SNXweave Weekly Recap
January 25, 2022
The following post contains a recap of news, projects, and important updates from the Spartan Council and Core Contributors, as well as the Grants Council and Ambassador Council from last week.
Time to take a break from watching the charts and get some much-needed Synthetix updates, wouldn’t you agree? Same here, so let’s get into it.
Spartan Council and SIP updates
Present at the January 18, 2022 Spartan Council Weekly Project Sync:
Spartan Council: Afif, BigPenny, bojan, jj, Kain, KALEB, redmarglar, TerraBellus
Core Contributors: Cavalier, Rafa
We have a new Core Contributor on our team! He goes by Cavalier in Discord and has experience as a product manager. He will be helping to shape the weekly sync calls from now on, and will disseminate the v2x roadmap information from the Core Contributors to the Spartan Council. Welcome, Cavalier!
And speaking of roadmaps…Kain posted his very own “bootleg former semi-benevolent dictator version” of a L222 Roadmap on his Mirror blog earlier today. So be sure to give that a read here if you haven’t already! 2022 sure has a lot in store for Synthetix. 🚀
In case you missed it, the Peacock release went out last week. This release included SIP-200, which fixed the FeePool rewards distribution. This has been an issue for a little while, as it was initially reported by a white hat hacker, but it has finally been resolved.
During the weekly sync, the Spartan Council had a discussion regarding whether or not SCCP-163 to update Optimism Chainlink oracles to OCR should be a SIP. JJ said it should remain a SCCP because it only amounted to a configuration change. Kaleb agreed, arguing that a SIP would require a meeting and the changes in this proposal don’t really require one. Kain countered this saying OCR adds possible risk, so it might be worth presenting and discussing it further as a SIP. Kaleb refuted this saying that SCCPs are for variable changes and SIPs are for Synthetix contract changes. Everyone agreed with this reasoning — since this was not a Synthetix contract change, there was no reason to make it a SIP.
Next, there are several SIPs currently scheduled to go out on the upcoming release, Alsephina. These include:
- SIP-184: Dynamic Exchange Fees - This SIP affects both Futures and phase 2 of v2x. The Core Contributors are working hard to get the code through hopefully this week.
- SIP-193: Refactor SystemSettings into Library to reduce contract size - This SIP has been approved and is code-complete.
- SIP-196: Remove Centralized Oracle - This SIP was voted on last week and approved with all 8 Council members voting in favor. It is currently in audit.
- SIP-199: Add SOL Synth on Optimism - This SIP was also approved last week with 8 votes in favor.
As for Futures, JJ said the auditors are aiming for mid-February, which would push the release to early March since the team will be at ETHDenver, followed by a global Synthetix off-site. Kain, however, said he is hoping for a deployment during the off-site.
Redmarglar asked for some clarification on the difference between the alpha and beta versions of Futures. JJ explained that the alpha will just be something to experiment with, and the beta will be a fully live beta version deployed on Mainnet L2. Kain added that there is a lot of parameterization that needs to be tested, and that the initial launch will happen with very tight caps while data is collected and analyzed. Then, these ‘restraints’ can be removed and the final release will happen.
As for phase 2 of v2x, Debt Shares is a very critical piece of work, as it is a dependency for most of phase 2. The trickiest component of Debt Shares is how the debt is migrated. However, once it’s in, the focus can shift to the debt pool synthesis, liquidation mechanism upgrade, synth teleporters, and debt migration. The Debt Pool Synthesis SIP, which combines the ETH and Optimism debt pools into a single debt pool, is actually being presented today so be sure to tune in or catch the recording!
Speaking of the liquidation mechanism upgrade, this proposal was actually presented last week. This SIP proposes a modification to the existing liquidation mechanism, that is defined in SIP-15, with a purpose of reducing the likelihood of cascading liquidations that might lead to a destabilization of the stability mechanisms. This SIP aims to more heavily incentivize stakers to act in the best interests of the system during times of stress. It will also remove forced liquidations at inopportune times and encourage insolvent stakers to explore other options, such as self-liquidating in order to avoid costly penalties.
Lastly for Spartan Council updates, there was discussion of the recently rejected SIP-197 to bypass SIP presentations in emergency situations if the SIP has unanimous consensus. There was a practical concern raised that this SIP would be unsuitable for meeting its urgency if a Council member is out for any reason. Even though this SIP was rejected, V3GM will actually replace the need for it altogether in the next couple of months.
