Synthetix Quarterly Report — Q3 2023

Quarterly Report for Synthetix, Quarter 3 of 2023: July — September.

👉Q3 Highlights

⭐ Spartan Council/CCs: Base Deployment & Testnet Buying and selling Competitors⭐ Grants Council: NFT Challenge & Watcher Web page⭐ Ambassador Council: Spartan Areas & Governance Proposals

As we wrap up the third quarter of 2023, it’s time to assessment the key occasions of the final three months — so let’s begin with the highlights!

With the V3 core system deployed, the Core Contributors (CCs) directed a lot of their efforts over the previous quarter in direction of constructing out Synthetix’s flagship product — Perps V3. A giant a part of this effort was the event of an Ethereum commonplace for on-demand off-chain knowledge retrieval (ERC-7412). The testnet competitors was initially scheduled for a while in July, however throughout growth it grew to become clear {that a} resolution for studying oracle knowledge throughout chains was required and Chainlink’s Cross-Chain Interoperability Protocol (CCIP) at present solely able to writing knowledge throughout chains. This resulted in some minor delays, however the testnet competitors finally had a agency date for the start of October after the CCs labored with companions to combine ERC-7412.

The competitors is being held on Base, which brings us to an enormous protocol milestone and our subsequent main spotlight for the quarter. The concept that Synthetix needs to be a protocol able to seamlessly deploying throughout totally different chains has been lengthy within the making and V3 has lastly made this a actuality. Base, which launched in early July, is Coinbase’s L2 constructed on the OP Stack in collaboration with Optimism. In a present of assist for the brand new L2, Synthetix was one of many first protocols to deploy to Base, although it was simply the core system till the competitors started on testnet. Cross-chain swimming pools are nonetheless in growth, nevertheless, and staked collateral will stay utterly siloed from Optimism for now.

This offered a singular alternative to check another scaling resolution for the protocol — ETH collateral. In one other first for Synthetix, all buying and selling exercise on Base is deliberate to be supported by an ETH debt pool quite than SNX. The choice to make use of ETH collateral was made to keep away from fragmenting SNX liquidity throughout a number of deployments. Exterior collateral has at all times been a sensitive topic and we are going to dive into {that a} bit deeper, however this deployment itself represented a internet profit for the protocol and stakers. Each greenback in charges generated on Base utilizing ETH collateral shall be an extra greenback of worth generated, versus the zero-sum shifting of SNX collateral supporting the Optimism markets over to Base.

Additionally noteworthy this quarter, almost thirty new Perps markets have been permitted with three significantly eye-catching new choices — ETH/BTC, stETH, and stETH/ETH. These are the primary of their type for Perps choices on decentralized exchanges, and actually showcase the facility of the Synthetix product. With dependable worth feeds and liquidity, the variety of markets that may be created is limitless and we’re definitely excited to see what a future, probably permissionless, Synthetix V3 has in retailer!

Subsequent up, Kain was on the earlier Treasury Council and in an effort to carry some transparency to their exercise, he developed a Synthetix Treasury Proposal (STP) process. Some neighborhood members had complained prior to now that the Treasury Council didn’t seem to have as a lot accountability to stakers as the remainder of the governance our bodies. In September, SNXweave hosted a name to listen to shows on the primary few STPs, which highlighted the strategic goals of the Treasury Council. Most of them search to allocate funding to needed capabilities that don’t match neatly in any present Core Contributor field, however are completely crucial to proceed to develop the protocol (i.e. enterprise growth and knowledge analytics groups). A recap of that decision might be discovered right here in our earlier weblog publish!

👉Challenges

The primary challenges in Q3 have been brewing within the protocol for a while, however are actually effervescent very near the floor because the V3 deployment and migration plan start to take form. The primary is the tokenomics plan for V3. Within the final election, an enormous speaking level was that tokenomics discussions have been ongoing for all the yr with no clear decision in sight. There are a selection of issues, and it’s definitely a difficult subject, however the huge query is easy methods to proceed accruing worth to stakers whereas rising the protocol.

