SIP-345: Buyback and burn SNX on Base

Author	Cavalier (cavalier-eth)
Status	Draft
Type	Governance
Network	Base
Implementor	TBD
Release	TBD

Simple Summary

Buyback and burn SNX on Base, with the fees earned on Base.

Abstract

After any share to integrators, use 50% of net fees to buy and burn SNX via dutch auction. The other 50% of net fees will be earned by the LPs, which is only ETH.

Motivation

Fees from the isolated Base deployment need to be aportioned to the LPs and wider Synthetix participants.

Specification

Overview

Deploy a dutch auction contract for SNX on Base
Configure any Markets on Base to send fees to a Rewards Distributor on Spartan Pool
Configure the Rewards Distributor on Spartan Pool to direct 50% of fees for ETH LPs to the dutch auction contract.
Burn purchased SNX

For example if $10 of fees were earned on Base, and integrator share is 10%, then $4.50 will go to ETH LPs, and $4.50 used to buyback and burn SNX.

Rationale

Buyback and burn SNX is the most elegant use of fees earned on Base, and tests the model of how satellite V3 deployments could operate.

Burning fees was considered as one solution, but is significantly more complex. In an ideal world, fees for SNX LPs on other chains would be distributed to each staker in the same form that fees are earned in. However, due to the limitations of cross-chain communication at this time, and the complexity of managing these operations across multiple networks, the proposal will instead use the fees to buy SNX back from the market, and subsequently burn the purchased SNX.

Technical Specification

TBC

Test Cases

N/A

Configurable Values (Via SCCP)

nonSNXFeeShare: percentage of fees earned by non SNX LPs that is used to buyback SNX and burn