STP-8: SNX incentives for integrators

Simple Summary

Allocate up to 10m SNX from the Treasury to reward outstanding Synthetix integrators with escrowed SNX grants, increasing the role of long term partners in the protocol.

Abstract

This proposal introduces a structured incentive mechanism for Synthetix integrators through escrowed SNX grants. A total of up to 10 million SNX from the treasury will be earmarked for this program. This approach is designed to reward high-performing integrators, promoting long-term collaboration and enhancing the protocol's growth, without expanding the SNX circulating supply.

Motivation

Robust and lasting integrations are key to the success of the Synthetix ecosystem. Building integrations is a commitment, and the absence of a well-defined incentive structure could impede the number and quality of integrators. Establishing a structured incentive mechanism is essential to cultivating the right calibre of lasting integrator partnerships.

Specification

Overview

Award escrowed SNX grants to high-performing partners based on sustained volume targets. The targets should be designed to bring significant value to the platform, and

Rationale

Establishing a direct financial incentive for integrators aligns their success with the broader Synthetix ecosystem. Sharing governance privileges and fee revenue ensures that significant fee contributors are duly rewarded, fostering a mutually beneficial relationship and protocol growth.

The TC debt is currently approximately $20.7m. At $2 SNX price, debt would need to be reduced by approximately $5m in order to release 1m staked SNX for first trache. Given the first tranche would reduce debt by approximately $3m, and additional $2m would be required.

Financial Specification

Beginning July 2024, partners achieving specified average daily volumes will be granted the following escrowed SNX grants:

Average Daily Volume	Minimum Time in Days	Escrowed SNX Grant	Cumulative Fees to TC*	Effective SNX Cost at Grant**
$250 million	90	1 million SNX	$2,812,500	$2.80
$500 million	180	2 million SNX	$11,250,000	$4.23
$750 million	270	2 million SNX	$25,312,500	$5.63

*Cumulative fees to TC are based on the assumption that $100 million daily volume results in $1.25 million total fees per month, with the TC earning 30% of the fees. **SNX price at grant is an estimate using cumulative fees earned by the Treasury Council

Each grant milestone is cumulative but can only be achieved once. The grants will be escrowed for 24 months, with a 12-month cliff, followed by a 12-month linear monthly unlock.

Copyright

Copyright and related rights waived via CC0.