Implementing $SYN as the Token of Choice for Synapse Chain Fees

fool · 2023-09-23T17:24:09+02:00

Objective Implement $SYN as the primary token for fees within Synapse Chain. Update the official documentation to reflect this change. Address the declining...

fool

Objective

Implement $SYN as the primary token for fees within Synapse Chain.
Update the official documentation to reflect this change.
Address the declining price of $SYN and align the protocol with community, supporter, and investor interests by enhancing its utility.

Details of the Proposal

$SYN for Synapse Chain Fees - Given Synapse Chain's pivotal role as the interchain data availability layer for the SIN and its direct settlement with Ethereum, using $SYN as the primary token for its transaction fees can boost its demand and significance within our ecosystem.
Update Official Documentation: - Revisions should be made in the official Synapse Protocol documentation to emphasize Synapse Chain's unique position in the ecosystem and its newfound utility through the exclusive use of $SYN for transaction fees.

Rationale for the Proposal

Addressing the Declining Price of $SYN - Over recent years, there has been a noted decline in the price of $SYN. This has been a source of concern for our long-standing supporters and investors. By enhancing the utility of $SYN, specifically by making it the exclusive token for Synapse Chain fees, we aim to increase its demand, potentially stabilizing and appreciating its price.
Reflecting the Evolution of Synapse Protocol - With Synapse Chain's status as the first interchain rollup and its interoperability features, positioning $SYN at the center of its transactional activity can reinforce its evolving role in the Synapse ecosystem.
Empowering Synapse Interchain Network (SIN) - SIN's groundbreaking ability to offer trustless interchain communication necessitates that every facet of our ecosystem supports its mission. Solidifying $SYN's role in the fee structure of Synapse Chain, a core component of SIN, further emphasizes our commitment to seamless cross-chain communication.
Aligning with Community and Stakeholder Interests - Our community, supporters, and investors are foundational to our growth and success. As we move forward, it's paramount that our strategic decisions align with their interests. Increasing the utility of $SYN is a move toward this alignment, providing assurance of our dedication to their long-term interests.

Conclusion

Synapse Protocol, through its revolutionary technologies like Synapse Chain and SIN, is at the forefront of blockchain interoperability. Enhancing the utility of $SYN, especially amidst concerns over its price, demonstrates our commitment to our stakeholders and the broader community. Adopting this proposal is a strategic move to strengthen our ecosystem and position $SYN as integral to our vision.

dtn

As i know, Celler Network also had same problem. They were earning money, but their token was useless. I think it is important to make token valuable and keep community in SYN ecosystem. Otherwise there is no meaning to hold SYN. I would prefer to hold ETH instead.

0xbottomseller

I'm against SYN being used as the Gas Token on Synchain, following the arguments laid out here.
https://twitter.com/KAndrewHuang/status/1694002513534660747

However, I'm not really clear from the docs if SYN can be used as the token that Notaries and Guards stake, and if there are drawback to it.

Thanks for starting this discussion, Fool.

fool

0xbottomseller

This is an excellent point and I think that thread does cover the key drawbacks behind using $SYN as a gas token for SYN chain. To summarize for the others, the two primary drawbacks are:

No net value for token given that tokens that are bought and immediately used as gas (and likely paid to agents)
Complicating UI/UX and adding overhead to interoperability by requiring $SYN for fees

The above two issues would not align with investor and community desires given that it would hinder adoption and not necessarily appreciate token value.

Given the popular interest in this proposal at first glance (12 votes initial in-favor), I believe much of the consensus comes from the interest in creating utility for $SYN. Having this discourse is a way forward to get to that point so it's great we are having it.

To pivot more to your point of Notaries and Guards, I think a scheme like following could work and it's probably what the devs had in mind:

Gas fees remain as Ethereum for both L1 and L2 in SIN and Synchain (although this can change if the DAO wants)
Agents post a bond (single-sided staking) that is $SYN and receive tips in gas fees (Ethereum) from SIN/Synchain
As SIN and Synchain usage increases, more is paid out to $SYN stakers, and the value of $SYN appreciates

According to the docs here:
https://docs.synapseprotocol.com/synapse-interchain-network-sin/staking-and-fees#proof-of-stake

The devs seem to allude that there is a "token" that can be used for staking:
"For example, in the future, the network could support an LSD (liquid staking derivative) of the token used for staking. As well as a DPOS (delegated proof of stake) model where token holders who want to earn fees can delegate their tokens to those running agents"

This seems like a lot more viable of a model for the network as opposed to using $SYN as gas fees. It would be great to get commentary from the devs or large holders whether they align with this kind of fee model for the network. I understand we're still very early (devnet and mainnet launch are a while away), but getting clarity on this early on will incentivize the community and investors that there is a long term strategy for the native token.

lph

While using SYN as the gas token would certainly increase utility and demand, I think that it could lead to more friction and hence less usage of the SYN-Chain. Ease of use, accessability and function should always come first IMO.
Furthermore using ETH as the gas token aligns more with the broader ecosystem and ETH values (obviously).

I think the SYN token should receive value from other sources. Like securing the network and participating in the economics of SYN-Chain (this could be paid out in ETH if fess are in ETH, which is positiv IMO). I think (hope) this gets implemented with PoS.
Also I think that implementing some kind of deflationary burn mechanism could be beneficial (like the ETH system).

yncsankyo92

SYN needs more utility. There is no use case to hold SYN right now. upvoted!

skya

this is a great proposal
also maybe can implement dual options like discount gas fees or bridge fees if paid with SYN

fool

Guys -- we are at a standstill with this proposal due to some issues brought up by the community. Please see the revised post: https://forum.synapseprotocol.com/d/800-revised-proposal-enhancing-syn-utility-through-network-security-and-staking

If there is no large vocal opposition to this new proposal, I will move it for voting. but please share your thoughts and vote so that we can gauge interest