SNXweave Weekly Recap

February 15, 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 February 8, 2022 Spartan Council Weekly Project Sync:
Spartan Council: Afif, BigPenny, bojan, Kain, KALEB, redmarglar, TerraBellus
Core Contributors: Cavalier, Rafa

The Alphard release went out last week! The sole purpose of this release was Debt Shares, which has implemented a token mechanism that allows stakers’ debt to be tracked by issuing debt shares when minting or burning sUSD debt. This SIP is a major pre-requisite for v3 and, in Kain’s words:

“Having debt shares deployed is a huge improvement to the system architecture and replaces a lot of inefficiencies and legacy code.”

The next release was Polaris, which went out on Monday. This included SIP-199 to add a SOL Synth and SCCP-163 to use the new off chain reporting (OCR) price feeds from Chainlink to Optimism. SOL will be the first addition of a new synth on Optimism since exchanges went live last Summer!

After Polaris, the next SIPs we should see go out are SIP-148 for an Upgraded Liquidation Mechanism and SIP-165 for Debt Pool Synthesis. Noah and Mark have made changes to the staking reward and have added the liquidation contract. Basically, it takes the instantaneous composition of tokens in a staking rewards contract and distributes any rewards that are dropped in based on that composition. Getting the staking rewards contract updated for direct liquidation was the last roadblock for this SIP. Kain also brought up that SIP-148 may allow the c-ratio to be reduced for stakers on L1 and L2.

The Debt Pool Synthesis is also ready to be handed over for audit, and both oracles are now on Kovan. Both of these SIPs will likely go out in a single release by the end of February.

While SIP-202, to introduce a target staking ratio, is not as high priority as SIPs 148 and 165, Jackson is pretty confident that he has a mechanism to allow it to go out shortly after Polaris. This SIP will track the staking ratio within the network and modify the inflation rate weekly to ensure this target ratio is achieved. The staking ratio will be measured as the percentage of SNX collateral in staked addresses divided by the total SNX collateral.

As for Futures, there was supposed to be a presentation last week, but due to a scheduling conflict it was postponed. Since it’s been more than 60 days since its initial presentation, Kain proposed that this SIP be presented again. He emphasized that it’s a good practice to ensure that everyone is as updated as possible before something gets pushed to Mainnet, and may also propose a meta-governance SIP to make this an official rule. This is particularly important since Futures is such a high-profile SIP and the Council has changed since it was first presented.

After Futures, we should expect to see SIPs 204 and 208 implemented. SIP-204 for Synth Teleporters will allow synths to be moved between different networks (such as Ethereum and Optimism). The team called attention to some of the other network bridge hacks that have already happened this year, with Kaleb saying:

“If we’re going to push through with it, we really need to make sure it’s bulletproof.”

They will therefore be speaking with other protocols to brainstorm ways to make the Synth Teleporters process more robust.

SIP-208, the Debt Migration, will allow stakers to migrate their SNX collateral and debt position from Ethereum to Optimism without burning sUSD to clear their debt. This is essentially the same mechanism that has been used for the migration to L2 — it moves your collateral and vesting entries and will migrate your debt shares from one chain to the other.

This all seems like a lot, but there are actually several teams working in parallel so the majority of these SIPs should be going out in the next week or two.

Lastly during the Spartan Council meeting, Kaleb asked when V3GM is expected to be implemented. Kain said it should account for the majority of the protocol governance in the next epoch.

Kaleb also brought up how V3GM does not eliminate the need for SIP presentations, therefore SIPs that require a quick fix (like the recent exchanger modification in SIP-209) still need to be put to a presentation, even if the pressing issue doesn’t warrant enough time to do so. SIP-197 to bypass the SIP presentation requirement was therefore put to a vote again, and this time received all eight votes in favor of its implementation.

