[RFC] Synthetix LTIP Grant Extension Request

Proposals
1

Synthetix LTIP Grant Extension Request

Abstract

Synthetix requests an 8-week extension for its LTIP grant to align with the launch of Perps Multi-Collateral and distribute 900k ARB in trading fee rebates. This extension will run from September 16th to November 16th, 2024 (edit: with Snapshot ending dates) aligning the deployment of the remaining grant funds with a major product launch.

Motivation

The Arbitrum community should implement this extension to maximize the impact of the originally approved grant, which targeted LP & stablecoin incentives. By aligning the distribution with the launch of our Arbitrum-exclusive Multi-Collateral Perps feature, we can ensure greater engagement, trading volume, and overall ecosystem growth.

Rationale

Synthetix has experienced unforeseen delays in its deployment of Synthetix Perps on Arbitrum. We originally expected to launch by late July, to align with one month of Perps fee rebates. However, due to audits and other factors, and to ensure the top performance of our Arbitrum-exclusive multi-collateral perps feature, we’ve been unable to hit these targets. As a result, we’ve not utilized 900k ARB from our proposal and would like to seek an extension.

Key Terms

  • Multi-Collateral Perps : A feature allowing users to margin with ETH, BTC, and USDx for perpetual futures trading on Arbitrum with Synthetix Perps.

Specifications

The extension will utilize the remaining 900k ARB tokens from our original proposal for trading fee rebates. These rebates will be distributed over 8 weeks, coinciding with the launch of Multi-Collateral Perps. This approach ensures:

  1. Full implementation of the Multi-Collateral Perps feature
  2. Complete integration with frontend partners, particularly Kwenta as our launch partner
  3. Enhanced capital efficiency with multiple margin options, new trading strategies, trading types, etc.
  4. Improved user experience and market competitiveness as an Arbitrum exclusive launch

Steps to Implement

  1. Launch Multi-Collateral Perps feature on Arbitrum (this week)
  2. Begin distribution of trading fee rebates
  3. Monitor and report on the impact of the rebates and new feature

Timeline

  • Start Date: September 16th
  • End Date: November 16th
  • Total 8 week program from starting date. (Original TBD dates have been edited based on Snapshot timing)

Overall Cost

The extension utilizes the remaining 900,000 ARB tokens from the originally approved 2 million ARB grant. Over the 8-week period, this amount will be fully distributed as trading fee rebates as per our original LTIP grant.

  • Total Cost: 900,000 ARB tokens
  • Weekly Distribution: 112,500 ARB tokens (900,000 / 8 weeks)

No additional funds are being requested beyond the original grant allocation.

Additional Context

We have been working with the LTIP Council, @Matt_StableLab, and others to work out the best path to request this extension, and we started requesting information & guidance on July 21st.

We’ve also posted about our proposed plans in our original LTIP thread which included options on how to best proceed.

We plan to post this on Snapshot, not Tally, next week with the help of @krst, as it does not utilize any additional funds. Any additional comments before this time would be very helpful. Thank you all!

3 Likes
2

Tough situation:
First, the grant was given a specific time frame.
Second, you will have a competitive advantage because everyone else will run out of grant money.

3

Seeing that the main aim is to align the deployment of the remaining grant funding with the release of the main product. Deferred for 2 months. Transparency would be nice and I hope you guys can do a better job

4

We’re very aware that this timeline does tie directly into the detox for incentive programs, and we understand that it may be a limiting factor.

An additional piece of context is that we have been working directly with @Matt_StableLab since mid/late July on the best path to an extension, first waiting on the LTIP Council to decide on how to move forward and then working through the direct-to-DAO option for the last few weeks. Gov guidance changed a few times during this, which has delayed our proposal.

Our main goal here is to align with a successful arbitrum exclusive product launch for Synthetix Perps Multi Collateral on Arbitrum and ensure that we retain TVL, bring in traders, and highlight how this new feature sets us apart.

Regardless of the result, we will be hyper-focused on growth for Synthetix on Arbitrum.

1 Like
5

Snapshot poll will be posted very soon. Dates in this proposal (Sep 16th to Nov 16th) have been edited to reflect the one week necessary for voting.

6

We’re pleased with the level of communication that’s been displayed by Synthetix, and candidly Synthetix reached out to Blockworks prior to notify us of a potential delay.

