Synthetix 2024

Firstly, a big shout-out to Fifa and Cav, who helped review and critique my thoughts on this post.

It is still unclear which Synthetix entity is responsible for the roadmap (it isn’t, but no one actually adheres to this aspect of governance). Because of this, you are likely to read a range of roadmap proposals from various authors. Decentralised roadmaps ftw! Surely, some ICO must have pitched this idea back in 2017?

Most of what I wrote in A Fork in the Road back in October 2023 is still relevant, which is pretty impressive, so this updated roadmap should be one of the easiest I’ve written in years.

The current state

The momentum behind Base continues to grow, which bodes well for Synthetix Andromeda. If Andromeda is a success, it will create momentum for a rollout across many more networks. Quick aside, last week, for the first time ever, I recommended a portfolio project deploy to Arbitrum first. There is significantly more DeFi activity on Arbitrum right now, and they are a relatively unknown project. I told them they need to lean into the network with the most DeFi early adopters (read, Degens). With that said, I remain incredibly bullish on the Superchain. I fully believe the Optimism ecosystem is going to reel in Arbitrum, but for now, we need to face the reality that Arbitrum is winning DeFi. The launch of Andromeda, as well as many other projects launching on Base, has the potential to enable Optimism to dominate the Ethereum scaling wars. This is saying nothing of the core Superchain roadmap, which I hope will reduce L2 fragmentation and reenable DeFi composability.

Back to the immediate term, there are two primary questions which must be resolved from the Base deployment.

  1. Are LPs willing to collateralise Synthetix with non-SNX collateral

  2. Are traders willing to trade on Synthetix without relying on sUSD (house money)

If the answer to both questions is yes, we can continue the rollout across other networks. Thankfully, the success of Base so far has removed one of the potential confounding variables in this experiment. If Base had failed to gain traction, we would not have been able to draw strong conclusions from the Andromeda release. Thankfully this should no longer be a concern. Over the last few weeks, the Spartan Council has begun ramping up OI and LP capacity on Base; as Andromeda stabilises, we expect this scaling process to accelerate.

Andromeda X

There were a few things that were descoped from Andromeda, which will be deployed into a satellite release of Andromeda over the next few months. Yes, galaxies have satellite galaxies; what a universe!

There are only a few small additions, multi-collateral support and changes to the funding rate mechanism, but this should be a fairly seamless upgrade.

There is a minor dependency on the release of Andromeda X to really scale OI, but hopefully this should not take more than a few weeks.

The return of the king

Several years ago, Synthetix abandoned L1 to focus product development on the Optimism L2 scaling network. There were many reasons for this, but one of the most critical was the inability to reduce Oracle latency. This new deployment, which I have dubbed Carina, reduces the need for low-latency Oracles by filtering out toxic flow. It is extremely satisfying to me to see Synthetix preparing to deploy a new ETH perp market on mainnet. This market is purely designed to cater to delta-neutral stablecoins like Ethena’s USDe. Deploying on L1 also allows us to leverage over $500m of SNX collateral to bootstrap this new release. I’m extremely bullish on the scalability of these new stablecoin designs, so I believe prioritising this deployment makes sense, as scalable decentralised* stablecoins will be one of the most powerful narratives over the next few years. Combined with the far lower LP risk profile, this may be one of the most important Synthetix product releases ever.

*Quick aside for those of you reading this in 2026, I’m sorry recursive leverage on ETH staking derivatives blew us up this cycle, but I regret nothing. You even sent Millie X back from the future to warn us, but weirdly we all ignored him *🤣

A chain of our own

If these two deployments are successful, the next step is the windup of the legacy Synthetix system. This means finding a place to retire over $100m worth of SNX debt in the form of sUSD. Yes, it is time to send SNX collateral to a nice farm where it can run around in the sun and play with all the other deprecated endogenous collaterals.

This chain should be part of the Superchain for some of the reasons already stated above; the technical roadmap of Optimism is incredible and will allow Synthetix to begin to create the cross-chain network we envisioned years ago.

“But BUt BuT! What is the point of this chain?” I hear you screaming into the void.

There are three components to SnaxChain: the first is enabling the migration of debt out of the legacy system, the second is unifying governance to a single chain, and the final one is a place to point the money pipe of fees flowing from all these other networks. While the first two may feel like minor value propositions, greater governance participation is critical to the decentralisation of the protocol and an Appchain will allow for a better model for this. Solving the migration of debt out of the legacy system is also a critical part of the narrative of this new era of Synthetix. Like inflation, in order to get the average degen to pay attention to this narrative, it must be definitive. We must deprecate SNX collateral completely. Should this prove viable, it will be a huge narrative win against the endogenous collateral reply guy army.

