Simple Summary

This SCCP proposes to lower the exchange fee on sETH/sUSD on L1 and and L2 temporarily to zero, in coordination with the Treasury Council, in order to facilitate full unwind of the sETH wrapper on the ethereum network:

• swap enough sUSD to sETH to unwind the sETH wrapper on L1
• unwrap the sETH on L1 by burning the sETH
• send the wETH to L2
• wrap the wETH to mint sETH
• swap the sETH back to sUSD
• send sUSD back to L1 (with 7 day delay)

Abstract

The fee levers that need to be updated are as follows:

• on ethereum, setAtomicExchangeFeeRate would be used on sETH to update the fee to zero
• on optimism setExchangeFeeRate would be used on sETH to update the fee to zero
• on optimism setExchangeDynamicFeeRounds would be used on sETH to lower the number of rounds to 1 (effectively disabling dynamic fees)

Motivation

The proposed changes in this SCCP is part of a suite of pre-requisite changes done, in order to facilitate migration of spot synths on L1 as specified in SIP-2059 and unwinding of the debt pool skew.

Important to note that all parameters are restored back to previous levels following the full unwind of the sETH wrapper on L1.

Status switched to rejected as per authors' request.

Copyright

Copyright and related rights waived via CC0.