Present at the February 10, 2022 Spartan City Hall:
Ambassadors: Matt, MiLLiE

In Ambassador Council news, the Ambassadors hosted a City Hall with Quixotic last week where we got to talk to Daniel, Mark, and Dre. Mark is a developer and focuses on the smart contract side of development. Daniel was previously a product manager for YouTube and Google, and focuses on the frontend side. Dre is the community lead with Quixotic and joined the team last June.

Mark and Daniel actually met in college, both with a software engineering background, and decided to collaborate in 2021 to launch their NFT company. They experimented with different NFT experiences, including a music community, but they quickly realized that gas on L1 was not sustainable for this type of project. They therefore looked into building an NFT marketplace on Optimism and found that it was pretty difficult, but were able to launch in December of 2021 and they are very excited about scaling Ethereum. Daniel said they’ve enjoyed working with the Optimism team during the launch of Quixotic, and he’s very optimistic about the future of Optimism and building a thriving and sustainable NFT ecosystem.

Millie asked our guests how they came up with the name. They said they wanted something really unique, and having been partially inspired by Don Quixote, they decided on Quixotic which means exceedingly idealistic.

As for the start of their marketplace, they first heard about Optimism at the scaling Ethereum hackathon last March. They noticed that some NFT projects were launching on Optimism but there was no marketplace yet, so they connected with Kevin from Optimism. After working closely with him and the Optimism team, Daniel said it felt natural to be the marketplace of Optimism rather than taking a multichain approach. The whole Quixotic team really believes in Optimism and decided they wanted to create an amazing NFT experience there.

They are still in the process of figuring out their governance, since Quixotic is just two months old, but they have a lot of interest in the principles of web3 including community, governance, and platforms. The success of their marketplace will obviously depend on the success of the Optimism NFT ecosystem as a whole, so their main focus right now is building a really great experience that everyone loves to help bring people to Optimism.

When discussing the future of NFTs across networks, our guests emphasized that legitimacy is a crucial building block for any NFT community. It’s a different challenge than bridging fungible assets that maintain their price and utility across networks. Most artists and creators see the chain deployed on as part of the work itself (for example, it doesn’t make sense for Optipunks to deploy on another chain).

Mark further explained how he thinks Optimism today inherits the security guarantee of Ethereum, but he’s trying to push for it to inherit the legitimacy of L1 Ethereum as well — which requires market consensus. Quixotic is therefore planning to support bridging across layers which would allow users to trade at low fees and bridge back to L1. Daniel said their biggest hope is to change the narrative around L2 NFTs such that NFTs on Optimism share the same level of legitimacy as NFTs on L1, and bridging is going to be a huge part of that.

Their current listing process is not too restrictive, but they’re hoping to automate it soon. As of now, there is a whitelist and collections are added manually. This approval process exists solely to weed out scams and copies, but their goal is to ultimately help artists and creators deploy on L2 the best that they can.

As far as benefits for creators go, Quixotic provides speed and cost efficiency, as well as all of the safety and security inherited from L1. These benefits seem to be resonating immediately with creators, because they have been more receptive to deploying on L2 than they were in the past. Dre emphasized that while you need creators on a marketplace like this, you also need a community for them to interact with.

Towards the end of the call, the group discussed their growth strategy, the transition from web2 to web3, how they all got into the NFT game, and of course the question that had to be asked: wen token? And to everyone’s delight, they said it’s not a question of if, but when. So be sure to check out the recording of this call post for more details and check out the Quixotic Discord to join the conversation!

SIP-185: Debt Shares, Status: implemented

SIP-199: Add SOL Synth on Optimism, Status: implemented

SCCP-163: Update Optimism Chainlink Oracles to OCR, Status: implemented

SIP-148: Upgrade Liquidation Mechanism V2, Status: vote pending

SIP-165: Debt Pool Synthesis, Status: approved

SIP-202: Target Staking Ratio, Status: approved

SIP-80: Synthetic Futures, Status: SC review pending

SIP-204: Synth Teleporters, Status: draft

SIP-208: Debt Migration, Status: draft

SIP-197: Bypass SIP presentation, Status: implemented

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