rewrite this title SNXweave Weekly Recap 171

March 5, 2025

The following post contains a recap of news, projects, and important updates from the Spartan Council and Core Contributors from last week.

👉TLDR

SIP-420 update:CCs working on migration and poolsLooking for migration testers to enter the new SIP-420 staking pool during the pre-commit periodRationale behind transition from discretionary to delegated staking:Synthetix users have not been great custodians of sUSDDelegated staking model means the protocol will be the sole minter and manager of debt & allow a more strategic deployment of sUSD across yield opportunitiesYield proceeds will ideally directly accrue to stakers (as opposed to a buyback and burn strategy which accrues to all SNX holders)Another incentive to stake is the planned debt relief over a 1-year period (see below)Base update:Strong volume in recent days: $50 million/day TWICE last weekMinor error in the stats: showing lower APR for LPsSeveral recent UI improvementsAccount Abstraction coming soonCommunity questions (and answers) from last week’s Spartan Council Sync: see belowEXTENDED rewards for sUSD depositors on Infinex (6 more weeks):Deposit $1,000 or more sUSD into your Infinex account10,000 OP distributed weeklyWeekly raffle prizes: 3 winners (1 entry for each $1,000 sUSD deposited)New Perps markets on Synthetix Exchange:IP by Story ProtocolKaito by KaitoAIOM by MANTRA Chain

Spartan Council and SIP updates

Last week Fenway gave the community an update on SIP-420, so let’s dive into that first.

The CCs have been working on the migration and setting up the pools for users to migrate to — Fenway is confident that this will get to market for pre-release soon. There was also an announcement last week for any migration testers who want to enter the new SIP-420 staking pool during the pre-commit period.

He then went on to explain the rationale behind the decision to transition from discretionary to delegated staking. Historically, Synthetix users have not been great custodians of sUSD. The stablecoin is minted to stakers and often times makes its way to users outside of the community who have no real use for sUSD, which creates downward pressure on the peg as debt mounts against the outstanding sUSD balance.

In a delegated staking model, the protocol would become the sole minter and manager of the debt. It will also allow for a more strategic deployment of sUSD across yield opportunities, including Ethena, AAVE, and other yield instruments.

The goal is for the proceeds of this yield to accrue directly to stakers, as opposed to a buyback and burn strategy which accrues to all SNX holders. This provides an individual incentive to stake to the delegated pool rather than just holding SNX.

Another incentive to stake is the planned debt relief over a 1-year period (with a heavy penalty for early withdrawal):

Only 12.5% of debt is relieved if you withdraw before 6 months50% relieves from 6–12 months100% relief at day 366+

Nobody will ever owe more debt than they initially delegated to the pool, and there will be no liquidations for users delegating to this pool. The delegated staking model also allows for the protocol to direct sUSD liquidity across the Synthetix product suite, which would improve user experience and bootstrap liquidity for newly launched products.

Next, as a quick Base update, volume has been strong in recent days, topping $50 million/day TWICE last week. There was a minor error in the stats that were showing a much lower APR for LPs than they were actually receiving (the correct yield is 30%, which should attract more LPs). There have also been several UI improvements recently and Account Abstraction should be coming soon as well.

During last week’s call there were some questions from the community, so let’s briefly review them:

How do you migrate?Fenway said to be on the lookout for more information for early testersWhat happens if you stake SNX that doesn’t have any associated debt?Phase 1 will be to migrate all the debt positions to the delegated pool Phase 2 will include some incentives for debt-free SNX to delegate to the pool (and incentives would be in place of “debt jubilee”)Who is the pool governed by? It will be governed by the Spartan Council and an SCCP will be required to create guidelines on how the debt is to be used.Will there be priority given to arbitraging your own funding rates?Fenway said CCs are looking at developing vaults beyond just LP vaults that will enable the protocol-directed pool to fund arbitrage and capture basis trade yield from the Synthetix exchange. Any organic use case for sUSD (such as using it to facilitate trading activity) is more attractive than incentivizing curve pools, and those options are being actively explored.

Also, ICYMI, rewards for sUSD depositors on Infinex have been extended for another 6 weeks! All you have to do is create an Infinex account, deposit at least $1,000 in sUSD, and earn weekly OP rewards. 10,000 OP will be distributed weekly, and rewards will be pro-rata based on total deposits. There will also be weekly prize raffles, with 3 winners each week, where every $1,000 sUSD deposited = 1 raffle entry:

🥇1st: 1x Patron🥈2nd: 1 ETH🥉3rd: 1,000 SNX

Get earning!

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