The Andromeda Release marks a significant advancement for Synthetix, featuring the deployment of Core V3 and Perps V3 simultaneously, the addition of new collateral in the form of USDC, and deployment on a new blockchain, Base. This release will propel Synthetix into a multi-chain protocol, leveraging the capabilities of the Optimism Superchain.
This initial rollout combines Core V3 and Perps V3, aiming to attract new developers, liquidity providers, and community members to the Synthetix ecosystem.
The Andromeda Release is underpinned by several SIPs, which provide detailed technical specifications for this update. These include:
- SIP-336 - Deploy Synthetix V3 Core on Base
- SIP-338 - Deploy SNX token via Base Bridge
- SIP-337: Perps v3
- SIP-346: Perps v3 Integrator Incentive (20% fee share for integrators)
- SIP-348: Enable USDC for Andromeda on Base
- SIP-345: Buyback and burn SNX on Base (40% fee share for SNX via buyback and burn)
Building on the success of Synthetix Perps
Synthetix Perps V2 achieved remarkable success, generating over $35+ billion in trading volume, attracting tens of thousands of unique traders, and accruing over $25 million in fees for SNX Stakers.
Building on this foundation, Perps V3 introduces several upgrades to improve the trading and developer experience:
- Cross Margin: Allows traders to open multiple positions across different markets, subject to a limit of one position per market. The account margin value fluctuates based on the PNL of each open position.
- Multi Collateral: Supports multiple collateral types, currently limited to synths registered with the V3 spot market. This is expected to include USDC, sUSD, sETH, sBTC, and other governance-approved spot synths.
- Account-Based Access Controls: This feature enables the delegation of account permissions, such as modifying collateral and managing positions, to additional addresses, enhancing extensibility and composability.
- Liquidation Improvements: Implements gradual, non-sandwichable liquidation of large positions, with configurable delays between partial liquidations.
- Deterministic Settlements: Improves the settlement process to ensure that the execution price is the earliest valid price post-commitment, minimizing the impact of network congestion.
Integrating partners like Polynomial, Kwenta, Infinex, dHEDGE, and many others, have confirmed their deployment to Base, underscoring their crucial role in the upcoming success of Andromeda and Perps V3.
The Essence of Testing in Andromeda
The Andromeda Release serves as a testing ground for new developments. The introduction of USDC as a new collateral type on a new chain presents several areas to explore. Key aspects under testing include:
- USDC as Collateral & Demand on Base: Assessing the impact of USDC collateral on liquidity and stability.
- Demand for Trading Perps & Derivatives on Base: Evaluating the shift of traders from CEXs and other chains to Base.
- USDC Wrapper: Evaluating the impact of simplifying trader interactions by using USDC in front-end integrations and wrapping it into sUSD for backend Synthetix contracts.
- Sensitivity to Fee Share: Analyzing the response of USDC LPs and SNX stakers to variations in fee share percentages, alongside integrator responses to integrator fee share.
- Seamless Integration: Monitoring the feedback from integrators regarding Core V3, Perps V3, trader experience, and LP experience.
Isolation of the Andromeda Release on Base
The Andromeda Release on Base is an isolated deployment, meaning it will not be connected to the Optimism/Ethereum Mainnet V2X system. This separation enables distinct testing and development in Andromeda, allowing for direct comparisons with the existing Optimism Perps V2 deployment.
Additionally, this isolation necessitates the SNX buyback and burn as the model of distributing fees to SNX holders. As per SIP-345, the fee share has been set to 50%.
Defining Success for Andromeda
Success in the Andromeda release will be measured by:
- Stable and Efficient Market Operations: Ensuring seamless functionality of the perps market and effective utilization of USDC as collateral.
- Robust Liquidity Provision and Trading: Maintaining strong liquidity and active trading using Perps V3.
- Positive User Experience: Facilitating smooth and efficient transactions for LPs, traders, and integrators.
Initial Rollout: What to Expect
The initial deployment of Andromeda on Base is tentatively scheduled for December as a mainnet alpha with limited capabilities that will progressively increase before a public launch. This phase will include the launch of Core V3 and Perps V3 on Base with USDC as collateral and USDC usage for traders using Synthetix Perps.
Andromeda: LP vs Trader Perspective
The Andromeda experience differs for Liquidity Providers (LPs) and traders:
- For LPs: The introduction of USDC as collateral offers new opportunities for liquidity provision and fee generation. The LP (aka staker) experience will be improved through new integrations from dHEDGE/Toros that auto claim and auto compound rewards for LPs.
- For Traders: Enhanced trading experience with Synthetix Perps, augmented by the inclusion of USDC for greater flexibility. Traders will get to utilize the partners they know and love, including Kwenta, Polynomial, Infinex, and many others, to access Synthetix Perps.
The Future of Synthetix with Andromeda
The Andromeda release represents a transformative step for Synthetix, aiming to reinforce its position as a cutting-edge DeFi protocol. It brings expanded collateral options, improved trading experiences, and innovative features. The community’s involvement in testing and governance will play a crucial role in guiding Synthetix’s future multi-chain plans.