SNXweave Weekly Recap
January 11, 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 January 6, 2022 Grants Council meeting:
Grants Team: beachmom, CT, cyberduck, Mike
Do you want to be involved in the stats page brainstorming? Then be on the lookout for a typeform link coming any minute now where you can rank various data points on a scale of 0–10 to help the Grants Council decide what to put on the stats page website!
The Council is also still working on the Synthetix tools site, and is coordinating with the designer to draw up a final design for review. Once agreed upon, this will be formally submitted as a grant request and voted on for further development.
Lastly, the NFT project is still chugging along. As a reminder, The Grants Council is partnering with Universe.xyz to release a Synthetix-branded NFT drop. The focus for the next month is to nail down and finalize the designs, so that they can move to the next stage of actually getting closer to a mint event. Universe is also expected to deploy a marketplace on both Mainnet and Optimism, so they will likely be the main competitor of OpenSea.
Present at the January 4, 2022 Ambassador Council meeting:
Ambassadors: GUNBOATs, Matt, MiLLiE
The Ambassadors hosted another successful Spartan City Hall last week with Across Protocol. We got to hear from Chandler, Matt and John who explained how Across works in depth. Check out the recording here!
All three of our guests work at UMA protocol and explained that Across was created by UMA with the full intention of handing it over to the community. Chandler explained that what Across is really trying to solve, from an infrastructure point of view, is to be a really fast and cheap bridging solution. And they believe that this kind of infrastructure needs to be open and permissionless for anyone and everyone to use and develop.
Matt added that Across thinks about bridging in a slightly different way than other protocols that tend to just have mint and burn systems. Across is more of a lending protocol, since it is purely a system for making sure you get your money quickly through its lending pool strategy. Right now, Across offers L2 and L1 transfers. You basically have large pools on L1 where people are willing to lend you the money while these slower L2 to L1 transfers happen. Comparing the model to Aave or Compound, Matt explained that their model allows you to not have to go through AMMs or trading fees — you just pay a rate based on how long it’s going to take those tokens to get over. This is especially good for moving really large amounts of liquidity.
Millie then clarified with our guests that there are three roles at Across: the liquidity providers (LPs), who are basically on Layer 1 in a lending pool, the end users who want to send funds, and the “relayer” — which Millie asked them to touch on more. Matt gave a very concise explanation of the relayer role, explaining that you could technically relay the funds yourself, but it would take a long time. So to make the process easier, there are these third party relayers, to whom you pay a small fee for doing these transfers and for paying your gas fees on L1.
There are actually two types of relayers: slow and fast.
- Slow relayers basically go and tell the pool about your loan request, then you have to wait about 2 hours for disputers to check that there is actually an L2 deposit that corresponds to this relay.
- Fast relayers, on the other hand, will verify it themselves and instantly front you the money, and the pool will pay THEM back instead. This allows these transfers to be effectively instant, and if the fast relayer is wrong, then THEY lose out on the money, not the pool (meaning the liquidity providers are not exposed to the risk). This is not only a really nice UX feature, but it also allows these fast transfers to happen without having to trust some centralized party.
Next, Millie asked the guests to discuss the liquidity provider side of the equation some more. Matt told us that this position is very passive and super easy, and different from other protocols where LPs are more like AMM liquidity providers. Using Hop Protocol as an example, you would normally provide half HopUSDC and half real USDC on whatever chain you’re providing liquidity. However, for Across you would just go and deposit USDC into the pool, and from that point just earn fees.
The fees you would earn as a liquidity provider are based on how much utilization there is in the pool. High utilization = you’ll be paid more. Low utilization = you’ll be paid less. However, for a regular lending protocol like Aave or Compound, there is a 1-to-1 mapping ratio between a certain utilization and a certain fee or APY.
There’s a little more complexity in the way the Across system works, because you’re effectively offering fixed rate loans upfront. So when the user sends their transaction, they’re essentially getting a flat quote for that full term. So this means the fees may deviate from where you might expect them to be for different utilizations, but for the end user this doesn’t tend to matter that much. So for all intents and purposes, as an LP, you basically just put your money in and get an APY.
The LPs are extremely important because they are what allows the Across protocol to function! And LPs are not restricted from withdrawing their liquidity, unless utilization hits 100% (which is basically the same constraint that other lending protocols have).
Towards the end, the group talked about how the community can get involved and what their initial expectations were in terms of contributions in this early stage. They wanted to emphasize a message for anyone who wants to be part of the Across community: if you want to help out, be a developer, be a liquidity provider, be a marketer, there is an open role. Everyone who joins is a co-founder!
Currently, Across is fully run and maintained by the UMA team, and they are discussing what the most logical process is to fully hand it over to the community. They are also interested in helping the community discuss the tokenomics: Is there a token? If so, what would the token do? That’s not something that they are going to decide, it’s something that the community will decide.
So join the Across community on Discord and get involved in the conversation! And you too can be a co-founder ;)