SIP-367: Synthetix V3 Deployment to Arbitrum

Simple Summary

This proposal outlines a plan to deploy Synthetix V3 & Synthetix Perps on Arbitrum.

Abstract

The isolated deployment will launch Synthetix on Arbitrum with a focus on progressive scaling. Initially, the system will enable LP deposits and stablecoin minting against LP collateral, then enable Synthetix Perps for trading on Arbitrum. The deployment features include an Arbitrum-native stablecoin, LPing functionalities, and a comprehensive Synthetix Perps launch. The Arbitrum deployment will experiment with the usage of additional collateral types, including ETH, USDC, DAI, and ARB.

Motivation

The expansion to Arbitrum is motivated by the desire to launch on a chain with increased DeFi/Perps trading activity, at a time when Synthetix and its ecosystem is prepared to onboard traders across multiple chains. This deployment will complement Synthetix's cross-chain strategy encompassing Optimism, Base, and now Arbitrum. Alongside this, Synthetix is applying to be a recipient of the LTIP program, to support the initial scaling up of the system on Arbitrum. By beginning with targeted incentives and carefully staged functionality rollout, the protocol aims to solidify its presence and utility for users on Arbitrum.

Deployment Plan

This SIP concerns itself with the Pre-Launch and Beta Launch plans and timeline below. Collateral Onboarding and Enabling Synthetix perps are provided for context only.

1. Pre-Launch Preparation Deploy to Arbitrum testnet, begin risk assessment, analyze differences between Arbitrum & existing deployments.
2. Beta Launch Phase (By March 17th) Deploy Synthetix V3 Omnibus on Arbitrum, initially activating LP deposits and stablecoin minting.
3. LP Rampup & Collateral Onboarding Attract a critical mass of LP collateral which can be used to issue stablecoins.
4. Enabling Synthetix Perps Enable the Synthetix Perps market, allowing users to delegate their collateral and subsequent liquidity to Synthetix Perps.

Gradually enable trading activities, starting with limited volumes to manage risk.

Incentive Programs

The three incentive programs listed below are contingent on receiving the Arbitrum LTIP grant and are provided here for context only.

• LP Incentives: Launch with one month of liquidity provider incentives to encourage initial scale and liquidity.
• Stablecoin Support: Deploy one month of incentives specifically designed to support stablecoin liquidity on Arbitrum.
• Trading Incentives: Introduce one month of incentives to stimulate trading activity, these incentives are targeted towards trading fee rebates, trading competitions, and other growth experiments.

Specification

Overview

Synthetix will deploy the V3 omnibus package containing the V3 core system, Oracle Manager, Spot Market, Synthetix Perps markets. The implementation of the core V3 system will allow Synthetix to establish the core contracts on Arbitrum, allowing users to LP the following collateral types: USDC, DAI, ETH, and ARB while minting an Arbitrum-native stablecoin against their collateral as outlined below.

The Synthetix Perps market will be paused upon initial deployment, with no tradable markets. LP Collateral (max amount / issuance / liquidation)

• DAI 500K / 120% / 105%
• USDC 500K / 120% / 105%
• ETH 125K / 200% / 125%
• ARB 100K / 300% / 150%

Spot Market Wrappers

• USDC Wrapper - 500k cap
• DAI Wrapper - 500k cap

These spot markets will allow users to wrap/unwrap DAI/sDAI and USDC/sUSDC 1:1, but will exchange for the stablecoin at price provided from Pyth, with a staleness no older than 24 hours.

Test Cases

Arbitrum Sepolia Omnibus to be deployed and audited ASAP

Configurable Values (Via SCCP)

• Stablecoin name/symbol: "DollarWifHat" / "USDh"
• Minimum Liquidity Ratio: 200%
• LP Collateral (max amount / issuance / liquidation)
• Perps toml file active/inactive