Synthetix Quarterly Report — This autumn 2022

Quarterly Report for Synthetix, Quarter 4 of 2022: October — December.

Let’s begin with the highlights, lets?

This autumn Highlights

⭐ Spartan Council/CCs: Escrow Liquidations & Perps V2
⭐ Grants Council: Loans UI
⭐ Ambassador Council: Original Wallet & Spartan Spaces

Yup, it’s that point once more! Get able to recap one other thrilling quarter for the Synthetix protocol and group. There’s been quite a lot of huge information within the broader crypto market in This autumn, however earlier than we get into all that, let’s evaluation the highlights of the epoch.

After fairly a little bit of backwards and forwards on the small print, the flexibility to liquidate escrowed SNX entries was lastly carried out! To perceive the implications of this improve, we have to focus on a little bit of background in different system options: Liquidation is a course of that retains the general debt well being of the protocol inside spec, as outlined by the Spartan Council (by way of adjustments to c-ratio necessities). Earlier within the 12 months, liquidations had been socialized which made stakers the solely patrons of liquidated SNX. But one remaining difficulty was that SNX rewards for stakers, that are locked for a 12-month interval, had been exempt from liquidation previous to this replace.

We additionally noticed fairly a little bit of motion on Perps V2 in This autumn, which was launched on mainnet on the finish of December. The goal was to take all the pieces realized from the unique perps implementation and iterate in the direction of a design that may help broader asset compatibility and environment friendly execution, whereas additionally delivering a extremely aggressive product that might entice customers from centralized exchanges. To permit for a interval to evaluation efficiency, this went dwell with an preliminary alpha providing solely ETH with restricted open curiosity caps. But we should always begin to see the coaching wheels come off within the upcoming epoch — keep tuned!

The Grants Council additionally stayed busy this epoch, leveraging group expertise to fill the gaps in protocol wants. In Q3, they delivered the Wrappr UI (for which the capability has been elevated considerably since launch) and in This autumn, they continued work and finally delivered a Loans UI that makes it simple for customers to open ETH-backed sUSD loans.

The Ambassadors continued to make connections with different DeFi protocols this previous epoch with the facility of 5 members as a substitute of three. They hosted a number of Spartan Spaces, a few of which led to highly effective integrations. An enormous win for the Ambassadors this epoch, nonetheless, was overcoming some technical difficulties and regaining entry to their Optimism delegate pockets. When the OP token was launched with airdrop 1, anybody claiming the airdrop needed to delegate voting energy for his or her tokens. Unfortunately, the Ambassador pockets that customers had been delegating to was an L1 ETH multisig that they had been unable to make use of for governance exercise on Optimism. With some assist from Ethernaut, they finally made it work and, within the meantime, had been delegated some OP from the Treasury Council to a different pockets so their supposed voting energy could possibly be put to make use of.

Challenges

Any nice quarter goes to return with some challenges…and for This autumn it looks as if the pure place to start out is with the FTX collapse. Though not a Synthetix-specific problem, huge system shocks like these can harm belief, and the burden to choose up the items typically lies with those that stay. At the start of November, it was revealed that the second largest centralized trade in crypto had a multi-billion-dollar gap of their steadiness sheet. Without going too far into the small print, the wave of withdrawals and liquidations despatched shockwaves all through the sector.

That being stated, one of many long-lost tenets of decentralized digital asset administration has been introduced again to the limelight: self-custody. “Not your keys, not your coins” is without doubt one of the earliest crypto memes (courting again to the Mt. Gox days), however now and again it turns into a harsh and unlucky lesson for some. On the intense facet, failures of centralization ought to push customers to see decentralized options in a extra fascinating gentle, which might characterize a shift in sentiment on which Synthetix is uniquely positioned to capitalize.

