DeFi

ETH Mainnet Legacy Spot Synth Migration

As outlined in SIP-2059, Synthetix is deprecating the alternate of non-USD spot synths on Ethereum Mainnet (L1) and making ready emigrate customers to the V3 system. This replace requires motion from customers holding sETH, sBTC, or different spot synths apart from sUSD

ETH Mainnet Legacy Spot Synth Migration

As outlined in SIP-2059, Synthetix is deprecating the alternate of non-USD spot synths on Ethereum Mainnet (L1) and making ready emigrate customers to the V3 system. This replace requires motion from customers holding sETH, sBTC, or different spot synths apart from sUSD. The migration will assist transfer liquidity to V3 and handle the V2X skew.

Key Factors:

  • Spot synth exchanges (and atomic swaps) are being deprecated on the fifteenth of April on Ethereum Mainnet.
  • Spot Synth exchanges on V2X Optimism won’t be impacted.
  • Customers can swap their sETH, sBTC, and different non-USD spot synths by the fifteenth of April.
  • After the fifteenth of April, any remaining non-usd spot synths can solely be redeemed by way of the L1 redeemer contract on the Chainlink value for sUSD.
  • The Spartan Council signaled their intention to decrease the low cost issue, which implies customers would obtain fewer sUSD than is predetermined by the Chainlink value. Customers ought to exit earlier than this mechanism is applied. Additional bulletins might be made earlier than this motion is taken.
  • Migrating liquidity to sUSD will assist introduce liquidity for sUSD and ramp up actions on Synthetix V3.
  • This modification helps steadiness the skew, as V2X Spot Synths don’t naturally steadiness, not like V3 Spot Synths, which impose a value affect primarily based on the skew, just like the design of Synthetix Perps.
  • On account of this variation, skew is anticipated to grow to be impartial and cut back/take away its present publicity to ETH/BTC.

The present spot synths generate minimal charges for the protocol and create important hedging prices and debt pool imbalances for SNX stakers. In V3, spot synths like sETH might be hedged by imposing value affect primarily based on the skew, just like how Synthetix Perps incentivize merchants to take care of delta neutrality. Deprecating the alternate of those spot synths after which incentivizing customers to swap out these property is important to supporting the launch of recent merchandise inside Synthetix V3.

Customers holding sUSD won’t be diluted by way of a reduction charge; customers holding sUSD won’t must do something. Additionally, customers holding non-USD spot synths on Optimism wouldn’t have any subsequent steps – solely customers on Ethereum Mainnet are impacted.

Subsequent Steps for Customers:

  1. Verify your pockets for any sETH, sBTC, or different spot synth holdings (apart from sUSD).
  2. Go to 1inch, Curve, or Kwenta to swap out synths to sUSD or non-synths earlier than April fifteenth.
  3. Should you miss the deadline, you may nonetheless redeem by way of the L1 redeemer contract, permitting you to swap non-USD synths to sUSD on the Chainlink value on April fifteenth.
  4. To swap out of sUSD, please use aggregators.
  5. If you don’t swap out by the preliminary deadline, the Spartan Council could start making use of a reduction charge that dilutes the worth of your spot synths.

This timeline offers enough discover whereas transferring the protocol ahead into Synthetix V3, which launched a extra optimized, sustainable mannequin of providing spot synths with out sustaining the hedging dangers that the V2 system suffered from.

Please attain out on Discord with any questions.

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