SDI Community Call - Announcement & Request for Questions

Hi Owls :owl:

On March 30, the Synthetix team, along with @overanalyser, posted IIP-25: Synthetix Debt Pool Mirror Index.

As part of the Product Onboarding Process , we will hold a SDI Community Call w/ Synthetix on Tuesday 4/6 @ 9:00 am PST // 4:00 pm GMT.

The purpose of this call is to give the Synthetix team the opportunity to address questions the Coop has about $SDI in conversation with community members.

Your actions :zap:

  1. DM me your email address to be added to the calendar invite (here or Puniaviision#3752 on Discord)
  2. Add your open questions as a reply :point_down:

I will collect & organize the questions posted here so they can be addressed on Tuesday’s call.

Onwards :rocket:

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Adding a few questions, @puniaviision feel free to sharpen them in any way. The proposal itself is very thorough so not too many Qs are popping up for me.

Product market fit

  • “In order to hedge this market risk, users purchase equivalent assets so that they can enjoy staking rewards with some protection.” → How painful of a process is this for Synthetix users today? Where does solving this fit on their priority list?

Distribution

  • What does “marketing” this look like? The Coop is quite focused on working to grow our products. SDI would be a different class of product compared to DPI/FLI/CGI.

On Intrinsic Productivity

  • Despite reading, “planned for after launch” I can’t help myself: Any sense of a rough timeline on this and what hurdles may need to be overcome?

Hi @gregdocter while I’m a co-author on the IIP, I’m very much a novice when it comes to SNX staking (I use xToken xSNXa…).

So, I’ve had a steep learning curve. Some of it can be found here: Synthetix Debt Pool Mirror Index - OverAnalyser’s crypto fund blog and here Synthetix Debt Pool Mirror Index - OverAnalyser’s crypto fund blog .

I would say that hedging the liabilities is in the top 5 list of things that the Synthetix community would like to address. I would expect the others to include moving to L2 (weekly on-chain activity for every staker), oracle security, and front running protection are likely in there as well.

Distribution looks very different. The aim would be to make SDI available within the SNX staking flow (which I believe is):

  1. stake SNX
  2. issue sUSD to the target capitalisation ratio
  3. swap 90% of the sUSD for $DSI in the Uniswap pool
  4. Use the other 10% sUSD as desired
  5. Check collateralisation and claim SNX weekly.

In many aspects, this fund has a similar structure to BED (~25% ETH, 50% ETH, 25% BTC…). However the aim is different and the target customer is very different. BED is aimed at the non DeFI native who wants broad exposure and who wants something simple to hold. They would most likely need education (from the coop) as to why this is a good choice.

SDI customers are SNX staker, so fully DeFi native. (SNX staking is complex !) They want a product that they don’t want to actively manage, but they are aware that we are helping them solve a challenging problem - the Debt pool is a complex beast. (and we won’t be a perfect hedge).

I’m not expecting INDEXcoop to require many resources to market SDI. The Synthetix community will be educating themselves in the benefits and providing liquidity. Coop resources will be required for the weekly rebalancing and intrinsic productivity.

Intrinsic productivity
As a fund targeted at DeFi natives, it should be possible to include Intrinsic Productivity early in the product. In addition, the large fraction of ETH and DAI gives some straightforward opportunities.

As SDI is intended for SNX stakers use, I’m not expecting to see SDI on any CEX so any potential to be considered security doesn’t become a blocker. (It may still have an impact on SDI’s use as collateral).

In terms of timing, I think the key bottle necks are Dev time (improving after FLI launch) and Product WG time (mainly getting the WG set up, and getting some long term alignment on liquidity mining so we don’t spend a significant part of the week talking about liquidity mining…).

Thanks for putting this up @puniaviision - I am long over due for a Synthetix deep dive so these may be embarrassingly newbish questions.

Liquidity and support

How will this product interact with the current DeFi marketplace. Will this be launched in a similar fashion to our existing indices or will there be Synthetix specific nuances that we need to be aware of?

Rebalancing

How will rebalances be controlled and do you anticipate any friction points with weekly rebalances? Will the final signatures come from IC or Sythnetix?

Once again - I am super super excited about this index and I can’t wait for this community call.