SIP-345: Buyback and burn SNX on Base

Author	Cavalier
Status	Implemented
Type	Governance
Network	Base
Implementor	TBD
Release	TBD
Proposal	Loading status...

Simple Summary

Use 50% of fees earned on Base to buyback and burn SNX.

Abstract

After any share to integrators, use 50% of net fees to buy SNX on market to burn. The other 50% of net fees will be earned by the LPs, which is currently expected to be USDC.

Motivation

Fees from the isolated Base deployment need to be aportioned to the LPs and wider Synthetix protocol participants.

Specification

Overview

Configure the Perps Market to send 50% of net fees to an SNX Buyback contract.

Rationale

Buyback and burn SNX is the most elegant use of fees earned on Base, and tests the model of how isolated V3 deployments on other chains could operate.

Burning fees was considered as one solution, and could be worth pursuing if the Base deployment gains traction, but requires significantly more development. In an ideal world, fees for SNX LPs on other chains would be distributed to each staker in the same form that fees are earned in. However, due to the limitations of cross-chain communication at this time, and the complexity of managing these operations across multiple networks, the proposal will instead use the fees to buy SNX back from the market, and subsequently burn the purchased SNX.

Technical Specification

Deploy a buyback contract based on Yearns, and configure buying of SNX using USDC, owned by the Deployer, with the TC able to withdraw SNX. Set the price of the SNX buy at oracle + premium%
Configure a Fee collector for Perps Market on Base to collect SNXFeeShare = 50% of net fees (after integrator share)
Fee Collector accrues sUSD fees
Any keeper can call the Fee Collector, swap sUSD into sUSDC, unwrap into USDC and send to buyback contract to top it up
Anyone can send SNX to the contract to sell it at oracle + premium for USDC
TC to withdraw SNX at least monthly, and burn by sending to 0x000000000000000000000000000000000000dead

The remaining 1-SNXFeeShareis earned by LPs in the Spartan Council Pool. For example if $10 of fees were earned on Base, and integrator share is 10%, then $4.50 will go to Spartan Council Pool LPs, and $4.50 used to buyback SNX.