SNXweave Weekly Recap

October 12, 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.

Present at the October 6, 2022 Spartan Council Weekly Project Sync:
Spartan Council: Adam, Afif, Burt, Danny (dsacks), ksett, nana, TerraBellus
Core Contributors: Cavalier, David, KALEB, Leo, meb, Mike, noah, Steve, sunny

We made it through the first week of the epoch! All of the new Councils are in full swing, so let’s talk about what they were up to last week. The SIP to update the SNX liquidation functionality is still in audit, but is expected to be wrapping up shortly. The final stages of feedback are being incorporated, after which SIP-252 will move to implementation.

The Direct & Curve Integration SIPs are also code-complete and currently in testing. These are scheduled to go out on the release with SIP-252, assuming all of the testing goes well. As for Staking V2, much of the front end is complete, so stakers should be looking for the new UI over the next 2 weeks.

An early V3 testnet release is also expected in the next week or so. The SIP presentations are picking back up again to get the rest of the upgrade through governance — a couple of them happened yesterday! During the call last week Adam asked why sUSD can’t be issued in both V3 and legacy markets, and Noah explained that they need to be able to distinguish how much debt V3 has issued.

Last week there were also a few SIP presentations, so let’s briefly review them:

SIP-280: PerpsV2 (Perps Upgradability)

  • This SIP proposes adding upgradability capabilities to the current Futures implementation as a first step to add new features to it
  • Leo explained that the current Futures contracts are immutable and, in order to add new features to it or fix a bug if discovered, there needs to be the option of upgradability
  • Ksett asked: If they’re not currently upgradable, how do you add that functionality? — Leo said they are currently testing alternatives to migrate data from the current futures site to the new contracts

*Then Kaleb asked what this migration process will look like — Leo explained that individual open positions would have to be moved over, and they are considering freezing the positions and asking users to move them over themselves

SIP-281: PerpsV2 (Trading fixes & improvements)

  • This SIP improves the underlying mechanism of next price orders to be time-oriented and take further consideration into maker/taker fee calculations when a trade flips the market skew
  • Afif explained that there would be 2 major changes: delayed orders and cross side maker/taker fees

1. Delayed order

  • Current next price orders are non-deterministic and give way to suboptimal user experience for traders
  • If the intent is to minimize frontrunning, the same can be achieved through a time-based delay

2. Cross Side Maker/Taker Fees

  • Order fee calculations in the current state do not behave correctly in the scenario where a trade is both a maker and a taker

SIP-279: Perps V2

  • This last SIP proposes a redesign of the Synthetix perpetual futures mechanism to enable unconstrained open interest limits, broader asset compatibility, and low fee execution
  • Main upgrades:

— Premium/discount pricing function: Simpler implementation of SIP-181 (simulated liquidity) — puts a soft limit on how much skew can exist in the market

— Funding rate velocity-based: Instead of fractionalized skew being directionally proportional to the funding rate, this update proposes that it would represent the funding rate velocity (rate of change of the funding rate) — this is much more predictable funding rate behavior

— Plans to move to on/off-chain hybrid oracle that could yield better performance

  • Afif explained that a common theme of this SIP is wanting Futures markets to be as low risk as possible for whoever is underwriting them, which creates the most scalable perps markets in DeFi

He also said Perps V2 is expected to be in audit by late October, and on Mainnet sometime in November!

Present at the October 6, 2022 Grants Council meeting:
Grants Team: CT, cyberduck, JVK, Max

In Grants Council updates, the team has a new member — Core Contributor (CC), Max! He is currently living in Europe, joined Synthetix as a CC in October of last year, and has also been at AAVE for a year. He is a frontend developer and has recently been experimenting with solidity a bit. The rest of the Council gave him a concise TLDR briefing of what the grants role entails, how the team operates, and the current projects and initiatives.

Duck brought Max up to speed on the objectives of the NFT project and explained where things currently stand. There will be 10,000 NFTs released, and there are currently ~30,000 stakers, so the team is trying to figure out when the snapshot of active stakers should be for the whitelist. Duck brought up the idea of potentially scaling the minting cost based on demand to try and capture as much of that initial demand as possible, since the proceeds will be used for public goods.

As for the Stats page, the data is currently being validated but the team was confident it was close to being ready for release. Cavalier has identified some issues with it that may have unfortunately set the project back a bit. They are currently considering several options for correcting the problems with the data, and this is actually a perfect place for Max to step in and leverage his development expertise to help work out the best way to proceed.

Lastly, the Council discussed the possibility of V2 of the SIP/SCCP Submission Site that has the option to edit existing proposals. It’s not a high priority right now, but they may revive it later in the epoch if there is demand and funding available for the upgrade. Currently, they are more focused on bringing as much visibility as possible to the site.

Present at the October 4, 2022 Ambassador Council meeting:
Ambassadors: GUNNBOATs, Kevin, mastermojo, Matt, MiLLiE

In Ambassador Council updates, the new team of FIVE is operating in full swing! GUNBOATs is a returning Ambassador, but Kevin is serving his first term. The new Council hosted another Spartan Space last week, this time with Velodrome.

We got to hear from Alex and Tao: Alex is one of the founders, who mostly focuses on business development, marketing, and operations. He started mining crypto at home during the pandemic and instantly was hooked. Tao is also a founder and has a background in economics and finance. He was working in tech before he moved over to the holy land of web3. ;)

As a brief background, Velodrome launched at the beginning of June as a DEX AMM solution to properly incentivize protocol liquidity. Alex said it’s a “protocol’s protocol” that’s meant to incentivize active liquidity. He added that many protocols have been having issues building deep liquidity on Optimism, and Velodrome addresses that need. And they actually just hit $2 billion in volume due to the extremely low fees!

“The reason the fees are so low is because we built this as a public good. The biggest measure of success for us is we were brought here to solve a problem for the ecosystem, and we believe we are helping to solve it.” -Alex

They didn’t really know what to expect at first, as they were the first fork of the Solidly model that the team felt really addresses the issues from V1. Many previous attempts to incentivize liquidity delivered short-term TVL spike, but dropped significantly once the incentives were gone.

The Ambassadors asked the guests how successful Velodrome’s airdrop was in onboarding and maintaining protocols. Alex first elaborated that veNFT positions were not only distributed to current leading protocols on Optimism, but also to protocols not deployed on Optimism yet. He added that, after receiving an airdrop, some of these protocols that are deployed on other chains then have started to deploy on Optimism. Velodrome has onboarded 31 new protocols to Optimism so far!

Lastly, the guests left the audience with a quick roadmap to look forward to:

  • Continue to onboard partners
  • Continue to make improvements to the dApp UX
  • Continue driving protocols to deploy on Optimism

Overall it was a great call, so don’t forget to catch the recording if you missed it!

SIP-252: Liquidation of SNX Escrow, Status: approved

SIP-267: Direct Integration, Status: approved

SIP-268: Curve Integration, Status: approved

SIP-280: PerpsV2 (Perps Upgradability), Status: draft

SIP-281: PerpsV2 (Trading fixes & improvements), Status: draft

SIP-279: Perps V2, Status: draft

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