Present at the January 20, 2022 Grants Council meeting:
Grants Team: beachmom, CT, cyberduck, joey, Mike
Moving on to Grants Council updates, the Council members met with the Universe team again to further discuss design elements of the NFTs. They are still trying to nail down timelines, but believe the team is moving in the right direction now.
For the Tools site, the Grants Council has found an app developer who is building the site and estimates its completion around the beginning of February. The developer will set up a staging environment so that the Council can test the content before it goes live.
As for the possible hackathon, the Council has decided on the type of package they wish to proceed with, and they are now discussing the budget. We should hopefully hear more details about this grant soon as the Council irons out all of the features with the team that proposed it.
Present at the January 19, 2022 Ambassador Council meeting:
Ambassadors: GUNBOATs, Matt, MiLLiE
In Ambassador Council updates, the Ambassadors hosted another Spartan City Hall last week — this time with Gearbox Protocol. We got to meet Mikael, Ivan, and Ilgiz, who went pretty deep into the technical details of Gearbox, so let’s summarize some of these details.
Mikael is the founder of Gearbox and explained that the protocol was a finalist at the MarketMake ETHGlobal hackathon in February of 2021, and they were able to maintain this traction after the hackathon. Millie asked him to elaborate on how the idea for Gearbox came to be, and he explained that the main question they aimed to answer was how to make a leveraged trading platform with pools that would also be compatible with Uniswap. Essentially — “leverage as a service.” It started out as just a Uniswap service, but the team discovered that it could be applied to any DeFi protocol. You can actually currently use Gearbox to trade with leverage on Uniswap.
Mikael also explained the idea of credit accounts, breaking Gearbox down into two sides: liquidity providers seeking APY and leverage takers. When leverage takers deposit initial funds to take leverage, credit accounts (basically just isolated contracts or wallets) allow the user to control financial orders from this account, but do not have direct access to the funds while the position is open. And credit account funds can only be used with whitelisted protocols.
Fast forward a bit, Spreek asked the guests how they approach the math involved when going from an oracle price to a derivative of that price. They explained that Chainlink price feeds limit the assets that can be added to the system, so the solution they came up with takes prices per share from Yearn and multiples it by the Chainlink price. Right now it doesn’t require a lot of gas, but that could change if they decide to add more complex LP tokens. Research is ongoing by Gearbox and other protocols to resolve this.
Spreek also brought up the fact that many SNX users have been asking if there is a way to access leverage in the system. The guests said that there wouldn’t really be any additional risk associated with synthetic assets since they mirror the actual price 99.99% of the time. But they would need to do additional research for assets that are not represented as ERC-20 tokens to assess the volatility.
Millie then brought the conversation to the DAO-side of Gearbox, asking our guests what their original vision for the DAO was. They said, initially, the DAO was launched as a regulatory concern before the product went live. But later, they were able to give the community and DAO ownership of the protocol. Mikael expressed that they really want to achieve a truly decentralized organization that will be controlled by the token holders.
Lastly, GUNBOATs chimed in asking if they are planning to deploy on Layer 2. Ivan said there is really no downside or objection to them deploying on L2, but since Gearbox has composability in its nature, this means it relies on other platforms being live on whatever chain it is on. It will also ultimately be up to the DAO to decide. Mikael added that preparing a protocol to deploy on another chain is an interesting challenge, and you can really identify some inefficiencies in doing so. But from just this hour we had with our guests, it sounds like they are most certainly up for the task! We’re definitely looking forward to seeing what Gearbox has in store in the future.
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SIP/SCCP status tracker:
SIP-200: Fix FeePool Rewards Distribution, Status: implemented
SCCP-163: Update Optimism Chainlink Oracles to OCR, Status: draft
SIP-184: Dynamic Exchange Fees, Status: approved
SIP-193: Refactor the SystemSettings into library to reduce contract size, Status: approved
SIP-196: Remove Centralized Oracle, Status: approved
SIP-199: Add SOL Synth on Optimism, Status: approved
SIP-80: Synthetic Futures, Status: feasibility
SIP-185: Debt Shares, Status: vote pending
SIP-165: Debt Pool Synthesis, Status: feasibility
SIP-148: Upgrade Liquidation Mechanism V2, Status: SC review pending
SIP-197: Bypass SIP Presentation, Status: rejected