But so far as extra protocol-level challenges go for This autumn, we’ll focus a bit on Synthetix oracle suppliers. To ship on all the guarantees of Perps V2, it turned clear {that a} new oracle framework was crucial. Pyth stepped as much as the plate providing the lacking hyperlink of the proposed hybrid oracle answer crucial for Perps V2. There was some preliminary reluctance in the neighborhood, given the longstanding relationship with Chainlink, however to facilitate protocol progress and make the choices extra aggressive, the Pyth proposal ended up passing with just one vote towards. The dialogue surfaced some pressure in the neighborhood, with a number of noting that diversifying infrastructure suppliers will help the protocol progress extra rapidly. There at the moment are calls to deploy Synthetix on as many L2s as attainable, spreading a lot wanted liquidity and including worth for stakers by means of extra integrations.

Protocol Stats

Overview of Synthetix This autumn Stats: October 2022 — December 2022

Spartan Council

This autumn 2022 Spartan Councilors: Adam, Afif, Burt Rock, dsacks, Ethernaut, ksett, nana, TerraBellus

Along with their contribution to the achievement of some main Synthetix milestones this epoch, let’s take a minute to evaluation all the pieces else that the Spartan Council was in a position to obtain in simply the final three months.

October was the month we lastly received the Escrow Liquidations SIP beforehand talked about, and it went out on the Aspidiske launch on the finish of the month. We additionally noticed an Optimism integration with Binance that allowed customers to deposit and withdraw funds on Optimism on to a centralized trade.

The main output, nonetheless, was the primary official definition of the Perps V2 scope. SIPs 279, 280, and 281 described the enhancements that the Core Contributors (CCs) hoped to make on this subsequent iteration of perps, together with how they supposed to transition customers from the V1 contracts. We received to listen to from Afif and the Ambassadors in one of many workplace hour specials of the epoch in a deep dive of the proposed core mechanisms, together with the way forward for on-chain perps.

November kicked off with the Suhail Release and the flexibility for protocols to immediately combine with Synthetix. This marked a enormous enchancment for customers of protocols that combine with Synthetix. Previously, all transactions dealt with by the protocol had been handled identically whatever the supply, which meant completely different integrators with completely different situations had been all topic to the identical measures designed to guard towards unhealthy actors.

The Direct Integration SIP allowed for integration-specific configurable parameters. The final aim, and consequence, was that these integrators with their very own built-in safeguards would have the ability to move decrease, extra aggressive charges to their customers and drive extra quantity in a method that’s nonetheless protected for the Synthetix protocol.

We additionally received a significant V3 replace in November from Noah. You could recall, the primary section of V3 was debuted a pair epochs in the past with the launch of the primary totally on-chain governance module (V3GM) …and much more has occurred since then. At the top of November, the Alphecca Release went out to facilitate the smoothest transition attainable by executing minor upgrades in V2X to help the migration. While there’s nonetheless no official launch date, the CCs are taking pictures for the top of January to start the migration course of.

Currently, the code for V3 core is frozen and is in audit with 3 separate corporations auditing completely different mechanisms within the new contracts. CCs are addressing suggestions from the auditors because it rolls in, and we’ll remember to preserve you up to date on the progress because it will get reported within the weekly syncs!

In December, the a lot anticipated Staking V2 dApp lastly went dwell. The CCs have been working tirelessly to ship a cleaner, extra approachable model of Synthetix staking options. The consequence was simply an total higher UI and many constructive suggestions from the group. It seems to be very polished and contains hyperlinks to useful sUSD utilities with integrators.

To shut out the month, quarter, and 12 months, the preliminary launch of Perps V2 was deployed on the finish of December. This is the newest iteration of one in all Synthetix’s most profitable merchandise that has introduced the consumer base a good distance from the 13 dealer days. Perps V2 was launched with some restrictive parameters to offer Core Contributors an opportunity to evaluation dwell efficiency information and handle any bugs in alpha earlier than a full launch afterward this epoch.

