Double the exchange fee rate on any swing trade. That is any move to or from an s Synth to an i Synth. e.g. sTRX <> iBTC or iETH <> sBNB. The one Synth excluded from this is sUSD - moving in or out of sUSD will not double the fee.
Doubling the exchange fee rate would reduce the amount of opportunities for a front runner swing trading between the long and inverse synth of a feed, i,e sBTC and iBTC without moving into sUSD first. This mechanism was previously implemented in SIP-21. This SIP targets swing trading and reduces the need to increase fees on the synths via SCCP's which affect other traders / users of the platform.
There is already a leveraged benefit on the inverse Synths and currently being able to trade short <> long in a volatile market is a continuous advantage to front runners.
\nIt has been observed that there are possibilities to frontrun real world prices and the on-chain oracle prices between the long s synth and the inverse synth, without moving in between sUSD which would incur a 30bips fee to sell the short or long position first before opening a swing trade.
Exchanging in or out of sUSD will not double the fee.
Synthetix.exchange() detect a swing trade, that is any exchange to or from any synth beginning with s or i.ExchangeRates.exchangeFeeRate()For example, if the exchange fee rate is 30 bips, it would make the swing trade 60 bips both direction.
\nhttps://github.com/Synthetixio/synthetix/blob/v2.34.0/test/contracts/Exchanger.spec.js#L2239
\nWhile implementing this SIP, sBTC and iBTC, sETH and iETH trading fees were also reduced back to 30bps, as they had been increased as per SCCP-65 and SCCP-62 to combat frontrunning that was observed utilising swing trades between short and long synths.
\nCopyright and related rights waived via CC0.
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