The final component is a place to send fees. Fees can either be distributed to stakers or used to buy back and burn SNX, or some combination thereof. IMO, this is the most compelling reason to deploy an Appchain, a single location for SNX staking will ensure there are no fee wars between chains.

One minor additional benefit of an Appchain is that a single place to borrow sUSD against SNX will allow for the potential to leverage this new stablecoin to be used as collateral across many other chains. While this may be controversial, it will open up a path to bootstrapping new networks as there will be a supply of stablecoin collateral that is highly motivated to bridge to and grow new Synthetix deployments.

Comparing Apples and Blueberries

The deployment of SNAXchain will likely take 3-6 months if other Appchains are anything to go by. Therefore, in parallel, I believe we should finally journey over to the land of the blueberries and see how a head-to-head comparison between GMX and Synthetix goes for them. However, a simple ETH or USDC-backed system is not going to cut it for the degens of Arbitrum; no, I am now a firm believer in the Fifa proposal of deploying Degenthetix. This release will continue the naming convention of nearby galaxies. Thus, Synthetix Draco (Degenthetix) will bring us to the promised land. We can use many potential tokens as collateral for this deployment, but some of the most fun will probably be ARB, GMX and SHIB. Alongside more reasonable collateral like USDC and ETH.

That’s it.

I’m sorry if you had settled in and planned to spend the weekend reading this post, but unlike past years there is just not a lot of complexity to the ‘24 roadmap. This will be a year of execution. We have the systems built, we know what is required, it is now simply a process of deploying and scaling Synthetix on each network.

Lol, jk.

Ok, cool, so the product shit is pretty boring; what of governance?

We have an agency problem in the protocol, the contributors are not effectively coordinating with the Council. I believe we need to implement some major changes to ensure that the Council has far greater control and oversight of the priorities of the CCs. This also requires a new mechanism to ensure communication between the CCs and the Council is effective. I have spent the last six months cooking stuff up at Infinex, and I can say definitively that Infinex governance has improved on a number of aspects of DAO governance. The proposal I now support is aligning all the CCs under a single Core Contributor Lead who will be the point of contact for the Spartan Council and will be appointed by the Council rather than having the CCs decide who should be coordinating them in a popularity contest.

It is finally time to implement the Risk Council and deprecate the pDAO. The pDAO harkens back to ancient times when an air-gapped EOA controlled the Havven protocol. These were dark times indeed, and we must move into the future with an elected body responsible for deploying code and overseeing protocol risk. This is a critical component of hardening the censorship resistance of the protocol. There have been numerous proposals over the years to make this transition, but I hope the Spartan Council can appoint someone from within to drive this initiative forward this epoch.

We need to further harden Synthetix governance. V3GM has been languishing for over a year now; it is time to invest in removing off-chain signalling and discretion. Token holders have lacked oversight for too long, and we must commit to fixing this while there is still some time left in the latter stages of the bear market. Part of this is aligned with the deployment of Snaxchain, as we will be able to leverage Wormhole CCQ to allow SNX stakers to govern any chain from a single native Synthetix network.

The current Spartan Council is clearly down for experimentation and shaking up the status quo. Let’s leverage that to make some progress on some of the more crazy initiatives, and start cooking up some new experiments. We have the technical resources to implement these changes, but we must commit to designing, developing and deploying them.

Oh yeah, Infinex

I have previously avoided cross-posting about Infinex in my Synthetix posts. But it is now unavoidable. Synthetix will be one of the core integrations for Infinex. If Infinex is even mildly successful at attracting CeFi users to DeFi, the addressable market for Synthetix is going to expand by several orders of magnitude. The vast majority of my focus is currently on Infinex, but I am still on the Spartan Council. I am very comfortable with the path forward for Synthetix. It is the least speculative and uncertain roadmap we have had in years. The problems are solved; the only thing standing in the way of 2192 is execution. Oh, and I also heard a rumour the Infinexians are cooking up a plan for hybrid off-chain limit orders. That should be fun to watch.

Conclusion

Part of the game with crypto is about memory-holing the past, ignoring the present and perpetually looking to the future. For once I think it is worth focusing on the present. The present this community has manifested through blood, sweat, and tears during the bear market is incredible. It has never been safer or easier to stake SNX, and as we scale up open interest on Andromeda, I expect SNX staking to be more profitable than ever. Soonthetix is dead, Nowthetix is the new king.

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