Subscribe to Kain.eth
Kain.ethPatron Wrap
The Infinex Patron Sale wrapped up in September, and now the Patron Distribution is almost upon us, so I'm under pressure to write a retrospective on the sale. Also, I haven't been punched in the head this week, so my brain is working well enough for some long-form writing. “Why do this weird NFT thing and not a seed round from VCs?” I have been asked this question many times over the last few months. My quick, sarcastic response was usually, “Why do something easy when you can do s...
Kain.ethsUSD, the Repeggening
Historical ContextSince Synthetix launched, every SNX staker who minted sUSD has been responsible for their share of the collective protocol debt. While managing debt was never easy, it was initially easier since it only involved spot-price hedging of ETH and BTC. As the protocol evolved, debt hedging needed to cover a complex of inverse tokens, options, wrappers, and derivatives. At some point on this path, hedging debt became impossible. But even ignoring hedging price exposure, other unant...
Kain.ethSynthetix 2024
Firstly, a big shout-out to Fifa and Cav, who helped review and critique my thoughts on this post. It is still unclear which Synthetix entity is responsible for the roadmap (it isn’t, but no one actually adheres to this aspect of governance). Because of this, you are likely to read a range of roadmap proposals from various authors. Decentralised roadmaps ftw! Surely, some ICO must have pitched this idea back in 2017? Most of what I wrote in A Fork in the Road back in October 2023 is still rel...
>700 subscribers
Kain.ethPatron Wrap
The Infinex Patron Sale wrapped up in September, and now the Patron Distribution is almost upon us, so I'm under pressure to write a retrospective on the sale. Also, I haven't been punched in the head this week, so my brain is working well enough for some long-form writing. “Why do this weird NFT thing and not a seed round from VCs?” I have been asked this question many times over the last few months. My quick, sarcastic response was usually, “Why do something easy when you can do s...
Kain.ethsUSD, the Repeggening
Historical ContextSince Synthetix launched, every SNX staker who minted sUSD has been responsible for their share of the collective protocol debt. While managing debt was never easy, it was initially easier since it only involved spot-price hedging of ETH and BTC. As the protocol evolved, debt hedging needed to cover a complex of inverse tokens, options, wrappers, and derivatives. At some point on this path, hedging debt became impossible. But even ignoring hedging price exposure, other unant...
Kain.ethSynthetix 2024
Firstly, a big shout-out to Fifa and Cav, who helped review and critique my thoughts on this post. It is still unclear which Synthetix entity is responsible for the roadmap (it isn’t, but no one actually adheres to this aspect of governance). Because of this, you are likely to read a range of roadmap proposals from various authors. Decentralised roadmaps ftw! Surely, some ICO must have pitched this idea back in 2017? Most of what I wrote in A Fork in the Road back in October 2023 is still rel...
Subscribe to Kain.eth
>700 subscribers
Share Dialog
Share Dialog
Infinex
Years ago, there was a debate in the Synthetix Discord about what to call our new front-end project. After much bloodshed "Kwenta" emerged victorious, but I never lost hope as an "Infinex” maximalist. Well, now Infinex is back from the grave.
Addressing UX Challenges
I’m sure you’re asking, “Why the fuck do we need another front end, we already have KwEtnA powered by Samantha?” I believe it is time to compete directly with CEXs. But that means making some compromises. The infrastructure is ready, it is time to transition to user acquisition mode.
Despite being dragged over broken glass for years while waiting for it, I still love Optimism. But Optimism is still an isolated island, far removed from the Et Hirium mainland. Not everyone is ready to embark on a seven-day voyage to reach this island, no matter how stunning the beaches may be. Do we wait for these lazy people to come to their senses? I tried that. It didn’t work out as well as I’d hoped.
It’s become increasingly clear that the impediments to Synthetix Perps growth can be resolved, but this will require a new approach. It requires Infinex.
A New Approach
Fortunately, Perps already solved the main DEX friction points:
High slippage / low liquidity
High fees
High market risk for Liquidity Providers (LPs)
Infinex removes the remaining ones:
Getting to Optimism
Acquiring sUSD
The need to sign every action
Infinex also addresses a few minor issues with CEXs:
Stealing your crypto
Converting your crypto to fiat and sending it to super-old politicians
Those super-old politicians appointing nightmarish ghouls set on destroying crypto to prove they are definitely THE BOSS OF EVERYONE.
Doxxing you
Achieving all this probably seems impossible in the space of one bear market, but it is achievable with a few trade-offs. History has validated the dYdX approach (ignoring the whole app chain on a DOA L1 plan). My view was that Layer 2 composability would overcome the better user experience (UX) of Starkware. Yet, UX has been a substantial driver of dYdX's growth, alongside token incentives. Looking back on this debate from 2021, it’s a big L for me.
How the fuck does this work?