For reference, we would like to know if there is anything we or the DAO itself can do to better prepare protocols for possible delays. What could be a possible communication channel to relay delays better? Additionally, maybe we should grant power by the committee at large to decide on delay extensions to prevent too much DAO overhead (as we have seen about 5 different extension proposals hit the forums). Preferably this process is streamlined for the future so there is less decision-fatigue on the DAO’s part.

7

Thanks to @krst, we have posted our proposal to Snapshot requesting an extension of our LTIP grant.

We would appreciate any and all support for this proposal so we can make our multi-collateral launch a massive success for Arbitrum users and traders.

For those who aren’t aware, our Arbitrum multi-collateral perps release will use USDx (our arbitrum native stablecoin) as perps margin, as well as tBTC, ETH, SOL (via wormhole), and stables (USDe). This will allow users to leverage their existing assets, employ new trading strategies, and ensure a smooth entrance into the Perps system.

Regardless of the result, we’re prepared to make this a great product for Arbitrum users. Let me know if anyone has questions. Thank you!

8

Thank you very much for the first part of this post. As a member of the OP Grants Council and longtime delegate within DeFi Gov, I think it’s critical that projects take communication regarding grants seriously and aren’t simply rushing to chase grant targets; that’s never good and something we would never do.

Regarding how to improve this process in the future, I think there are a few pieces of feedback I would have:

1 - Create longer-dated programs—12-week (LTIP/STIP) programs are great for limited experimentation, but I would much prefer having longer-dated programs with built-in buffer periods to work through KYC, new guidance from delegates, voting delays, and so on. Plus, the typical operational issues suffered at protocols to handle the distribution and marketing amongst users.

2 - If a delay is needed, I would prefer working directly with an empowered council to streamline the communication between protocols and the DAO. - Currently, protocols are left to coordinate with advisors, various councils, and delegates, making it hard to know which guidance is correct and how they should handle this. For context, we’ve been seeking out the best path to an extension with @Matt_StableLab since mid/late July, at first we worked through the LTIP Council, then direct to dao, then RFC questions, and so on. It’s a pretty confusing process.

3 - Create a process for extension requests - Related to #2, any guidance or process on requesting extensions when programs are approved would be ideal alongside an empowered council that works through whether the delays are within the initially approved reasons for the program, so these are handled within guidance and not created individually for each project.

That’s just some of my feedback on how we can improve this going forward, and I hope it does help drive the conversation in the right direction. Either way, a delay is a delay, and we do not blame the ARB DAO for any of the necessities here, as that is up to us (Synthetix) to handle. We are just sharing how we can improve the process in the future.

Thanks!

9

Sorry for not jumping in the conversation earlier, but I would like to leave a comment, as I will vote analysing each specific extension request:

When applying for the program, everyone knew that the sprint was short (as it was a pilot for a long duration program). In your particular case, it seems that it was a development delay (it happens all the time) that prevented the full utilization of the grant.

However, you guys distributed over 1m ARB in this period, and the request for the extension, like it was already pointed out, will come in a period with no other incentives program.

It would be wonderful to match a new release with an incentive program, but this situation seems not fair to other protocols that don’t have the opportunity to match these extra incentives in this period.

10

Similar to Pyth, Synthetix has performed well in the LTIPP, benefiting both the protocol itself and the Arbitrum network significantly. Initially, I had some reservations about the 900,000 ARB budget request, as it’s not a small amount, especially since I firmly believe in the principle of achieving more with less. However, I later learned that the LTIPP had already allocated a 2 million ARB budget for Synthetix, and this proposal is merely requesting the remaining unspent portion. With that understanding, I no longer have any objections, and I support this proposal.

11

I abstain because while the extension seems beneficial, it introduces concerns about fairness to other protocols without similar opportunities. The lack of a streamlined process for handling delays makes it difficult to confidently support this specific request.

1 Like
12

Voting FOR this proposal on Snapshot. As an early Synthetix user/spartan, I’ve seen it grow into a DeFi powerhouse with real usage. Perps on Arbitrum are a big deal, boosting trading options and liquidity. This 8-week extension makes sense as it aligns with the launch of Multi-Collateral Perps. SNX is key to Arbitrum’s DeFi scene, and keeping up the momentum with these rebates is a net-positive for the ecosystem.

13

understand your situation and would appreciate it if you could provide us with some information to assist us in our decision-making.

Are there any details about your new product, including documentation, a demo version, or images of your Perp DEX and native stablecoins?

14

Thank you for this detailed feedback.