Grants Council

This autumn 2022 Grants Councilors: ALEXANDER, CT, cyberduck, JVK, Max

As at all times, the Grants Council has been exhausting at work enhancing the protocol with their fastidiously vetted grants and initiatives. Here are this quarter’s highlights from them:

Starting off robust, the Council offered a few public good grants this epoch: Synpress Sponsorship, Zapper Integrations, and Tally Ho & Thales demo sponsorship. For Synpress alone, $5,000 was offered on to Core Contributor Jakub, who has developed this e2e dApp testing software.

Synpress is an e2e testing framework primarily based on Cypress.io and playwright.dev with help for metamask. It is a pioneer software in web3 e2e testing, with the potential to evolve right into a decentralized community of check runners (and CI supplier) in future.

Towards the start of the epoch, the Grants Council sponsored this initiative, which was a Whale Trading analysis experiment by Kwenta. The goal was to get a few whales to return commerce on Kwenta after which get data from them by way of an exit interview. The incentive was that ALL of their buying and selling charges could be lined, by way of a Fee Rebate from the Grants Council. To qualify for this Fee Rebate, they needed to commerce a minimal of $1 million. Kwenta was in a position to onboard 3 whales who went by means of this system. Their total buying and selling was a loss…so excellent news for stakers! However, the suggestions that the Council obtained from Kwenta was that they realized loads and that the initiative was an total success. 🏆

SIP/SCCP Site frontend & upgrades

This one is brief, however candy. The new SIP/SCCP website that everyone knows and love received a couple of updates this quarter: the net app now has a WYSIWYG editor and picture embedding! Talk about simple SIP-proposing.

This is a BIG ONE! Arguably the spotlight of This autumn for the Grants Council, the brand new UI for Synthetix Loans was a terrific success. This devoted website now lets you handle your sUSD or sETH loans, with new options together with viewing your liquidation worth and previewing your c-ratio when managing your mortgage. The Grants Council needed to verify this website was good for customers, in order that they began a thread on Discord inviting group members to share their expertise and any suggestions from utilizing the location.

The Grants Council has additionally continued to keep up their help in internet hosting and upkeep for varied Synthetix bots, together with the ever-so-helpful Telegram bot.

300 Lieutenant Stipend Sponsorship

Lastly, the Council continues to sponsor the stipend for the 300 Lieutenant, milkywave, who leads the 300 Spartan group and administers duties to assist develop and publicize the protocol. Shout out milkywave!

What’s subsequent for the Grants Council?

Yup, we have now one other leak for you! Can you notice the Kain NFT?

These NFTs are a very long time coming, however they appear like they’re going to be value it. We’re all so excited for them to lastly drop!

Ambassador Council

This autumn 2022 Ambassador Councilors: GUNBOATs, Kevin, mastermojo, Matt, MiLLiE

The Ambassadors had one other profitable quarter of integrating with different protocols and simply being total nice voices for Synthetix. Here’s all the pieces they completed over the previous couple of months:

✅ Spartan Spaces

1. Velodrome (55 listeners, Length: 1 hour)

Guests: Alex and Tao. Alex is without doubt one of the founders, who largely focuses on enterprise improvement, advertising, and operations. He began mining crypto at dwelling in the course of the pandemic and immediately was hooked. Tao can be a founder and has a background in economics and finance. He was working in tech earlier than he moved over to the holy land of web3. 😉
Velodrome launched in the beginning of June as a DEX AMM answer to correctly incentivize protocol liquidity. Alex stated it’s a “protocol’s protocol” that’s meant to incentivize lively liquidity. He added that many protocols have been having points constructing deep liquidity on Optimism, and Velodrome addresses that want. And they really simply hit $2 billion in quantity because of the extraordinarily low charges!
Recording right here

2. Beefy and Velodrome (88 listeners, Length: 1 hour)

Guests: Alex from Velodrome (above) and frondoto from Beefy.
Beefy is a DeFi Yield Optimizer venture that enables its customers to make extra crypto with crypto. Beefy caters to customers by making it simple to get a yield in your crypto capital in a protected and decentralized method. Through a set of good contracts and a number of other funding methods, Beefy mechanically maximizes the consumer rewards from varied liquidity swimming pools, automated market making initiatives, and different yield farming alternatives within the DeFi ecosystem.
Recording here

