Scaling sUSD & Migrating SNX

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

Accelerating Actual Yield

The earlier V2x system primarily incentivized participation by way of the inflationary minting of the SNX token. Nonetheless, Synthetix V3 shifts away from this mannequin, as a substitute 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 targets 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 will probably be backed by a variety of collateral property, together with SNX, ETH, USDC, yield-generating collateral (stataUSDC), and different governance-approved tokens. This enlargement of collateral choices will contribute to the scalability of the sUSD stablecoin in V3.

Alongside this, LPing (beforehand staking) is simplified in Synthetix V3, attributable to 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 important step in 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 will probably be elevated to 10,000 OP tokens per week. Each Velodrome and Synthetix will probably be using their OP sUSD development grants to assist 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 will probably be deployed to Optimism, and the migration course of will prolong 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 will probably be migrated to a brand new V3 sUSD (snxUSD) token. This new stablecoin will probably 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 strong ecosystem of by-product protocols upon Synthetix liquidity and infrastructure. The V3 migration represents a important step in direction of realizing this imaginative and prescient and enabling an ecosystem of builders, merchants, and liquidity suppliers to scale onchain derivatives.