Overview:
Last spring (2023), Paxos and Binance both announced plans to deprecate BUSD over the ensuing year. Paxos would no longer issue BUSD and then both Paxos and Binance would sunset all redemptions and convert existing BUSD sitting on exchanges to alternatives.
https://paxos.com/2023/02/13/paxos-will-halt-minting-new-busd-tokens/
The Synapse DAO passed a proposal last year to setup the groundwork for a migration to pools that don't support BUSD [https://snapshot.org/#/synapseprotocol.eth/proposal/0x7f25df5f1a630ccb09bb872c26cbf4dd74300cf21212de7d8ea05aa278872670]
As the one year mark approaches, moving towards the new pool (which can be found here [https://old.synapseprotocol.com/pools/bscnusd] ) needs to be actioned in a material way. The easiest way to do this is to shift all emissions (52k SYN/ month) on BNB Chain to the new pool.
Similarly to prevent any further complications, the Synapse DAO should sell all BUSD exposure. The Synapse DAO Treasury currently holds ~$150k worth of Binance Pegged USD (BUSD)
Prospect:
It is key that migration to a new pool happens promptly due to BUSDs quickly decreasing usage and vague communication from Paxos around the future of on-chain BUSD. In the last year, BUSD supply is down from 20B to 3B outstanding. BUSD on Ethereum is down an additional 30% in the last week. [https://defillama.com/stablecoins] DefiLlama shows the changing mix of stablecoin supply.
Another important consideration is what impact to Synapse volume deprecating BUSD support will have. Moving from a pool that supports 4 assets, to a pool that supports 4 is meaningful in that it improves AMM pricing since liquidity is only split between 3 assets in the pool. Less liquidity will provide the same pricing for bridging to and from bsc.
Actions:
Decrease emissions on the “legacy” BSC Stableswap pool to 0.
Increase the emissions on the “new” BSC Stableswap pool to 45k SYN/month
Share posts on twitter around pool migration to ensure LPs can move their assets quickly
Liquidate all Synapse DAO Treasury BUSD and BSC-USD holdings
Total holdings right now total to 90k BUSD and 65k BSC-USD. [https://synapse-treasury-frontend.vercel.app/]
Given deep liquidity on BNB chain venues like Pancake Swap, the assets should be swapped for USDC. Prices as of now show positive slippage for such a swap but slippage parameters should be capped at 1%
Swaps can be done in one go and not significantly affect the resulting price. The snapshot vote should include a date to execute this by.
Other venues can be considered but the parameters above should be more than sufficient
Notes:
There are three versions of BNB related stables of worth
BUSD - issued by Paxos and backed 1:1 with real dollars (only on Ethereum)
USDC - Ethereum USDC bridged through the binance native bridge
BSC-USD (Binance pegged) - BUSD bridged through the binance native bridge
Since BSC-USD is a form of BUSD, any mention of BUSD in this post can be assumed to be a mix of both BUSD and BSC-USD.
I have not been able to find much online about when redemptions actually end so any further discussion/information is welcomed.
