Synapse AMA Notes

May 20, 2023

They are Releasing version 2 of the SDK & a new router contract, which will be used to integrate more chains and more tokens into Synapse
- SynapseRouter.sol allows bridging of any token to any chain through one function call
- The SDK will be built around it, so that developers can integrate the bridge in one function
- Aggregators are working on integrating the new SynapseRouter.sol contract, which would increase volume to Synapse.
  - Relay has integrated, Socket (Bungee) & LiFi are currently a work in progress.
- A Rest API is also built around the new Router contract, to make it easier for liquidity providers to analyze volume and liquidity.
  - This will also set the stage for concentrated liquidity in the future using Python & other languages.
Core focus has been on the Interchain Network, which consists of: Cross-chain messaging & Synapse Chain.
- Code base for Cross-chain messaging will be open-sourced in the next few weeks (they’ve used private repos so far while getting things off the ground). Audits, bug bounties and incentivized testnet launch will follow.
- Synapse Chain is on a similar timeline.
Launching the explorer.
Working on concentrated liquidity, to be able to give 1:1 cross-chain quotes across all chains.
Cross-Chain Transfer Protocol (CCTP) integration, which will reduce the need for liquidity and reduce SYN incentives.

DeFi Kingdoms was one of the first movers in gaming and had real users. Additionally, they already participated in multiple chains and expanded their community through it.
- They are an important cornerstone of Synapse, and the DeFi Kingdoms integration is one of the largest integrations in all of crypto.
- The protocol as a result of the integration has been used across one million users and has had over 1.6 million transactions.
Regarding other use-cases for messaging:
- Bridging all types of assets, and not only liquidity-based transfers
- Layer two app rollups (similar to Aevo), which can integrate messaging to allow for faster withdrawals
- Avalanche Subnets and Polygon Supernets can use to expand their assets (including tokens, NFTs and data)
- Governance proposals can be executed trustlessly across chains
- Cross-chain lending, custody and prime brokerages

Nima has been providing $40m in liquidity over the past month since the proposal was executed.
Since then, they have also been rebalancing liquidity, and have built analysis tools around the REST API that Synapse built to track slippage between chains.
The focus for the future is towards concentrated liquidity. Nima and other liquidity providers will provide quotes around 1:1 to create an request for quote (RFQ) type of system.
- This would lead to Synapse not relying on stableswap based slippage, and using other liquidity models which would allow to emulate order books. The end goal is no slippage bridging.

Aurelius is personally very excited for the launch of Base.
The DAO could evaluate if Synapse should support Base
- Aurelius expects that most large protocols will deploy on Base, as it was hinted by Coinbase a few months ago

There is some confusion around current SYN emissions
Nima’s proposal is a two-part proposal, with the first one relating to fixed term liquidity. After this, and once concentrated liquidity contracts are finished, Nima (and other liquidity providers) will begin quoting 1:1 swaps.
- The proposal did not suggest that SYN emissions would be stopped.
- However, with concentrated liquidity live, it will be possible to reduce emissions by 50-80%, Since liquidity provided by locked liquidity (from Nima) and concentrated liquidity should allow for deeper bridge quotes.
- There have been recent proposals on the governance forum that advocate to reduce emissions.
  - However, both the decision and the specifics are up to the DAO.

The name was changed to formalize the teams contributions under a name, no changes are made to the protocol or DAO.

After the Harmony bridge hack and the collapse of Terra, Frax stopped pursuing a multi-chain strategy for their stablecoin.
- Frax and Synapse still have a good relationship.

Token utility depends on the DAO.
The interchain network is built to have the capability of being Proof of Stake.
- The interchain network would be more secure through economic security around off-chain validators and fraud reporters.

The interchain network is fully compatible with all blockchains, however initial focus has been EVM implementation.
- This initial focus is based on Synapse dominating EVM volumes and additionally since there are obvious value overlaps with Synapse Chain being an Ethereum rollup and the messaging system being Optimistic.
The DAO should evaluate future initiatives for non-EVM chains depending on usage and difficulty.

Max is still part of the community, but decided to focus on other things.
- Nothing to do with past few months or what will be coming in next few months.

Tighter spreads on the chains that are used the most
Increased usage
Increased focus on quoting on more of the long-tail chains to create more competitive quotes against other bridges
When concentrated liquidity contracts are ready, results will become clearer

ASXN