{"componentChunkName":"component---src-pages-sccp-sccp-markdown-remark-frontmatter-sccp-tsx","path":"/sccp/sccp-2011/","result":{"data":{"markdownRemark":{"fileAbsolutePath":"/vercel/path0/content/sccp/sccp-2011.md","frontmatter":{"sip":null,"sccp":2011,"title":"Update DAI Wrapper Parameters","network":"Ethereum & Optimism","author":"Kaleb (@kaleb-keny)","type":"Governance","proposal":"https://snapshot.org/#/snxgov.eth/proposal/0x319018e267c37323da5e00b126b37dd8b09818d636d4839854bdcf11a7599fa8","implementor":null,"release":null,"created":"2023-05-26T00:00:00.000Z","updated":null,"status":"Implemented"},"html":"<h1 id=\"simple-summary\" style=\"position:relative;\"><a href=\"#simple-summary\" aria-label=\"simple summary permalink\" class=\"anchor before\"><svg aria-hidden=\"true\" focusable=\"false\" height=\"16\" version=\"1.1\" viewBox=\"0 0 16 16\" width=\"16\"><path fill-rule=\"evenodd\" d=\"M4 9h1v1H4c-1.5 0-3-1.69-3-3.5S2.55 3 4 3h4c1.45 0 3 1.69 3 3.5 0 1.41-.91 2.72-2 3.25V8.59c.58-.45 1-1.27 1-2.09C10 5.22 8.98 4 8 4H4c-.98 0-2 1.22-2 2.5S3 9 4 9zm9-3h-1v1h1c1 0 2 1.22 2 2.5S13.98 12 13 12H9c-.98 0-2-1.22-2-2.5 0-.83.42-1.64 1-2.09V6.25c-1.09.53-2 1.84-2 3.25C6 11.31 7.55 13 9 13h4c1.45 0 3-1.69 3-3.5S14.5 6 13 6z\"></path></svg></a>Simple Summary</h1>\n<p>This SCCP proposes to apply the below configuration changes on the DAI wrapper:</p>\n<ul>\n<li>Lower the <code>maxTokenAmount</code>on the ethereum network from 20m DAI to 0</li>\n<li>Lower the <code>burnFeeRate</code> on the ethereum network from 50 bp to 0</li>\n<li>Lower the <code>minFeeRate</code> on the optimism network from 25 bp to 0</li>\n</ul>\n<h1 id=\"abstract\" style=\"position:relative;\"><a href=\"#abstract\" aria-label=\"abstract permalink\" class=\"anchor before\"><svg aria-hidden=\"true\" focusable=\"false\" height=\"16\" version=\"1.1\" viewBox=\"0 0 16 16\" width=\"16\"><path fill-rule=\"evenodd\" d=\"M4 9h1v1H4c-1.5 0-3-1.69-3-3.5S2.55 3 4 3h4c1.45 0 3 1.69 3 3.5 0 1.41-.91 2.72-2 3.25V8.59c.58-.45 1-1.27 1-2.09C10 5.22 8.98 4 8 4H4c-.98 0-2 1.22-2 2.5S3 9 4 9zm9-3h-1v1h1c1 0 2 1.22 2 2.5S13.98 12 13 12H9c-.98 0-2-1.22-2-2.5 0-.83.42-1.64 1-2.09V6.25c-1.09.53-2 1.84-2 3.25C6 11.31 7.55 13 9 13h4c1.45 0 3-1.69 3-3.5S14.5 6 13 6z\"></path></svg></a>Abstract</h1>\n<ul>\n<li>The <code>maxTokenAmount</code> is the maximum amount of underlying that can be locked in order to issue a synth equivalent.</li>\n<li>The <code>mintFeeRate</code> is the fee rate applied when minting a synth by locking up an underlying.</li>\n<li>The <code>burnFeeRate</code> is the fee rate applied when burning a synth in order to unlock the underlying.