3. Perps V2 with Afif (92 listeners, Length: 1 hour)

Guest: Afif, who has been a Core Contributor at Synthetix for about 1.5 years, and served on the Spartan Council for a couple of 12 months.
The core upgrades for Synthetix Perps V2 included: premium/low cost pricing perform primarily based on skew, funding fee mechanism changes, utilization of a hybrid oracle to enhance oracle latency and reduce charges. Afif defined all of those mechanisms in nice element in the course of the name!
Recording right here

4. Chainlink (Length: 45 minutes)

Guests: Roger, Kemal, and Clement. Roger is the director of options structure at Chainlink labs, Kemal is the chief product officer, and Clement is the product supervisor for the brand new low-latency oracle.
We’re all fairly conversant in Chainlink by now, together with all the pieces they do for Synthetix. Here’s what they lined in the course of the name: the issue of frontrunning, Synthetix’s want for low-latency oracles, Chainlink’s distinctive means to unravel this drawback, Chainlink’s low-latency oracles, structure, and the important thing advantages for Synthetix.
Recording right here

5. Synthetix V3 with Afif, db, and Noah (70 listeners, Length: 1 hour)

Guests: Core Contributors Afif, db, and Noah, who’ve all been at Synthetix for over a 12 months now, and have been deeply concerned in V3 for a number of months.
This name lined some baseline data of how V2X works, huge image targets of Synthetix V3, and an in-depth evaluation of the entire V3 phrases. Check out the graphic we made beneath for our recap weblog of this Spartan Space.
Recording right here

6. Aztec Network (52 listeners, Length: 1 hour)

Guest: Josh, who joined the protocol in May and is main the developer relations staff at Aztec.
Aztec is a privacy-by-default rollup answer on Ethereum that’s primarily based on zero-knowledge know-how.
Recording right here

7. Across Lightning Space with Synthetix (115 listeners, Length: 1 hour)

Guests: This Space was hosted by Across, so our Synthetix Ambassadors had been technically the friends for this name!
Across is a novel bridging methodology that mixes an optimistic oracle, bonded relayers, and single-sided liquidity swimming pools to offer decentralized instantaneous transactions from rollup chains to Ethereum Mainnet.
Recording right here

8. Gearbox (31 listeners, Length: 1.5 hours)

Gearbox is a generalized leverage protocol, which means it permits anybody to take leverage in a DeFi-native method after which use it throughout varied DeFi protocols in a composable method. Basically, you possibly can take leverage with Gearbox after which apply it to the protocol of your alternative.

9. Rango Exchange (24 listeners, Length: 1 hour)

Guest: Martin, who has expertise working within the promoting space and can be at present working in a conventional monetary market. He has been round in crypto since 2020, and joined Rango in August of 2021.
Rango is a Multichain Dex/Bridge Aggregator that boasts being probably the most highly effective multi-chain platform for DEX and bridges throughout the crypto world, primarily based on reachability and help of high blockchains. They at present help greater than 40 blockchains, 100 DEXes, 10 bridges, and 6 completely different wallets, with a contemporary and user-friendly UX out there.
Recording here

10. dYdX and Optimism (50 listeners, Length: 1 hour)

Guests: This Space was hosted by Cliffton from dYdX, so our Synthetix Ambassadors had been as soon as once more the friends for this name.
This Spartan Space was primarily about governance. Matt and Millie represented the protocol within the dialogue of the governance fashions for Synthetix, Optimism, and dYdX.

11. Year in Review Space (Length: 2 hours)

Guests: Alex, who we talked about above, and lito.eth, who created cryptotesters and works on progress at HOP protocol.
Recording here

✅ Proposals

1. SIP-290: Deprecated SIPs/SCCPs (creator: Millie)

This proposed including a brand new standing header to the SIP repo that describes which SIPs and SCCPs have been accepted or carried out up to now, however have since turn out to be deprecated on account of protocol or governance upgrades. Simple, however efficient. This SIP was carried out!