Synthetix buying and selling exercise is supported by a debt pool the place LPs stake SNX because the collateral base for the community. This creates an higher certain on scaling potential based mostly available on the market cap and worth of the SNX token. With out these stakers, there could be no Synthetix, so the problem is determining easy methods to develop the Synthetix pie whereas additionally sustaining the worth proposition for stakers who’ve been with the protocol for the reason that early days. There are proposals on the desk, even drafted SIPs from TerraBellus and Adam, however neither have been offered for neighborhood suggestions. Lately, ML_sudo put collectively a doc to evaluate these proposals facet by facet, however there has not been materials progress made on this entrance but.

Another that has been floated on a number of events is utilizing ETH as collateral. ETH has very deep liquidity and the competitors for yield is comparatively skinny, with ETH staking producing simply 4% yearly. The deployment to Base supplied a singular alternative to check using various collateral, and Adam’s tokenomics proposal suggests 60% for stakers, 20% for Base LPs, and 20% for integrators. With scaling V3 being the purpose, the Spartan Council must proceed on the lookout for alternatives to develop the collateral base past what the SNX token is able to proper now. As stakers themselves, and representatives of stakers, sustaining the worth proposition for SNX will at all times be prime precedence. We shall be carefully monitoring the Base deployment to see how this experiment performs out.

In the direction of the tip of the quarter, the subject of integrator payment sharing was introduced up a number of instances within the Spartan Council conferences. As a short background, the unique payment share program was managed by the Treasury Council. It was a tiered reward system paid in SNX based mostly on quantity, however a number of the early integrators outgrew the allotted reward so rapidly that it was now not a sufficiently incentivizing driver of quantity. Final yr, a quantity supply payment program was proposed that will permit integrators to redirect a portion of charges to themselves. There was some disagreement as as to whether this payment needs to be an addition onto the Synthetix payment or a discount from the payment accrued to stakers, but it surely was finally rejected. The subsequent variation of this proposal launched a tiered payment construction that will have paid 10% for charges generated beneath $1 million, 7.5% from $1–5 million, and 5% of charges over $5 million. This payout could be totally in SNX and would nonetheless be a transaction executed by the Treasury Council month-to-month.

In the newest Spartan Council assembly, Kwenta, Polynomial and Rage Commerce introduced a proposal to the group that will direct 30% of the charges in direction of integrators. Along with funding working bills, this could permit integrators to pursue different promotional actions that ought to carry extra quantity to the protocol, for the reason that frontends are the place all the quantity originates. That is nonetheless very a lot an energetic dialogue, however there gave the impression to be some consensus that 20% could also be extra affordable.

👉Protocol Stats

Overview of Synthetix Q3 Stats: July 2023 — September 2023

👉Spartan Council

Q3 2023 Spartan Councilors:

Epoch 1 (Might-Aug): Adam, Burt Rock, Cavalier, cyberduck, Danijel, dsacks, Jackson, ml_sudoEpoch 2 (Sept-present): Adam, Burt Rock, cyberduck, Genefaesius.eth, Jackson, Kain, Millie, ml_sudo

Together with their contribution to the achievement of main Synthetix milestones this epoch, let’s take a minute to assessment all the things else that the Spartan Council was in a position to obtain in simply the final 3 months.

The massive win for this quarter was lastly getting Perps V3 prepared for the testnet competitors, which can lengthen via the tip of October. This was principally a CC effort however the Spartan Council was instrumental in getting fairly a couple of SIPs although governance as rapidly as potential so they may proceed work on the product. 25 SIPs have been permitted this quarter, 11 of which have been V3-related.

A number of of the remaining 25 permitted proposals aimed to extend the depth of Perps choices. On the finish of July, a number of SIPs went out on the Ankaa launch so as to add 6 new Perps markets, together with the ETH/BTC ratio market — the primary of its type on a decentralized trade. Many locally have been requesting this marketplace for a while because it permits for novel publicity to the highest two cryptocurrencies by market cap.

