$21.05 -3.50%
LINK · 5d

Synthetix: The Optimistic Ethereum Transition

With the launch of Optimistic Ethereum (OΞ) mainnet in a few days we are entering a new era for the project, OΞ presents an opportunity to scale the protocol but it also presents a number of challenges. One of the most critical is how to gracefully transition from L1 to a protocol running on both L1 and L2 simultaneously. As discussed in a recent call there remain some unknowns. However, we believe we have a reasonable transition plan. It is not yet clear whether this plan needs to be included within the SIP or each transition phase should be its own SIP, but I will leave that discussion to the community. In addition this post will call out some of the considerations users should be aware of before transitioning to L2.

With this change we are trying to maintain a balance between risk to L1 and maintaining a coherent system across both layers. This conflict is fundamentally incompatible, so we have opted for initiating the transition with the absolute minimum risk to L1, and then adding functionality over the course of the next few months as we build confidence in OΞ.

As a starting point though I think it is worth identifying the end state we are targeting. If we can reach consensus on this target then the path between these two points can remain somewhat opaque while we address specific issues as they arise. The two components we need to focus on are staking and exchanges. We will almost definitely need to maintain exchanges on L1 for the foreseeable future, but we should be able to migrate staking to L2 though. It is significantly less complex to only support minting on a single network, and that network should ideally be the one with the lowest cost to ensure high staking participation. So this leaves us with supporting exchanges on both L1 and L2 but transitioning all minting activity to L2. In order to support this we will then need Synth Teleporters (coined by @theethernaut). These are contracts that allow for Synths t...

Continue on
Recent news