2. SIP-294: Redirect inflation from Curve sUSD pool reward to Curve synth incentives (creator: Matt)

Still in draft, this SIP proposes growing the 6,000 SNX inflation emission entry, which is immediately despatched to Curve’s sUSD pool, to 10,000 SNX per week and redirect the inflation to the vault managed by the Treasury Council. This will incentivize sETH, sBTC, and sUSD Curve swimming pools to advertise Atomic Swap adoption, and the Treasury Council shall be mandated to spend this 10,000 SNX every week.

✅ Governance

Voting Activity might be adopted utilizing these snapshot hyperlinks:
https://snapshot.org/#/profile/0x46abfe1c972fca43766d6ad70e1c1df72f4bb4d1
https://snapshot.org/#/profile/0x406b607644c5D7BfDA95963201E45A4c6AB1c159

1. Uniswap Sustained Power

54k UNI vote energy (improve of ~20k this quarter)
137 distinctive delegators

2. Curve/Convex

3. Fast bridging help for SNX and sUSD on HOP Protocol

4. Active voting in Gearbox Governance

14M GEAR vote energy (improve of ~12M this quarter)

5. Active voting in HOP Governance

6. Active voting in Euler

Millie’s proposal to vary sUSD pricing Oracle to Chainlink

7. Participation in OP Governance:

OP pockets: 2,238,880 OP delegated to this pockets
Snxambassadors.eth: 1,278,984 delegated to this pockets
Projects that the Ambassadors have been involved with because of OP Governance: Alchemix, Sushiswap, Yearn, Bankless Academy, EthernautDAO, Across Protocol

Optimism Governance Forum Activity:

The Synthetix Ambassadors have a significant voice in Optimism Governance. During the October Optimism Grant voting season, the DeFi Committee made a “NO” advice for Overtime Markets. The Ambassadors argued towards this advice and rallied voters to their help. Overtime Markets was in a position to safe an OP grant due to them!

✅ Integrations

1. Beefy Finance

2. Granary Finance

3. Sonne Finance

4. HOP Protocol

5. Silo Finance

What’s subsequent for the Ambassador Council?

The Ambassadors are persevering with work on their YouTube channel, that they hope to have printed this epoch, the place they’ll add previous and future Spartan Spaces so the group can take heed to them ceaselessly!

In addition to this, the staff has additionally outlined some total targets for the following quarter:

Partnerships/Integrations/Relationship Building

The Ambassadors are hyper-focused on supporting a number of the most up-to-date Synthetix releases. They are planning to coordinate with CCs to help the Perps V2 and Synthetix V3 releases with integration companions and total schooling to tell builders about the advantages of constructing on Optimism. The Ambassadors are additionally serving to to deal with new locations to make use of synths (loans, yield aggregation, and many others.) and are working with the Treasury Council on supporting Synthetix liquidity. In the brief time period, there are numerous merchandise that could possibly be constructed on high of Perps V2, comparable to extra front-ends, automated methods, and so forth, however there’s a good larger risk for this with Synthetix V3 that the Ambassadors will assist to capitalize on.

Governance Involvement and Governance Power

Maintaining revered governance energy throughout Ethereum is one thing that the Ambassadors are additionally centered on. They’ve constructed up a large amount of governance energy and can proceed to make use of this to extend their governance involvement. This is finest used to help Synthetix pursuits throughout the ecosystem and has served as a really useful software throughout occasions of crucial change from different protocols.

Community Marketing

The Ambassadors plan to proceed scheduling fascinating and informative Spartan Spaces, and use these as a path to teach Synthetix customers about new and thrilling protocols, whereas concurrently spreading the phrase about Synthetix. This can be a priceless software that most individuals will keep in mind the Ambassadors for, and the relationships which are developed on these calls have confirmed to be important.