In August, the Enif and Scheat launch went out, including WLD and USDT Perps. The USDT Perps market marked one other decentralized trade first! In the beginning of September, OP buying and selling incentives have been prolonged for one more 5 weeks and the Sabik launch went out, including 19 extra Perps markets. By the tip of the quarter, the Spartan Council had averaged roughly two new Perps markets per week over the entire 3 months.

👉Grants Council

Q3 2023 Grants Councilors:

Epoch 1 (Might-Aug): ALEXANDER, CT, JVK, sunny, synthquestEpoch 2 (Sept-present): ALEXANDER, CT, MoneyManDoug, sunny, synthquest

Along with reviewing a number of Grant purposes this quarter, the GC made some critical headway on a number of of their numerous initiatives and initiatives:

Watcher Web page

The Council labored exhausting this epoch to carry a number of appreciable enhancements to the Watcher Web page, which is the location that means that you can discover trades, traits, and market actions of Synthetix Perpetuals for useful insights and knowledgeable resolution making.

They’ve integrated new options resembling ENS deal with resolving, open curiosity (OI) charts, staker revenue and loss (PNL), and extra. One of the crucial current additions was a “leaderboard” for wins/losses on trades, positions closest to liquidation, and largest open positions. This website is an important supply of knowledge, offering all of the stats associated to buying and selling knowledge and knowledge.

We all know what you’re in all probability pondering…you’re telling me I can see each open place on Synthetix by every market in a single place?? Sure, sure we’re.

BOTS

A basic Grants Council spotlight right here — the group continued their normal Bot upkeep on the entire current Synthetix Discord Bots, and likewise up to date their new SNX Whales Twitter Bot. These Bots are useful every day instruments that assist help merchants, stakers, and arbooors alike. Make sure to examine them out in Discord and on Twitter, and let the GC know your ideas and suggestions within the grants-council channel.

NFT Challenge & LORE

THE NFT PROJECT DROPPED IN JULY!!! This has been a very long time coming for them, and was definitely worth the wait. As a reminder, the totally different Tribes are:

Human: SpartansHuman: OG SpartansHuman: Legendary SpartansHuman: Demigod SpartansDwarfsElementalsMechanoidsPhilosophersAlien ElvesUndeadTrolls

The Council has continued to share extra data with the neighborhood about this mission as they progress via the totally different phases that they introduced:

Part 1: Pre-mint 192 NFTs for the Grants Council ✅Part 2: NFT Public sale to assist elevate consciousness of the mission, Synthetix, and Optimism L2 ✅Part 3: Synthverse LORE reveal ✅Part 4: Group Whitelist Mint of two,000 NFTsPhase 5: Open Mint of three,000 NFTs (provided that demand is excessive)Part 6: Further Mint phases might be opened up — till we attain the max cap of 10,000 NFTs — if the demand is there

In addition they launched their lore for the NFTs, referred to as “THE SYNTHVERSE.” This otherworldly story options detailed tales of Earth Beneath the Olympians, The Elysion Initiative, The Synthverse, The Troll Invasion, The Fall of Mount Havven, and the Present Disaster that ties all of it collectively. Make sure to learn the total Lore right here to transcend actuality and get enthusiastic about these NFTs!

The GC additionally ran an public sale for a couple of uncommon NFTs, all with distinctive objects or attributes:

Now that they’ve accomplished the primary few phases of their plan, the group is now engaged on deploying the free mint. Maintain a lookout for this SOOOON!

V3 Assist

The Council additionally did so much to assist promote V3, resembling: offering NFTs as prizes for the Perps V3 testnet buying and selling competitors on Base, updating and sustaining fundamental core V3 stats on Dune, and persevering with work on the Group Governance Information Doc.

Flipside Knowledge R&D Accomplished

This mission was began by synthquest a couple of months in the past, and was accomplished this quarter! He led analysis and growth (R&D) to work with Flipside instead knowledge supply for Synthetix. This initiative unlocked the power to observe metrics like whole SNX holdings (escrow and liquid), C-Ratio, debt steadiness (SDS), staker distribution stats, at-risk-of-liquidation stats, and a lot extra.

