix will enable the Synthetix Perps market.
  • Trading rebates will begin in 4-6 weeks, gradually enabling trading activities with limited open interest to manage risk.

Key Differences for the Arbitrum Deployment

Multiple Collateral Types

The Arbitrum deployment will utilize a variety of collateral types, including USDC, ETH, ARB, sUSDE (Ethena), USDe (Ethena), and yield-generating collateral (e.g., Aave lending tokens). Initially, users can deposit the following assets as collateral:

  • ETH
  • USDC
  • ARB

In the coming weeks, additional collateral types like Ethena sUSDe/USDe, Etherfi weETH, Lido LSTs, and Aave lending tokens will be added, showcasing Synthetix V3's potential to support any ERC-20 token with an oracle, approved by governance.

Borrowing & The Arbitrum Native Stablecoin - USDx

Since Synthetix V3 is, at its core, a CDP system, users can borrow the Arbitrum-native stablecoin (USDx) against their collateral. Users can use this stablecoin to interact with Synthetix Perps, provide liquidity on Arbitrum DEX protocols (liquidity integration coming soon), and participate in lending protocols. Traders will need to obtain this stablecoin when interacting with Synthetix Perps. By borrowing against their collateral, users can access additional capital while earning rewards from their collateral in the Synthetix V3 system.

Note: USDx is an Arbitrum-native stablecoin isolated to the V3 deployment on Arbitrum. It is not fungible with the sUSD used in the Synthetix V2x system on Optimism and Ethereum Mainnet.

Incentives and Fee Distribution

Synthetix will offer substantial incentives from its LTIP grant to support the growth of Synthetix V3 on Arbitrum:

  • 1m ARB for LP incentives, starting today
  • 900k ARB for trading fee rebates
  • 100k ARB for stablecoin liquidity incentives

The fee distribution for the Synthetix Perps v3 deployment on Arbitrum is as follows:

  • Liquidity providers will earn 40% of the fees generated by Perps + 100% of LP incentives from the ARB LTIP program.
  • Integrators will earn a 20% fee for trades processed through their integration.
  • The remaining 40% will be sent to the SNX buyback and burn contract.

Synthetix Perps V3 on Arbitrum

Synthetix Perps is a fully on-chain, decentralized, and delta-neutral perpetual futures trading platform. It utilizes off-chain oracles from Pyth for accurate pricing. It has proven its robustness, generating over $50 billion in trading volume on Optimism and Base, resulting in tens of millions in delta-neutral fees for liquidity providers.

Once multi-collateral Perps margin is enabled, Synthetix Perps can support yield-generating collateral and cryptocurrencies such as Ethena sUSDe/USDe, WBTC, ETH, and more as a margin. This feature will provide traders with increased capital efficiency and flexibility.

On Arbitrum, Synthetix Perps will launch once a critical mass of LP collateral is achieved, ensuring the platform can quickly support deep open interest for crypto assets.

Conclusion

The Synthetix V3 deployment on Arbitrum marks an important milestone in expanding the protocol's multi-chain strategy. By offering multiple collateral types, introducing an Arbitrum-native stablecoin, providing significant incentives, and launching LP incentives today, Synthetix aims to solidify its presence and utility for users on Arbitrum.