Scaling sUSD & Migrating SNX

Synthetix is present process a pivotal part of the V3 rollout, introducing a brand new basis and structure for the protocol. This transition additionally marks a big step in the direction of enhancing the scalability and decentralization of the Synthetix stablecoin, sUSD.

Accelerating Actual Yield

The earlier V2x system primarily incentivized participation via the inflationary minting of the SNX token. Nonetheless, Synthetix V3 shifts away from this mannequin, as an alternative specializing in:

Producing and distributing actual yield from buying and selling charges to liquidity providersIntroducing a buyback and burn mechanism, the place buying and selling charges will buy and take away SNX from circulating, aligning incentives for SNX stakers and holders.

This new method aligns with Synthetix’s objectives of scaling a decentralized derivatives ecosystem constructed upon its liquidity and infrastructure.

Increasing sUSD Collateralization

Within the V2x system, sUSD was collateralized solely towards the native SNX token. With V3, sUSD shall be backed by a spread of collateral belongings, together with SNX, ETH, USDC, yield-generating collateral (stataUSDC), and different governance-approved tokens. This growth of collateral choices will contribute to the scalability of the sUSD stablecoin in V3.

Alongside this, LPing (beforehand staking) is simplified in Synthetix V3, as a result of its delta-neutral design for each Synthetix Perps & Spot Markets, making it simpler for customers to take part within the ecosystem.

Facilitating the V3 Migration

The migration of SNX and sUSD from the V2x system to the brand new structure will start in June, signaling a essential step in the direction of scaling the brand new system. To facilitate the upcoming migration, a number of supporting measures start subsequent week:

Elevated OP incentives for sUSD liquidity on Velodrome (Optimism): Incentives for offering liquidity within the sUSD/USDC pool on Velodrome shall be elevated to 10,000 OP tokens per week. Each Velodrome and Synthetix shall be using their OP sUSD development grants to help this initiative.SNX Incentives for sUSD liquidity on Curve (Ethereum Mainnet): Synthetix will introduce 20,000 SNX tokens per week in incentives for liquidity suppliers within the sUSD/USDC/DAI/USDT pool on Ethereum Mainnet.

Migration Plan and Mechanics

The migration to Synthetix V3 will proceed in two phases:

Ethereum Mainnet Migration: SNX stakers on Ethereum Mainnet will have the ability to migrate their positions to V3 in June.Optimism Migration: Following the Ethereum Mainnet migration, Synthetix V3 shall be deployed to Optimism, and the migration course of will lengthen to Optimism SNX stakers.

The migration mechanics outlined by SIP-306 present a transparent framework for the transition:

SNX Migration: The SNX token will proceed and be migrated from Synthetix V2X to V3 with out the need for burning staker debt. sUSD migration: sUSD shall be migrated to a brand new V3 sUSD (snxUSD) token. This new stablecoin shall be collateralized by SNX, ETH, USDC, and different governance-approved collateral sorts, contributing to the scalability and resilience of the Synthetix stablecoin.

Because the transition to Synthetix V3 involves fruition, the main focus stays on constructing a scalable, decentralized, and sturdy ecosystem of spinoff protocols upon Synthetix liquidity and infrastructure. The V3 migration represents a essential step in the direction of realizing this imaginative and prescient and enabling an ecosystem of builders, merchants, and liquidity suppliers to scale onchain derivatives.