Motivations:
At the dawn of SynapseRFQ, SynapseX, and SynapseCCTP all launching and gaining market share, we should re-evaluate Synapse DAO emissions to be more capital efficient, and encourage the use of bridge modules that offer cheaper quotes without SYN spend.
Current SYN spend is as follows:
Arbitrum - 142,560
BSC - 51,429
Polygon - 32,400
Optimism - 51,840
Canto - 21,429
Avalanche - 17,143
Base - 57,024
Metis - 15,000
Total: 388, 825
https://synapseemissionsdashboard-3d76b3202ae7.herokuapp.com/
Methods:
All of the compiled data can be found here [https://us.holistics.io/dashboards/1099511655178?_pl=099425dbd308cbc3cff48931] as well as explorer.synapseprotocol.com
Firstly, chains that rely on SynapseX + SynapseCCTP bridge modules primarily should reduce emissions since the relevant liquidity pools get comparatively less usage. From our data, we see that Base and Polygon see a disproportionate use of the SynapseCCTP module usage as a % of volume. This number hovers around 40-50% for each chain, suggesting that emissions on these pools can significantly be reduced.
Polygon also generates the lowest amount of fees out of all incentivized chains (spending $75k to generate $50k in fees in the last 3 months)
Suggestions:
Reduce Polygon emissions by 50% to 16,200 SYN /mo
Reduce Base emissions by 25% to 38,880 SYN/mo
*while a larger % of volume is routed through CCTP, > 80% of all fees are generated on ETH bridging on Base
Similarly, chains where SynapseRFQ is launched have a similar dynamic: RFQ will offer the cheapest quotes for all transactions under $100k on select chains, meaning that there is less of a reliance on liquidity bridging (SynapseBridge). Despite this, a large percentage of volume comes from/to chains not supported by SynapseRFQ yet. Thus, Arbitrum and Optimism should have moderate emissions cuts.
Suggestions:
Reduce Arbitrum emissions by 10% to 128,304 SYN /mo
Reduce Optimism emissions by 20% to 41,472 SYN/mo
There are a couple other niche situations worth observing. New pools with less assets become more efficient and thus require less spend. The Avalanche migration from .e pools being the first example, and the discussion around deprecating BUSD could be another example. Since both pools will be 3pools, they need comparatively less TVL to offer the same quotes to users.
Currently, CCTP makes up 60% of all volume bridged to Avalanche.
Suggestions:
Reduce Avalanche emissions by 30% to 12,000 SYN /mo
Reduce BSC emissions by 20% to 41,143 SYN/mo (Pending snapshot approval)
Lastly, Canto pools are the second least utilized pools (outside of Polygon). There is some flexibility here – my previous suggestion was to take emissions to zero and use 400k of POL for the pool. > 14% of transactions are over $10k, meaning that a smaller pool size can offer similar quotes for most users and most volume.
Suggestion:
Reduce Canto emissions by 100% to 0 SYN/mo
Summary:
This emissions cut is rather aggressive and cuts total emissions from 388,825 -> 277,999 a 30% reduction. As SynapseRFQ expands to more chains, pool utilization will decrease even further and we can consistently measure volume and fees by specific bridge modules.
I specifically want to invite discussion around emissions on Canto, and if a cut to Arbitrum is necessary (biggest volume chain). Also if there is specific data people want to see I can pull stuff together.
