Synthetix Community Governance Call Notes - Dec 20 2023

Jan 02, 2024

A significant number of SIPs, particularly core V3 SIPs, received approval from the Spartan Council.
Transitioning Synthetix to a zero-inflation, deflationary model was a key strategic move, with the Andromeda release incorporating a buyback and burn mechanism funded by 40% of accrued fees.
The Council expressed a cautious approach towards bridging solutions, preferring to evaluate additional proposals over time. When bridging SNX from base to LP, users will use the native bridge from Base or aggregators like Bungee.
Upcoming epochs will involve close monitoring of the base deployment and Perps V3 on base and readiness for adding more markets and integrators.
All SIPs that got approved this epoch can be found here: https://sips.synthetix.io/all-sip/

Perps V2 has seen a strong 2023, generating 40b+ in volume and 30m+ in LP fees. This has demonstrated an effective model that provides highly delta-neutral exposure even for long-tail markets.
The robustness of the risk management system was confirmed by the rapid and efficient balancing of large positions and liquidations.

Liquidators are even bribing the OP sequencer with large ETH transaction fees to liquidate before others.

Risk management is underpinned by two key features - dynamic funding rates and price impact.
If you were to plot fees/trading volume/etc on a chart, it'd be up and to the right, which is great.
Perps V2 Review -

Live on Base mainnet for integrator testing. Very low caps for trading and LP'ing.

Andromeda represents the initial phase of Perps V3, showcasing new features such as cross-margining, multi-collateral margin, improved deterministic settlement, and enhanced liquidation processes for large positions.
Initial deployments will use USDC as collateral, with multi-collateral capabilities to be gradually introduced post-launch with governance approval.
Link to learn more about Andromeda:

Perps V3 has been tailored for Ethereum L1 to accommodate larger traders and protocols, enabling strategies like staked ETH collateralizing ETH shorts from protocols like Ethena
The Ethereum L1-specific perps market will focus on capital efficiency and reducing reliance on cross-chain bridges.
This offering will be built to support those who can stomach large gas fees, something in the $50-100 per trade.
Ethena & Synthetix blog post - https://mirror.xyz/0xF99d0E4E3435cc9C9868D1C6274DfaB3e2721341/tjd5bOkKWK4rpmAIjTrRH4xs4-OF4ym66mg9jMkhrKo

For Core V3, the following steps are to make configuration changes as required, remove the feature flags on permissionless pools and permissionless markets once approved by governance, and onboard new governance collateral types and such with governance approval.

Ambassadors: Focused on governance representation within the Optimism ecosystem, securing RPGF for Synthetix-related projects, and aiding in grant applications.
Grants: Supported new use cases within the ecosystem and community-driven programs.

Kwenta: Reported substantial growth with increased daily active traders and volume, highlighting organic traction without additional incentives. They are working on a secret project utilizing Synthetix V3 and planning to introduce social login and account delegation for an improved user experience.
Polynomial: Focused on revamping the V3 infrastructure and optimizing the limit order system, with an eye on account abstraction and referral programs.
Infinex: Preparing for mainnet launch with user onboarding and UX improvements to mimic a centralized exchange experience. Their incremental fee strategy aligns with the ecosystem's buyback and burn model.
Lyra: Launched V2 with a new optimistic roll-up, introducing portfolio margin for multiple asset classes. They're working on expanding composability and cross-collateralization with other protocols.
Thales: Launched speed markets with a fast oracle solution and is developing a cross-chain staking and revenue-sharing mechanism using Chainlink's CCIP. Account abstraction and mobile user experience are significant focus areas to enhance accessibility and user engagement.

Spartan Research Collective