This has already been used to assist confirm fashions constructed by researchers and has been added to the queryable schema sidebar, permitting analysts to simply entry this knowledge on Flipside. The GC additionally gave a shout-out to Kaiblade and metricsDAO for helping with this mission and serving to get hold of correct and dependable knowledge for Synthetix!

What’s subsequent for the Grants Council?

The GC has the next gadgets on their ongoing/upcoming checklist:

Notifi: The Council has been working with CC Matt to make the most of Notifi inside Synthetix, which can function Synthetix’s new notification resolution, and can assist ship real-time notifications about C-Ratio, account summaries, rewards reminders, bulletins, and extra to customers. Matt simply shared Notifi with The 300 to assist try it out, so we needs to be seeing this quickly! (As a reminder, Notifi powers personalised interactions and cross-chain communications between web3 builders and their customers — it’s a suite of blockchain instruments for notifications, real-time alerts, and development advertising and marketing, designed to ship a seamless Web3 expertise in DeFi, NFTs, Gaming, DAOs, and past)The Watcher Web page: The group is on the lookout for extra devs to work on extra updates and enhancements to the web page, as they’ve an extended checklist of enhancements that they’re engaged on and plan to include to assist develop and improve the location.New V3 Stats web page: The GC additionally on the lookout for a dev to transform the Dune dashboard right into a fundamental stats pageRetroactive Grants: Trying to subject RGs to neighborhood devsVarious R&DFunding of Base testnet buying and selling compCommunity Governance Information Doc: Work is sort of performed on the doc!

👉Ambassador Council

Q3 2023 Ambassador Councilors:

Epochs 1 & 2 (Might-present): GUNBOATs, Kevin, mastermojo, Matt, Westie

The position of the Ambassador Council is the promotion of Synthetix’s pursuits throughout the wider decentralized finance ecosystem. That is performed via two main actions: 1) participation within the governance of associated DAOs and a pair of) establishing collaborative relationships with like-minded initiatives.

By the use of governance powers delegated to it, the Ambassador Council is anticipated to hunt to affect protocols in a way that’s useful to the Synthetix mission, voting on proposals that align with the mission’s pursuits. When partaking in collaborations, the Ambassador Council is tasked with working with current and potential collaborators, resembling protocol integrators, addressing their wants and guiding them via the Synthetix ecosystem and exterior grant packages.

Outdoors of those two principal actions, the Ambassador Council can also be anticipated to take care of the accessibility of the Synthetix neighborhood to new members and actively introduce DeFi initiatives to it via collaborative media initiatives that bolster engagement.

So, let’s assessment what the Ambassadors did this quarter!

✅ Governance/Normal

Voting Exercise might be adopted utilizing these hyperlinks:

1. Normal Governance

The Ambassadors performed an energetic position as delegates at Optimism, Hop, Gearbox, Euler, Aave, Uniswap, ENS, and now Arbitrum. They’ve additionally served on the councils at Optimism, badgeholders, and so forth. the place Synthetix has been in a position to foyer for the pursuits of Optimism and push it in direction of additional development.

Optimism RPGF Spherical 3 is open and the SNX Ambassadors are encouraging initiatives to use — the deadline is October twenty third to get purposes in!The Residents’ Home expanded to ~138 badgeholders and can reward 30M OP in Retroactive Public Items Funding (RPFG) Spherical 3. New Badgeholders (on prime of Matt and Mojo) are Westie and Millie!OP Grants Cycle 14 Closing Grants RoundupOP Grants Cycle 15 Closing Grants Roundup — this included Kwenta/Lyra receiving OP grantsOptimism Season 5 is gearing up, and the Ambassadors are prepping for itThe Ambassadors Voted Sure on an necessary proposal to introduce Lyra V2 and set up the Lyra basis

2. Companion Assist and Onboarding

Companion assist continues to be one other central focus of the Ambassador Council, and might be damaged into two sections:

Present Companion Assist:

The main target right here is on present quantity drivers, which incorporates Kwenta, Polynomial, Lyra, dHEDGE, Infinex, and so forth. The Ambassadors have been checking in with companions to get suggestions on their expertise with constructing on Synthetix and in the event that they require any governance assist in any manner.Not solely have they supported companions via suggestions, however they’ve additionally helped information these companions (and the Core Contributors) via OP’s RPFG & OP Grants.

