SIP 121: Support for L2 Synths Source

AuthorDavid Goldberg
Discussions-ToTBD
StatusProposed
Created2021-03-04

Simple Summary

Provide support for sETH, sBTC, sLINK synths in addition to sUSD on L2. Implementation of these synths on L2 is dependent on a satisfactory risk analysis about front running capabilities on L2. An analysis on that is still be evaluated. Beyond these 3 synths more synths may be added in the future.

Abstract

This SIP proposes adding support for minting and exchanging the following synths to L2: sBTC, sETH, sLINK.

Motivation

To enable Kwenta and Minting on L2 to be consistent with L1 we want to make more synths besides sUSD available. Adding a range of new Synths on L2 will allow traders to speculate on the value of some of the best-known tokens in the ecosystem. This update is intended to attract more traders to Kwenta, adding to the growing list of available Synths. It’s important to attract new traders to the platform, because the entire protocol is built around rewarding SNX stakers with fees generated by trading volume. Additionally when liquidity pools like Uniswap V3 become available on L2 it will be beneficial to the protocol to capture liquidity incentives in synth pairs beyond just sUSD. For example cross asset swaps between sUSD, sETH, amd sBTC should be quite beneficial to offer near zero slippage.

Specification

These Synths will be implemented in the same way as the other Synths on L1.