[Request for Comment] fast bridging support for SNX and sUSD

Summary:

This is a proposal for HOP protocol to offer fast bridging support for SNX and sUSD to/from Optimism and L1.

The Synthetix Treasury Council has committed to seeding liquidity for bonders and offering $OP incentives to SNX/hSNX and sUSD/hsUSD LPs on Optimism to facilitate the process.

One non-binding piece of the proposal would be if Hop Protocol were to consider matching Synthetix with $HOP co-incentives. This would give Synthetix more runway for future collaboration and would also be a strong signal of alignment to the respective communities.

Rationale:

Currently Synthetix is the largest [non-lending] protocol by TVL on Optimism and has been one of the most used Dapps on Optimism since the rollup first launched. Being so early to a new rollup does have some consequences though, like the fact that the infrastructure just wasn’t there for many of the things Synthetix was building. One such case was that synths were now being minted on two separate chains and thus were not fungible with each other.
However, after SIPs 165 and 229, full synth fungibility between L1 and L2 has been achieved, so users can transfer sUSD between L1 and L2 as they are accustomed to with the standard optimism bridge.

Although the infrastructure is now in place for synth and SNX bridging, there is still a challenge from a user experience perspective when it comes to the optimistic challenge window and delay when withdrawing funds from Optimism through the standard bridge. This obstacle can become problematic if it impedes arbitrage between L1<> l2 and causes unhealthy market dynamics. Therefore the Synthetix Treasury Council is committed to offer the necessary resources and incentives to integrate with Hop and enable fast bringing.

Fast bridging support for SNX and sUSD on Hop would be a major UX improvement for Synthetix but it would also result in a ton of volume + usage for Hop Protocol. Unlike tokens such as ETH, USDC, DAI or others, there is no other bridge which supports sUSD and SNX. While a user may have 10 different options for bridging ETH to/from Optimism, the only way to fast bridge sUSD and SNX would be through HOP, meaning Hop protocol will capture all of the Synthetix volume that needs to be bridged to/from Optimism for arbitrage or otherwise.

Considering the above, if this proposal passes, I think it would make sense for Hop protocol to co-incentivize hToken liquidity with Synthetix on Optimism, and though it’s not a binding condition, it’d likely be to the overall benefit of both protocols if this were a joint incentive program.

Specification:

  • Seed bonders on L1 with SNX and sUSD from the Synthetix Treasury

  • Incentivize liquidity for hSNX/SNX and hsUSD/sUSD with $OP

  • Potential co-incentives

  • Roll out bridging support for SNX and sUSD on Hop

Notes:

*Unlike other tokens which Hop protocol supports on several chains, SNX and sUSD are only utilized on L1 and Optimism so naturally this proposal does not cover support for bridging to any other chain but Optimism.

*The amount of $OP that will be used for incentives is to be tested and increased incrementally to achieve optimal results in light of bonder liquidity utilization.

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