SIP-385: Pause SNX BBB & Distribute v3 fees to v2x stakers

Simple Summary

This SIP pauses the buyback and burn SNX mechanism on Base and replaces it with direct v3 fee distribution on Ethereum and Optimism. These fees will be claimable weekly by v2x stakers with a healthy c-ratio.

Abstract

This proposal pauses the current buyback and burn SNX mechanism on Base introduced by SIP-345 and replaces it with fee distribution. Collected fees will be bridged to Synthetix v2 on Ethereum and Optimism and used to buy back sUSD from the open market. These sUSD tokens will then be distributed to stakers, who can claim them weekly if they maintain a healthy c-ratio. Unclaimed sUSD fees will roll over to the following week.

Motivation

The protocol is shifting focus to v3 products and deprecating legacy long-tail spot synths, causing sUSD to experience an ongoing depeg from USD. Currently, v2 stakers have little immediate incentive to pay off their debt, aside from the threat of liquidation. A depegged sUSD poses potential capital losses for those holding sUSD, including perps v2 traders and other users of sUSD in the DeFi landscape (e.g., Thales, Aave, LPs).

Rationale

By periodically purchasing sUSD on the open market using v3 fees, this proposal aims to support the sUSD peg directly. Additionally, by making the fees claimable only by stakers with a healthy c-ratio, it incentivizes stakers to buy discounted sUSD on the open market to pay off their debt.

Technical Specification

The Treasury Council will execute any necessary on-chain actions required by this proposal on a weekly basis.

Test Cases

N/A

Configurable Values (Via SCCP)

N/A

Copyright

Copyright and related rights waived via CC0.