GF:Phase 0 Proposal] Synthetix

Author Name: Millie

Defillama TVL (at snapshot): $205M

Transactons/day (at snapshot) : 693

Tier: 1

Optimism native: yes

Number of OP tokens to claim: 9,000,000

L2 Recipient Address: 0x9644A6920bd0a1923C2C6C1DddF691b7a42e8A65

Proposal for token distribution (under 1000 words):

  • 2M $OP for Grants
  • 3M $OP for sUSD liquidity and bridging incentives
  • 4M $OP to incentivize an SNX/sUSD pool on Optimism

The Distribution of OP tokens as proposed by Synthtix governance is mainly to targeted to incentivize the migration of SNX stakers from Eth-Mainnet to Optimism.

Current Integrations

Synthetix and Optimism have a rich history of integration ever since the launch of the Optimism test-net many years ago. Well before any $OP incentive program was launched, Synthetix governance had already committed to developing the protocol such that the majority of the infrastructure would be on Optimism.

These integrations included but weren’t limited to: custom SNX and sUSD bridges, an L1-L2 messaging mechanism for system debt, a debt migration mechanism, a Perpetual Futures protocol, the sponsoring of several Oracle feeds, the development of a novel governance mechanism (V3GM) and a full redevelopment of our codebase on L2 (Synthetix V3).

How will this distribution incentivize usage and liquidity on Optimism?

In light of the integrations mentioned above there are several bottle necks which are a hinderance to further migration to Optimism and this proposal aims to alleviate those restraints through use of incentives.

A significant portion of SNX/synths remain on Mainnet, mainly because liquid markets for SNX and synths reside on L1, combined with the constraints of a seven day withdrawal period to access those markets from Optimism. The distribution of $OP to SNX/sUSD LPs and sUSD LPs on Optimism is designed to create a similar liquidity environment to that of L1 so that the remaining major SNX and Synths holders feel comfortable migrating to L2.

In addition Synthetix plans to use 2M $OP tokens for builder’s grants and highly targeted incentives to further construct Synthetix adjacent infrastructure on Optimism.

The use of our $OP token allocation will enable our existing products on Optimism to see exponential growth in usage from the bandwidth that will be made available with increased liquidity. We expect to see a significant uptick in usage of our Perp product from large traders and institutional players once the liquidity conditions enable it, resulting in major adoption of Optimism.

Why will the incentivized users and liquidity remain after incentives dry up?

We expect the majority of liquidity we are incentivizing to remain on Optimism post incentives because it is targeted to facilitate the migration of large SNX stakers and Synth holders from Mainnet to L2. Our L1 stakers and synth holders are accustomed to much fewer incentives on L1 and would easily adapt to reduced incentives on L2 once this incentive campaign ends. Further more we believe that once our infrastructure on Optimism is mature enough (roughly 6-9 Months) and potential CEX support for SNX on L2, that all of our stakers and synth holders will fully reside on OP.

How much will your project match in co-incentives?

Synthetix Governance, has been and still is, heavily incentivizing the migration of SNX stakers to Optimism since before the $OP token was even announced, by diverting 40% of total inflation to staking on layer 2 (SCCP-189: Change SNX inflationary distribution ratio), with plans to increase those incentives proportionally to the available liquidity on Optimism over the coming months, as well as a lesser amount in perpetuity.
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Synthetix Governance has also been incentivizing synth LPs on Curve since before the $OP token was announced (Synthetix & Lyra Incentivize sUSD liquidity on Optimism) and we plan to continue these incentives along side the $OP distribution and a sustainable amount in perpetuity.
Screen Shot 2022-05-26 at 5.08.03 PM

Over what period of time will the tokens be distributed?

The $OP tokens will be distributed over a 6month timeframe.

68 Likes

Nice to see this proposal from Synthetix. Fully support this!

9 Likes

Synthetix is a game changer in the defi world, I believe it will change a lot with him here at optimism. Fully support this!

5 Likes

Synthetix and Optimism changeing world of defi on L1 to L2 and millie increased value more.

As a staker, i was hoping for some staking rewards, but this proposal would eventually scale and grow the entire OP AND SNX ecosystem.

2 Likes

I would love to see part of this token distribution focused on Education. Migration of SNX to OP was built by developers and the ecosystem needs more. Awesome proposal either way! Thanks, Millie :heart:

2 Likes

This is great. A well thought out plan to get everyone to L2 where they ought to be anyways IMO!

Synthetix is one of most significant first movers and testers on Optimism. Fully supporting - havent analyzed exact numbers but SNX made great move incentivising staking on L2 with almost 2x rewards.

1 Like

This is a great idea, part of the 2M OP for grants could definitely be used for educational content on Optimism and Synthetix!

2 Likes

Great to get the chance to use Optimism and Synthetix as intended, Chainlink support up and running I assume now, full speed ahead :slight_smile: 100 percent support the proposal

Cheers

Totally support this. Synthetix ecosystem was my entry point to optimism and this community is aligned with buildout of optimism - good to add some gas to the fire.

Hey Optimism Gov,

It has come to our attention that we omitted the Recipient Address for our allocation and that I no longer have edit permissions on the original post.

Here is the address for the Synthetix Treasury on Optimism which will be accepting Synthetix $OP allocation: 0x9644A6920bd0a1923C2C6C1DddF691b7a42e8A65

1 Like

I’ve gone ahead and edited the original post to include the address that you linked. Please double check the address in the post to confirm it’s correct.

2 Likes

yes it appears to be correct thank you!

1 Like

Nice to see this proposal from Synthetix. Fully support this!

Great idea! I’m just curious what that education would look like specifically.

great project i,m in it

So, when will the project party get the OP airdrop? It is very important for the project party to plan the OP obtained from the airdrop!

I think we have to educate more developers tbh. If web3 wants to thrive as web2 did, we need as much smart contract devs as web developers today. Better tools would be awesome too.

I agree with this, I find it hard to understand how liquidity incentives is the main use for public goods funding in all the proposals not just this one.

The space needs more developers and innovators not more farmers!

1 Like