[SIP - 27] SYN Emissions Reduction

Overview:

In a Snapshot in late march, the Synapse DAO voted to advance the protocol’s liquidity model by working with Nima Capital, an experienced crypto market maker, to be the first liquidity partner to participate in actively managed concentrated liquidity pools. Over the past few months, the firm has successfully reduced quotes on many crucial stableswap bridge routes [Tweet].

By active liquidity providers quoting tight prices, the DAO no longer needs to incentivize passive liquidity pools and can create a long term sustainable model for the protocol.

Nearly two months after evaluating the success of the manual management, a more formalized path to turning off emissions on stableswap pools has been proposed.

In the short term, Synapse should reduce all stableswap emissions by 50%, reduce Metis and Fantom emissions to zero , and decrease emissions on high volume pools proportionately less (Arbitrum/BNB Chain).

*The Metis Foundation has agreed to incentivize the Metis Pools with $15k worth of METIS for three months. *

Proposed Changes:

Arbitrum : 19958 -> 19958 Avalnache : 20160 -> 4000 BNB Chain: 17338 -> 12000 Canto: 7999 -> 5000 Fantom: 15120 -> 0 Metis: 11340 -> 0 Optimism: 7056 -> 7056 Polygon: 15120 -> 7560

Current Weekly Total: 114,141 SYN Proposed Weekly Total: 55,574 SYN

Final thoughts:

Given the clear benefits to reducing SYN emissions, this is the first step to pursuing a more capital efficient protocol. Following this there should be

• Better infrastructure for active liquidity providers to automate concentrated liquidity
• Ensuing proposals that further reduce emissions

For more context:

1. Active liquidity management partnership: https://forum.synapseprotocol.com/d/269-advancing-synapses-liquidity-model-reducing-syn-emissions
2. Protocol Emissions Reduction Discussion: https://forum.synapseprotocol.com/d/422-reducing-protocol-emissions
3. Re calibrating SYN emissions: https://forum.synapseprotocol.com/d/242-recalibrating-syn-emissions