SIP-405: Temporarily Distribute fees to V2 stakers

Author	snxmaximalists.eth
Status	Approved
Type	Governance
Network	Ethereum, Optimism, Base & Arbitrum
Implementor	TBD
Release	TBD
Proposal	Loading status...

Simple Summary

After SIP 385, fees will no longer be used to buy back and burn SNX; instead, they will be sent to the treasury for later use. This proposal suggests redirecting the fees allocated to the Synthetix Treasury to burning sUSD.

Abstract

Building on the existing fee-sharing mechanism, this proposal redirects the fees sent to the Synthetix Treasury to be bridged, converted to sUSD, and burned. This approach ensures that the sUSD is effectively removed from circulation, benefiting SNX stakers through debt reduction.

Motivation

Yields for SNX stakers are currently very low. By using the fees collected on Base and Arbitrum to burn sUSD debt, we have an easy and quick way to temporarily boost yields. This approach is much more beneficial to stakers than leaving the fees in the treasury. Burning the sUSD provides SNX stakers with an immediate pro-rata debt reduction to their sUSD debt.

While this may not be the most elegant solution, it should provide short-term benefits for stakers until a more permanent solution is implemented after the migration.

Specification

The fees allocated to the Synthetix Treasury from Perps v3 deployments across various chains will be bridged, swapped into sUSD, and burned, depending on the needs of each specific deployment.

This process will occur at a fixed, TC-proposed time once a week, ensuring all participants know what to expect.

Rationale

Burning the sUSD benefits for SNX stakers, making staking more attractive by providing an immediate debt reduction. Letting them benefit from the new v3 deployments