I am, unfortunately, voting against this and all the other extention requests in Arbitrum.
I would have normally been in favour if it wasn’t for the detox proposal just recently presented, and passed, in our DAO; but that proposal is an extremely important signal about 1) trying to see what happens to our chains with no incentives 2) give the time to the DAO to best reflect how to weaponize these programs in future. There is also the secondary point, not necessarily as important but indeed important, about competitive advantages of protocols asking for an extention versus protocols that just finished in LTIPP or about to finish in STIP.

But I also want to add a few things. I really feel you about first, the excitement of participating to this program, and then the constant small delays of integrations and tech development that turn out to be eating more and more week over week on the timeline, up to the point you had to come here to ask for this extention; I have seen this happening, and even in the protocols i work for we had to take hard and complex decisions due to delay of partners’ integrations.
As you already partially mentioned most of the issue would be addressed by a longer program, in which of course we need to embed a process for these and other similar situations: if you have 1 year, and you need to skip the first three months for technical issue, you will still have a way in.

Finally, i want to commend the effort the synthetix team made to come to arbitrum. You decided to go for a specific push in our chain, with an ad-hoc application and obviously a lot of work behind it, on a product level, strategic level and marketing level, and what did happen is indeed unfortunate but also something quite common in the tech world. For this reason, in the next program, I will be one your stronger supporter fwiw.

1 Like
15

I think Pyth is trying to find a middle ground with their extension request of a lower value, not all the remaing ARB of the grant. Is it possible to consider doing something similar?

1 Like
16

In favour of the proposal, I see the important points mentioned here: the Arbitrum Multi-Collateral Perpetual Contracts release will use USDx (our Arbitrum native stablecoin) as the perpetual contracts margin, as well as tBTC, ETH, SOL (via wormholes), and stablecoins (USDe). This will allow users to utilise their existing assets, adopt new trading strategies and ensure a smooth entry into the perpetual contract system. It looks complex and offers a different perspective on the arb ecosystem.

17

Blockworks Research is voting FOR this proposal.

Seeing as though Synthetix and Pyth both came to the DAO earlier, we believe this behavior should be merited to some degree. While it wasn’t as early as we all would’ve liked it shows initiative and honesty which is paramount in a decentralized workspace with limited accountability. The deadline for the program was September 2nd, 2024, and seeing as though Synthetix and Pyth posted these extensions prior to the deadline we believe that this warrants some leniency. The DAO should reward rational process, not punish it. LTIPP deemed itself incapable of granting extensions to incentives, rationally so, and thus the reasonable course of action was for Synthetix to propose directly to the DAO.

We can vouch for Synthetix in that they are actively shipping new products. They launched perps trading for Base in April. On June 18th they opened liquidity provision for their Arbitrum pools. These are not bare bones integrations either – Synthetix is attempting to have experimental assets as collateral for their pools as well, which makes for tricky risk management. Then there’s the added governance process of voting to add additional oracles, etc for Arbitrum’s deployment specifically.

We understand @JoJo’s perspective that this proposal, like others, could come across as somewhat reactionary and an attempt to navigate through the incentive reduction with the remaining grant funds. However, it’s important to highlight that proper process was followed earlier, and there is a time-sensitive aspect to the incentives that should be considered.

Now, it may be rational to ask Synthetix to lower the amount retained and set some precedence similar to Pyth. This would help maintain alignment with Pyth’s similar request and fairness overall.

1 Like
18

Although the Grant Extension Request is necessary and I give the green light, there are still 2 issues:

  1. Vague reason for the delay: The proposal mentions that the launch of Synthetix Perps was delayed due to audits and other factors, but it does not provide detailed information about the audit issues or other factors that may have affected the timeline. DAO members might have concerns about this vague explanation for the delay.
  2. Lack of performance metrics: While the proposal outlines the 8-week extension plan, it does not provide clear KPIs to measure the success of the extension. For example, what level of trading volume growth or user engagement would be considered a success?

I hope that during the Extension phase, there will be better measurements of progress to ensure that the whole process could be completed according to the schedule.

19

We will be voting against the Synthetix LTIP Grant Extension at this time, as the Detox Proposal has just passed, signaling a need to pause and reassess incentive programs. While Synthetix has performed well, granting an extension would create an unfair advantage over other projects that have completed their incentive periods without extensions.

20

I voted abstain. On the one hand i would support Synthetix, on the other hand not because of the “unfair” advantage their perp would/could get.