STP-4: V3 SNX Staking Pool

Author	Kain, Cav
Status	Draft
Implementor	TBD
Release	TBD
Created	2023-06-09

Simple Summary

This STP proposes to allocate funding to create and launch a trial SNX staking pool on Synthetix V3 to introduce users to the new system and identify any potential issues in a controlled manner before the full-scale launch.

Abstract

This STP proposes a change in terminology ahead of the Synthetix V3 transition. "Staking" will now describe depositing SNX without allocating it as collateral, with stakers receiving a small percentage of fees generated by traders. What is currently called SNX staking will now be referred to as "SNX Liquidity Provisioning". This will be equivalent to the current SNX staking, where SNX is used as collateral, and users will allocate towards specific V3 markets of their choosing. As with staking in V2x, these LPs will be required to hedge their debt and monitor their collateral ratios. SNX LPs will receive all fees generated by the platform, less any fees allocated to stakers and integrators.

Motivation

The Synthetix protocol is preparing to transition to version V3. To ensure this transition is as seamless as possible and to avoid potential setbacks, it is critical to conduct thorough testing of the new system. However, testing the protocol in a real-world environment has inherent risks. Therefore, this STP proposes the establishment of a trial SNX staking pool on the V3 platform to provide a low-risk testing ground for the protocol.

Specification

Overview

The proposed SNX staking pool will be created using the new Synthetix V3 platform, funded by treasury funds. This pool will not allow borrowing against the SNX collateral. The implementation of this STP requires several SIPs, which will be published soon. This STP covers the intent behind this pool and the funding to be allocated by the Treasury Council.

Rationale

Creating a trial staking pool on the Synthetix V3 platform provides a valuable opportunity to understand the system's dynamics, behavior, and potential issues before the full-scale launch. This process will minimize the risks associated with migrating to the new protocol and ensure a smoother transition for all stakeholders.

Financial Specification

The precise amount of funding to be allocated from the Synthetix treasury will be determined and specified following further discussions within the community and an in-depth analysis of the necessary resources. The funds will be used for the creation and management of the trial SNX staking pool, as well as any associated costs, such as rewards for stakers in the pool.