SNXweave Weekly Recap

April 3, 2024

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.

👉TLDR

• Discussion regarding the STP to deploy Synthetix Perps on Solana:
• Duck questioned whether the SC should have been involved in the decision
• Kain said Synthetix has benefited from the flexibility the CCs have that allows them to experiment without a lot of bureaucracy, and that these plans are very rarely, if ever, fully pre-determined at the governance level.
• Going forward, the CCs will have to get a budget request approved quarterly and the SC has ultimate veto power on any CC initiative as representatives of stakers
• SIP-369: Remove Maximum Rewards Distributors Limit presentation recap
• SIP-2059: Legacy Spot Synth Migration presentation recap
• SCCP-2093: Update of sETH Exchange Fees presentation recap
• SCCP-2094: Increase wETH Wrapper maxTokenAmount presentation recap
• SCCP-2095: Deprecate V2 Legacy Loans/Wrappers presentation recap

Spartan Council and SIP updates

Present at the March 27, 2024 Spartan Council Weekly Project Sync:
Spartan Council: Adam, bilby, cyberduck, Kain, Millie, ml_sudo, Snax Frens
Core Contributors: Afif, Burt, Cavalier, joey, KALEB, Matt, Mike, Nikita, Steve, sunny

The Spartan Council started out last week discussing the STP to deploy Synthetix Perps on Solana. Duck voiced support for the plan but questioned whether the Spartan Council, as approvers of the roadmap, should have been involved in the decision. He praised the transparency and initiative on the part of the TC but thought there should have been some alignment between the SC and TC on this particular strategic objective.

Kain explained that most of R&D done at Synthetix to date has begun at the Core Contributor level with an initial spark to build out more use cases for the protocol. Synthetix has benefited from the flexibility that a flat organizational structure affords CCs by allowing the space to experiment without a lot of bureaucracy. These plans are very rarely, if ever, fully pre-determined at the governance level.

Governance simply provides the checks on those processes: if they are financially inefficient or unproductive, the TC will not fund them. Going forward, the CCs will have to get a budget request approved quarterly and the SC has ultimate veto power on any CC initiative as representatives of stakers.

Kain also brought up the fact that the TC has always funded initiatives this way but now, in response to the community, they are being more transparent about these efforts. Duck still thought, given the $2 million price tag, that some kind of coordination between the two Councils would have been preferred. Kain advocated for the TC to act with full discretion to support the protocol in any way that they see fit, on behalf of the token holders.

Specifically, on the technical aspects of the STP:

• Millie asked how the budget was determined for this project
• Cav explained that a lot of research and due diligence was done to make sure the teams were available to complete this project at the price detailed in the STP
• Kain added that this is specifically enabled by the redesign of Synthetix (V3) and that a similar project using the V2 code base would have been far more expensive

Next up, there were several SIP presentations last week so let’s briefly review them:

SIP-369: Remove Maximum Rewards Distributors Limit

• Presented by Noah, this SIP proposes removing the maximum rewards distributions limit in the rewards manager module, which was originally implemented with SIP-305
• Currently, in response to audit feedback, a pool owner may only register a maximum of 10 rewards distributors per pool; this SIP would remove that check
• It is expected that this will be less necessary in an environment where Synthetix is mostly deployed on gas-efficient blockchains
• Pool owners will need to take responsibility in not adding so many distributors that it causes them to experience negative gas usage consequences

SIP-2059: Legacy Spot Synth Migration

• This SIP was re-presented by Kaleb
• Previously, the SIP specified the use of a rebase mechanism to begin the wind down of all non sUSD synths
• Adam had called out some issues with the proposal related to the curve pools
• The new version outlines using a redeemer to deprecate spot synths
• Users would be able to access this feature when they choose, and the price will be the Chainlink oracle price plus a governance-determined multiplier
• Another change from the previous presentation is the inclusion of all low volume, non-sUSD synths (previously it was just sBTC and sETH) because it would make the implementation easier
• The primary motivation behind this SIP is to fix the skew

The next three SCCP presentations are prerequisites for SIP-2059:

SCCP-2093: Update of sETH Exchange Fees

• To unwind the wrappers, the Treasury Council will have to execute a series of transactions:

— swap enough sUSD to sETH to unwind the sETH wrapper on L1

— unwrap the sETH on L1 by burning the sETH

— send the wETH to L2

— wrap the wETH to mint sETH

— swap the sETH back to sUSD

— send sUSD back to L1 (with a 7-day delay)

• In order to reduce the cost, and since this is an internal transaction, protocol fees will be set to zero during that time

SCCP-2094: Increase wETH Wrapper maxTokenAmount

• In order to accomplish the objectives of SCCP-2093, this SCCP will increase the wrapper capacity on L2 from 2,000 sETH to 6,000 sETH

SCCP-2095: Deprecate V2 Legacy Loans/Wrappers

• Lastly, this proposes deprecating loans and wrappers on the Ethereum network
• There are a number of very old, possibly abandoned loans that are very over-collateralized and therefore unable to be liquidated (and also costing users 30% in interest annually)
• The SCCP would create a module allowing the minimum c-ratio to be increased to the point of liquidation
• The ETH received from this liquidation would go to the Treasury Council to hold until the user claims the funds

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SIP/SCCP status tracker:

SIP-369: Remove Maximum Rewards Distributors Limit, Status: approved

SIP-2059: Legacy Spot Synth Migration, Status: approved

SCCP-2093: Update of sETH Exchange Fees, Status: vote pending

SCCP-2094: Increase wETH Wrapper maxTokenAmount, Status: vote pending

SCCP-2095: Deprecate V2 Legacy Loans/Wrappers, Status: vote pending