SIP-16: Layer 2 Solutions for SIREN

Layer 2 Solutions for SIREN

SIREN’s north star is mass adoption and usability of DeFi Options. This requires new and existing traders to onboard, test and utilise the protocol with minimum friction (i.e. efficient gas costs + user experience).

Due to the current challenges with Ethereum Layer 1 (L1), many protocols have deployed on Layer 2 (L2) solutions to improve the user experience.

One of the most requested items from the SIREN community is to launch on a Layer 2 (L2) solution. This will solve the higher gas fees for users which will make the various actions on the protocol more efficient (trading and managing pool liquidity).

As we finish up our v2 contracts release (more info here), we would like to propose v2 deployment to Polygon Network and soon after to Arbitrum.

L2 Landscape

Currently there are a handful of scaling solutions in the ecosystem including Optimism, Starkware, zkSync, Polygon and Arbitrum.

We have been keeping up to date with each solution’s progress and spent several months researching the most suitable option for SIREN. Polygon Network and Arbitrum have been our conclusions.

Polygon Network
Polygon (formerly known as Matic Network) has become the industry standard for an L2 Sidechain solution. Over 43 DeFi protocols have deployed on Polygon as a scaling solution. Most notably, companies such as Aave and Sushiswap.
Our reason for choosing:

  • EVM Compatible and Subgraph compatible.
  • Strong community support
  • People are becoming familiar with its network.
  • 1000x improvement threshold on transactions.
  • $8 Billion+ of liquidity available

Arbitrum is the simplest L2 rollup network to deploy to, and offers between 50x and 200x lower transaction fees. We’ve also seen many popular DeFi projects express their intent to deploy to Arbitrum. The transaction fee savings are not as high as on Polygon, but optimistic rollups represent a fundamental technical improvement to Ethereum’s scalability, and going forward we think it shows the most promise for becoming a core component of the Ethereum ecosystem.

Why Polygon first, not Arbitrum?
Polygon Network has already been tested by many DeFi protocols. The network is more efficient, cheaper and there are more users/liquidity at the moment. This makes it a great avenue to test our v2 before rolling to other L2 solutions.

Proposed Product Timeline

August 2021

  • Deployment to Mainnet Polygon Network
  • Assess community feedback
  • Host incentives to utilize the network.

September - October 2021:

  • Start on our Arbitrium implementation.

Rewards Mechanism

On L1 we currently run two reward programs: one for providing liquidity to Siren’s AMM pools and one for providing liquidity to the SI/ETH Sushiswap pool. Because DEX pool volume is still significantly larger on L1, we will keep the reward program for our L1 Sushiswap pool as is. Users can continue to receive rewards for providing Sushiswap liquidity on L1.

However, the rewards for AMM pool liquidity will be discontinued on L1, and only run on the L2 pools, starting with Polygon. Users who provide liquidity to Siren’s pools on the Polygon network will receive SI on the Polygon network. Users who wish to aggregate their SI on a single network can use the L1 Polygon bridge to send their SI rewards to either network they choose.

Next Steps

  • Please provide any feedback on the above SIP proposal + cast a deep sea vote below.
  • Quorum Voting will be open for 48 hours from time of posting
  • Snapshot is close to be finalised. SIREN community members will be able to vote via the token in Q3.
SIP-16: L2 Solutions for SIREN
  • Yes to L2 Solutions on Polygon & Arbitrum
  • No to L2 Solutions on Polygon & Arbitrum

0 voters