Infinex's ethos is simple: nothing is sacred but the user experience. The objective is to erase any doubts about whether decentralized Perps can compete directly with CEXs. While many people (myself included) believe we're on the cusp of outperforming CEXs, it's still a challenge for a DEX to compete with a centralized database. Most users do not appear concerned about getting rugged by a charismatic super awkward CEO for some reason. So, rather than waiting for an evolution in crypto UX or for users to start caring about counter-party risk, we are going to change our approach and replicate the CEX experience.
Inifinex can make these trade-offs because we have an ecosystem of decentralised front ends like Kwenta and Polynomial. We need trustless and decentralized interfaces for Synthetix, if you are a degen that is probably the place for you, but there is a very large addressable market that is not willing to deal with the points of friction listed above. Infinex is coming for those users.
The Trader Journey
The journey begins when a trader hears about Infinex from their favourite influenza on Crypto Twitter. They click a referral link and are directed to a sign-up page, influencers get paid a portion of the fees generated by these referrals. Dot eths have got to feed their kids, or dolls, in the case of some bearded Australians. The trader signs up with a username, password, and email - that's all that is required.
Username and password you say?
To maximize the user experience, Infinex generates a new public-private key pair for each user and stores it client-side in the browser. However, this key cannot withdraw funds. It's only used to sign trades sent to the Account Relayer on Optimism..
When the trader clicks deposit, a unique deposit address is generated for them. They can send USDT, USDC, or sUSD to this deposit address. These funds are swept into the margin pool, controlled via governance.
A new margin account is created on Optimism once a user deposits funds. Each user has a unique margin address. This allows traders to verify their margin on-chain at any time. Traders can have USDC or USDT for margin, Infinex loans them sUSD to trade. Users also have an emergency withdrawal function they can call directly if the Account Relayer is down.
Once they're ready to trade, they select a market, choose their leverage, and click "Trade." The order is instantly routed to Optimism, because the order has been signed by the user's PK in the browser there are no additional steps and no need to sign a transaction.
Governance
There will be no Infinex token. The SNX token will govern Infinex, specifically the debt shares token within the Synthetix protocol. Once the Infinex governance contracts are deployed, SNX LPs will hold a vote to decide the number of council seats on the Infinex Council, then they will elect the council. Historically projects within the SNX ecosystem have requested governance oversight, but the SNX token is permissionless, so this is more of an ask-for-forgiveness approach. Infinex will not create its own discord until closer to launch, we will request a channel in the Synthetix discord, and if this demand is not met, we will camp out in #degentrading until the discord mods capitulate.
Trading Interface and Revenue Generation
Infinex will feature two interfaces: a simple mode for new traders (something like Uniswap but with leverage) and a pro mode for experienced traders. The UI is still in development, but sneak peeks might leak in Discord.
Infinex will generate revenue through several mechanisms:
Incremental (additional to Synthetix) trading fees
Integration fees via the Synthetix Integrators program
Fees from SNX LPing
All revenue generated will be used to accumulate additional SNX, which means as Infinex trading volumes increase, Infinex’s SNX LP position will also increase. Infinex aspires to become the single largest LP in the Synthetix ecosystem. I hope we can all look forward to visiting one of the many Infinex mansions in the future.
Beta Testing and Beyond
A waiting list for beta testing is now live at infinex.io. Infinex will be launching alongside Perps V3. So if you want to know the launch date you will need to camp out in the Synthetix discord. A limited number of traders with margin caps will be invited to test the exchange on a first-come, first-served basis, as we get closer to launch. There will also be a referral program for the waiting list, the more signups you drive the higher up the list you go. Think of this as a trial run for ref links for trading…
Synthetix Perps is ready to drive user acquisition, introducing a new generation of users to DEX trading. Infinex aims to be the conduit to onboard these new users. I’m excited to see where the community takes the project!
Infinex
Years ago, there was a debate in the Synthetix Discord about what to call our new front-end project. After much bloodshed "Kwenta" emerged victorious, but I never lost hope as an "Infinex” maximalist. Well, now Infinex is back from the grave.
Addressing UX Challenges
I’m sure you’re asking, “Why the fuck do we need another front end, we already have KwEtnA powered by Samantha?” I believe it is time to compete directly with CEXs. But that means making some compromises. The infrastructure is ready, it is time to transition to user acquisition mode.
Despite being dragged over broken glass for years while waiting for it, I still love Optimism. But Optimism is still an isolated island, far removed from the Et Hirium mainland. Not everyone is ready to embark on a seven-day voyage to reach this island, no matter how stunning the beaches may be. Do we wait for these lazy people to come to their senses? I tried that. It didn’t work out as well as I’d hoped.
It’s become increasingly clear that the impediments to Synthetix Perps growth can be resolved, but this will require a new approach. It requires Infinex.
