October 11, 2023
The following post contains a recap of news, projects, and important updates from the Spartan Council and Key Contributors, as well as the Grants Council and the Council of Ambassadors from the past week.
- PoC for cross-chain pool composition (SIP-312) continues — CCs are investigating a solution using Wormhole
- Testnet trading competition is still live, the CCs have spotted some key changes
- The focus now shifts to staking dApp for V3
- SC & CC had extensive discussion on this profitability of the integratorread below for full details
- Grants Council Update: The team is considering a retrospective grant to Copin, the Watcher Page is live, CT is working on final touches to the governance document, NFT free mint will drop soon, the Notifi project with Matt is being tested with The 300
Spartan Council and SIP updates
Attending the October 4, 2023 Spartan Council Weekly Project Sync:
Spartan Council: Adam, Burt, cyberduck, Genefaesius.eth (Gene), Jackson, Millie
Key Factors: Afif, Cavalier, KALEB, noah, Noisekit, sunny, troy
First, to update our work in progress, the proof of concept for cross-chain pool composition SIP continues to develop. CCs are exploring a solution using Wormhole, which is a multi-chain messaging platform that allows developers to build decentralized applications that span the entire blockchain ecosystem. Wormhole is currently working on a product called cross-chain queries, which comes closest to meeting the technical specifications required for Synthetix of any cross-chain messaging solution.
For markets, the testnet trading competition is still alive! Most of CC’s attention has been on the competition this past week as they have spotted some key changes. The focus now shifts to the dApp stake for V3 as more realistic data comes in from the competition. The CCs are also in the process of reviewing the second audit report for SIP-337, Perps V3, and its corrections are nearing completion.
In other discussion, SC and CC discussed the profitability of the integrator last week, with Burt bringing up the cost of the integrator. He said the operating cost for Kwenta is about $200,000/month. Kwenta has received some grant from the OP, but this is not expected to be an ongoing source of funding to cover operating costs, so looking forward, the fee sharing should provide enough incentive to keep Kwenta going (and probably other integrators).
Millie reported that Synthetix generated $1.2 million in fees in the last 30 days, so three integrators at $200,000 per month would require a fee share of over 50%. Bart reacted by saying more some The commission share will free up funds that could be used for further development and promotion that could lead to increased volume. He continued, saying that the goal should be to set achievable goals for both integrators’ profitability and Synthetix’s net benefit.
Kwenta, Polynomial and Rage are all up 30% as a starting point for the discussion (on some combination of fee share and Treasury locked SNX). This is the number at which integrators feel they may be able to support their operations while still adding value to the ecosystem.
Adam said he probably wouldn’t vote more than 20% if there wasn’t a clear, measurable plan to increase volume. He also pointed out that this creates an incentive for integrators to participate in the development of the collateral base, which creates better alignment between partners. If a portion of this funding is diverted to SNX for staking, the effective rate will be closer to the 30% target, after staking rewards are factored in.
Duck also said it would fall somewhere between 20-30%, maybe 20% in sUSD and possibly 10% in locked SNX. The idea of 25% while requiring 5% open market purchases was also discussed, which has the added benefit of supporting the SNX price and creating more protocol liquidity which increases volume.
Gene is concerned that a fixed fee share can extract value directly from participants without necessarily having the effect of increased volume. Burt responded to this by saying that Kwenta, as the biggest driver of perps volume in the ecosystem, would benefit from a tiered fee share structure, but believes a fixed fee is better optimized to create competition. Gene countered by saying that the tiered system incentivizes “growing the pie” and simply increasing the share of the fee wouldn’t necessarily force integrators to chase more volume. He recognized that the model is not sustainable for integrators as it is now and that the fee share needs to be increased. But even at 20%, he said he would like to see it come with some conditions.
Present at the Grants Council meeting on 5 October 2023:
Grant Group: ALEXANDER, CT, synthquest
In the Grants Council updates, the team is considering a retrospective grant for Copin, as well as various community members who have contributed to the open source programming work. The Watcher Page is also live and CT is working to add finishing touches to the governance documents. AND NFTs coming soon as a free mint!! Keep your eyes peeled for an announcement there.
Also, that project we mentioned a few months ago with Notifi that Matt brought to GC’s attention? Well, it’s almost over! Matt shared Notifi with The 300 to test it out. It will serve as Synthetix’s new notification solution and help deliver real-time C-Ratio notifications, account summaries, reward reminders, announcements and more to users. If all goes according to plan, this will be available to the public soon!
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SIP/SCCP Status Monitor:
SIP-312: Cross-Chain Pool Synthesis, Status: draft
SIP-337: Perps V3, Status: draft