</li>\n</ul>\n<h1 id=\"motivation\" style=\"position:relative;\"><a href=\"#motivation\" aria-label=\"motivation permalink\" class=\"anchor before\"><svg aria-hidden=\"true\" focusable=\"false\" height=\"16\" version=\"1.1\" viewBox=\"0 0 16 16\" width=\"16\"><path fill-rule=\"evenodd\" d=\"M4 9h1v1H4c-1.5 0-3-1.69-3-3.5S2.55 3 4 3h4c1.45 0 3 1.69 3 3.5 0 1.41-.91 2.72-2 3.25V8.59c.58-.45 1-1.27 1-2.09C10 5.22 8.98 4 8 4H4c-.98 0-2 1.22-2 2.5S3 9 4 9zm9-3h-1v1h1c1 0 2 1.22 2 2.5S13.98 12 13 12H9c-.98 0-2-1.22-2-2.5 0-.83.42-1.64 1-2.09V6.25c-1.09.53-2 1.84-2 3.25C6 11.31 7.55 13 9 13h4c1.45 0 3-1.69 3-3.5S14.5 6 13 6z\"></path></svg></a>Motivation</h1>\n<p>The primary motivation is to incentivize arbitrage of the imbalance between the ethereum and optimism wrappers. Over the last couple of months the optimism DAI wrapper went from having around 20m$ of DAI locked, to less than 1m$ locked at the time of writing this SCCP. With most of the sUSD activity taking place on optimism, it is important to encourage market forces to abitrage the two wrappers in order to reduce the price impact of users buying into and exiting the Synthetix ecosystem. Adjusting the parameters as laid out in this SCCP eases the friction cost and facilitate the arbitrage.</p>\n<table>\n<thead>\n<tr>\n<th><strong>Network</strong></th>\n<th>Ethereum</th>\n<th>Optimism</th>\n</tr>\n</thead>\n<tbody>\n<tr>\n<td><strong>Peg</strong></td>\n<td>1.0005</td>\n<td>0.9995</td>\n</tr>\n<tr>\n<td><strong>DAI Locked</strong></td>\n<td>20m</td>\n<td>0.9m</td>\n</tr>\n<tr>\n<td><strong>Eth Locked</strong></td>\n<td>20k</td>\n<td>2.8k</td>\n</tr>\n</tbody>\n</table>\n<p>The arbitrage that can be done by market foces takes the following form:</p>\n<ol>\n<li>Start with DAI on optimism / <a href=\"https://app.optimism.io/\">Bridge</a> DAI to optimism from ethereum</li>\n<li>Mint sUSD with DAI with <a href=\"https://wrappers.synthetix.io/\">the wrapper</a> - 0% mintFeeRate - (or <a href=\"https://app.1inch.io/\">swap</a> if sUSD is selling at discount)</li>\n<li>Bridge the sUSD to ethereum with the relayer - <a href=\"https://blog.synthetix.io/susd-bridge-enabled/\">blog post</a></li>\n<li><a href=\"https://wrappers.synthetix.io/\">Burn</a> the sUSD to release DAI - 0% BurnFeeRate - (or <a href=\"https://app.1inch.io/\">swap</a> if sUSD is selling at premium)</li>\n<li>Back to step 1)</li>\n</ol>\n<h1 id=\"copyright\" style=\"position:relative;\"><a href=\"#copyright\" aria-label=\"copyright permalink\" class=\"anchor before\"><svg aria-hidden=\"true\" focusable=\"false\" height=\"16\" version=\"1.1\" viewBox=\"0 0 16 16\" width=\"16\"><path fill-rule=\"evenodd\" d=\"M4 9h1v1H4c-1.5 0-3-1.69-3-3.5S2.55 3 4 3h4c1.45 0 3 1.69 3 3.5 0 1.41-.91 2.72-2 3.25V8.59c.58-.45 1-1.27 1-2.09C10 5.22 8.98 4 8 4H4c-.98 0-2 1.22-2 2.5S3 9 4 9zm9-3h-1v1h1c1 0 2 1.22 2 2.5S13.98 12 13 12H9c-.98 0-2-1.22-2-2.5 0-.83.42-1.64 1-2.09V6.25c-1.09.53-2 1.84-2 3.25C6 11.31 7.55 13 9 13h4c1.45 0 3-1.69 3-3.5S14.5 6 13 6z\"></path></svg></a>Copyright</h1>\n<p>Copyright and related rights waived via <a href=\"https://creativecommons.org/publicdomain/zero/1.0/\">CC0</a>.</p>"}},"pageContext":{"id":"cd7f62cb-6cd8-53a4-896c-5de478b3c4c5","frontmatter__sccp":2011,"__params":{"frontmatter__sccp":"2011"}}},"staticQueryHashes":[]}