A New Approach
Fortunately, Perps already solved the main DEX friction points:
High slippage / low liquidity
High fees
High market risk for Liquidity Providers (LPs)
Infinex removes the remaining ones:
Getting to Optimism
Acquiring sUSD
The need to sign every action
Infinex also addresses a few minor issues with CEXs:
Stealing your crypto
Converting your crypto to fiat and sending it to super-old politicians
Those super-old politicians appointing nightmarish ghouls set on destroying crypto to prove they are definitely THE BOSS OF EVERYONE.
Doxxing you
Achieving all this probably seems impossible in the space of one bear market, but it is achievable with a few trade-offs. History has validated the dYdX approach (ignoring the whole app chain on a DOA L1 plan). My view was that Layer 2 composability would overcome the better user experience (UX) of Starkware. Yet, UX has been a substantial driver of dYdX's growth, alongside token incentives. Looking back on this debate from 2021, it’s a big L for me.
How the fuck does this work?
Infinex's ethos is simple: nothing is sacred but the user experience. The objective is to erase any doubts about whether decentralized Perps can compete directly with CEXs. While many people (myself included) believe we're on the cusp of outperforming CEXs, it's still a challenge for a DEX to compete with a centralized database. Most users do not appear concerned about getting rugged by a charismatic super awkward CEO for some reason. So, rather than waiting for an evolution in crypto UX or for users to start caring about counter-party risk, we are going to change our approach and replicate the CEX experience.
Inifinex can make these trade-offs because we have an ecosystem of decentralised front ends like Kwenta and Polynomial. We need trustless and decentralized interfaces for Synthetix, if you are a degen that is probably the place for you, but there is a very large addressable market that is not willing to deal with the points of friction listed above. Infinex is coming for those users.
The Trader Journey
The journey begins when a trader hears about Infinex from their favourite influenza on Crypto Twitter. They click a referral link and are directed to a sign-up page, influencers get paid a portion of the fees generated by these referrals. Dot eths have got to feed their kids, or dolls, in the case of some bearded Australians. The trader signs up with a username, password, and email - that's all that is required.
Username and password you say?
To maximize the user experience, Infinex generates a new public-private key pair for each user and stores it client-side in the browser. However, this key cannot withdraw funds. It's only used to sign trades sent to the Account Relayer on Optimism..
When the trader clicks deposit, a unique deposit address is generated for them. They can send USDT, USDC, or sUSD to this deposit address. These funds are swept into the margin pool, controlled via governance.
A new margin account is created on Optimism once a user deposits funds. Each user has a unique margin address. This allows traders to verify their margin on-chain at any time. Traders can have USDC or USDT for margin, Infinex loans them sUSD to trade. Users also have an emergency withdrawal function they can call directly if the Account Relayer is down.
Once they're ready to trade, they select a market, choose their leverage, and click "Trade." The order is instantly routed to Optimism, because the order has been signed by the user's PK in the browser there are no additional steps and no need to sign a transaction.
Governance
There will be no Infinex token. The SNX token will govern Infinex, specifically the debt shares token within the Synthetix protocol. Once the Infinex governance contracts are deployed, SNX LPs will hold a vote to decide the number of council seats on the Infinex Council, then they will elect the council. Historically projects within the SNX ecosystem have requested governance oversight, but the SNX token is permissionless, so this is more of an ask-for-forgiveness approach. Infinex will not create its own discord until closer to launch, we will request a channel in the Synthetix discord, and if this demand is not met, we will camp out in #degentrading until the discord mods capitulate.
Trading Interface and Revenue Generation
Infinex will feature two interfaces: a simple mode for new traders (something like Uniswap but with leverage) and a pro mode for experienced traders. The UI is still in development, but sneak peeks might leak in Discord.
Infinex will generate revenue through several mechanisms:
Incremental (additional to Synthetix) trading fees
Integration fees via the Synthetix Integrators program
Fees from SNX LPing
All revenue generated will be used to accumulate additional SNX, which means as Infinex trading volumes increase, Infinex’s SNX LP position will also increase. Infinex aspires to become the single largest LP in the Synthetix ecosystem. I hope we can all look forward to visiting one of the many Infinex mansions in the future.
Beta Testing and Beyond
A waiting list for beta testing is now live at infinex.io. Infinex will be launching alongside Perps V3. So if you want to know the launch date you will need to camp out in the Synthetix discord. A limited number of traders with margin caps will be invited to test the exchange on a first-come, first-served basis, as we get closer to launch. There will also be a referral program for the waiting list, the more signups you drive the higher up the list you go. Think of this as a trial run for ref links for trading…
Synthetix Perps is ready to drive user acquisition, introducing a new generation of users to DEX trading. Infinex aims to be the conduit to onboard these new users. I’m excited to see where the community takes the project!
No comments yet