Future Companions:

The Ambassadors are in talks with potential perp companions and different instruments, which is a bunch effort alongside the Grants Council and different groups. As of proper now, this checklist consists of: Rage Commerce, Mux, Sonic, Copin, and doubtlessly extra.

3. Revealed Supplies

This quarter, the Ambassador Council:

4. Optimism Governance Discussion board Exercise:

As beforehand talked about, the Synthetix Ambassadors have a significant voice in Optimism Governance. Their respective OP Governance Discussion board Actions might be discovered utilizing these hyperlinks:

It’s necessary to notice that the Optimism Governance discussion board is just one space of exercise. Most exercise at this level for OP grants lives on their Charmverse & Discord.

✅ Spartan Areas

Spartan Areas continued to function necessary neighborhood advertising and marketing instruments this quarter, with the Ambassadors internet hosting calls and attending different DAO’s calls on behalf of Synthetix.

1. Rage Commerce (Size: 40 minutes)

Company: Viperr & AthanaseDove into Rage Commerce’s upcoming integration with Synthetix Perps V3, and their technique for aggregating perps throughout numerous protocols, and cross-chain aggregation.Recording right here

2. Synthetix Perps V3 Evaluate (Size: 45 minutes)

Visitor: SunnyExplored new options, integrator potentialities, and advantages of constructing on V3 infrastructure.Recording right here

3. Tasty Crypto (Size: 45 minutes)

4. SNX Grants

Company: CT & JVKDiscussed Synthetix Grants and their NFT mission, SynthverseRecording right here

5. Ethena Labs (Size: 55 minutes)

Company : Kain, Afif, and Leptokurtic & Conor from EthenaDiscussed Ethena Labs’ integrations with Synthetix Perps and V3, and a dialog across the decentralized stablecoin panorama.Recording right here

6. Chainlink (Size: 55 minutes)

Company: Kemal, Pieter, & NoahDove into Cross-Chain Synthetix, Synth teleporters, CCIP advantages for V3, and extra.Recording right here

✅ Synthetix Governance Proposals

1. SIP-2023: Add XMR to Perps V2 (writer: GUNBOATs)

2. SIP-2024: Add ETC and COMP to Perps V2 (writer: GUNBOATs)

3. SIP-2025: Add MAV to Perps V2 (writer: GUNBOATs)

4. SIP-2026: Add YFI and MKR to Perps V2 (writer: GUNBOATs)

5. SIP-2027: Add RPL to Perps V2 (writer: GUNBOATs)

6. SIP-2028: Add WLD to Perps V2 (writer: GUNBOATs)

7. SIP-2029: Add SEI to Perps V2 (writer: GUNBOATs)

8. SIP-2031: Add stETH/ETH on Synthetix Perps (authors: Seraphim & GUNBOATs)

9. SIP-2033: Listing belongings with Chainlink and Pyth feed deployed on Perps V2 (writer: GUNBOATs)

10. SIP-2022: Add wsteth/usd to Synthetix Perps (writer: Matt, Justin [Lido], Westie, GUNBOATs, Kevin, & MasterMojo) — this SIP was rejected

❤️Particular Thanks: To anybody that delegated to the SNX Ambassadors, thanks! Hope you’re having fun with your airdrop!

What’s subsequent for the Ambassadors?

The Ambassadors largest pushes for Synthetix shall be seen in two primary areas:

1. Companion Assist — Guiding associate initiatives via grant packages and different incentive areas that may finest assist them on Optimism, Base, and so forth. As talked about, they’ve already seen nice success on this space, and have efficiently guided numerous associate initiatives & CCs via these packages (which has helped them safe giant quantities of useful funding).

2. Synthetix V3, Perps V3, and Base Assist — With the upcoming V3 launch on Base, Synthetix should set up a foothold on DEX’s, lending protocols, bridges, and others areas to assist enhance the general expertise. That is one thing that could be a prime precedence for the Ambassadors, and has already begun with Matt passing a SIP to carry wrapped SNX to Base.