SIP-132: Add Volume Program to the Synthetix Protocol

SIP-132: Add Volume Program to the Synthetix Protocol
Author: @AndrewT
Created: 2021-04-19

Simple Summary

I propose that the Volume Program, an initiative manually operated by the Core Contributors that rewards projects generating Synth trading volume for the Synthetix Protocol, be taken out of its trial period and added into the protocol as a long-term feature.

Abstract

If implemented, the Volume Program would be built into Synthetix smart contracts, enabling members to track and claim their rewards through contract calls.

Motivation

By building the Volume Program directly into the Synthetix protocol, Synthetix will formalize the Volume Program into a permanent feature thereby optimizing the experience for Volume Program members, reducing the risk of human error, and further decentralizing an important component of the Synthetix Protocol.

Context

The Synthetix Volume Program is an initiative designed to incentivize native integration of the Synthetix protocol across DeFi platforms and protocols by providing a new revenue stream for these projects. This program offers a fee rebate to approved integrators who implement Synth-to-Synth swaps natively and generate protocol exchange volume through their interfaces. The program launched Midnight UTC on the 1st of September 2020 and has steadily grown since.

Although several projects are integrated with Volume Program, there are currently four projects that routinely receive Monthly rewards:

  • Curve
  • dHEDGE
  • 1inch
  • Enzyme

Volume Program members have brought in over 1 Billion USD in Volume for the protocol.

Rewards Structure

Volume Program rewards are currently funded by the sDAO. At the end of each month, 25% of all fees generated by individual members are rebated in the form of SNX. However, if formalized, I propose that 4000 SNX, taken from the inflationary rewards supply, be divided amongst Volume Program members at the end of each month. The amount of the SNX a Volume Program member would receive would be based on the proportion of fees generated by the Volume Program that each individual is responsible for.

Example

If the fees generated by Volume Program members over the course of a month were as follows:

  • Curve: 400,000 sUSD
  • dHEDGE: 300,000 sUSD
  • 1inch: 250,000 sUSD
  • Enzyme: 50,000 sUSD

The Members would receive this breakdown of SNX rewards at the end of the month:

  • Curve: 1600 SNX
  • dHEDGE: 1200 SNX
  • 1inch: 1000 SNX
  • Enzyme: 200 SNX

The amount of SNX taken from the inflationary supply can be altered in the future at the discretion of the Spartan Council via an SCCP.

Eligibility

During the trial period of the Volume Program, participants were required to fill out an application form. Core Contributors reviewed these applications and determined which projects were optimal for the program. The criteria Core Contributors looked for included the ability to produce trading volume for the protocol and the condition that applicants were building a product designed for end users to generate this volume. Once formalized, the Spartan Council members would vet Volume Program applicants.

Technical Specification

TBD

Copyright

Copyright and related rights waived via CC0.