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Last updated
Last updated
Synapse is the most widely used, extensible, and secure cross-chain communications network.
In this report, we will cover the following:
ยท Synapse Protocol: An overview
ยท Project development
ยท How it works
ยท Technique architecture
ยท Token & tokenomics
ยท Risks and countermeasures
ยท Supported chains
ยท Team & community
Synapse is a cross-layer protocol upgraded from Nerve. It provides support for frictionless interoperability between blockchains. By providing decentralized, permissionless transactions between any L1, sidechain, or L2 ecosystem, Synapse powers integral blockchain activities such as asset transfers, swaps, and generalized messaging with cross-chain functionality โ and in so doing enables new primitives based on its cross-chain architecture.
As of March 10, 2022, Synapse registers a total bridged volume of $7.11B, a total pool volume of $15.58B, and a TVL of $728.4M. The token SYN is priced at $2.25.
On August 28, 2021, Synapse was launched.
On September 14, 2021, Synapse was completely separated from Nerve after joint governance vote.
On August 29, 2021, Synapse added stablecoin bridges between Ethereum, Avalanche, Binance Smartchain and Polygon.
In October 2021, Synapse started to support stablecoin to connect to Arbitrum and Fantom.
In November 2021, Synapse started to support Harmony, Boba, Moonriver, Optimism, and Aurora.
On January 3, 2022, Synapse launched Aurora.
On January 14, 2022, Synapse started to support Coinbase Wallet.
On January 17, 2022, Synapse was launched on Moonbeam mainnet.
The Synapse network is secured by cross-chain multi-party computation (MPC) validators operating with threshold signature schemes (TSS). The network is leaderless, and maintains security by each validator running the same process upon receiving on-chain events on the various chains that the MPC validator group tracks. Once two-thirds of all validators have collectively signed the same transaction using their own individual key, the network achieves consensus and issues a transaction to the destination chain.
a. Key technology
The Synapse network is secured by cross-chain multi-party computation (MPC) validators operating with threshold signature schemes (TSS).
b. Technical Architecture
Synapse consists of two components, Synapse Network and Synapse AMM. The Synapse Network is a cross-chain infrastructure powered by multi-party computation validators that collectively react to events on blockchains connected by the Synapse network. The Synapse AMM is a cross-chain AMM supported by the network that prices and rebalances assets based on capital flow.
(i) Protocol network security
The network is leaderless, and maintains security by each validator running the same process upon receiving on-chain events on the various chains that the MPC validator group tracks. Once two-thirds of all validators have collectively signed the same transaction using their own individual key, the network achieves consensus and issues a transaction to the destination chain.
(ii) Cross-chain AMM
When the Synapse Network receives confirmation of on-chain events on a source chain, the requisite wrapped assets can be permissionlessly minted directly on the network. However, users often would like to receive bridged assets native to another destination chain that is connected to but distinct from the Synapse network. When this is the case, the Synapse AMM is called upon to execute required transactions during the bridging process. In other words, the wrapped tokens generated during cross-chain transfer is automatically exchanged for local assets on the destination chain via AMMs on the destination chain. Synapse has a corresponding AMM pool on each chain, i.e. liquidity pool, which employs a stableswap algorithm to maintain fair pricing.
After the cross-chain protocol Nerve is upgraded to Synapse Protocol, the NRV token will become SYN at a token migration rate of 1 NRV = 2.5 SYN.
(i) Token: SYN
Ethereum contract address: 0x0f2d719407fdbeff09d87557abb7232601fd9f29
(ii) Distribution mechanism: The current max supply of SYN is set at 250,000,000, but can be changed in the future through community discussion and an ensuing governance vote.
SYN release schedule: As a result of SIP-5, current SYN liquidity mining programs have had their emissions altered to reflect usage of each pool being supported, with some of these changes being phased in over time. Eventual emissions are planned to stabilize at 725K SYN per week, though this may change if the usage patterns of Synapse pools changes. Emissions can be changed in the future in response to opportunities that require incentivization, and as a result of community governance.
(iii) Functionality: SYN is the asset that powers the Synapse Ecosystem. It is used for community governance votes via the SynapseDAO, as an incentive for the liquidity providers that enable the protocolโs cross-chain functionality, and as a subsidy to pay for the gas expended by network validators to secure transactions across the network.
Once the Synapse Chain reaches the Archean Phase, SYN will provide economic security for the chain by requiring validators to stake it in order to operate on the network. As the native token of the Synapse Chain, SYN may also be used to pay for transactions within the network as well as for bridging to other chains.
Security Incidents:
On November 6, 2021, the Synapse cross-chain bridge was attacked by hackers, mainly because the calculation of the basic virtual price of LP tokens was not examined in the external AMM calculation contract Metapool. The attacker reduced the virtual price through circular transactions and withdrew funds from the LPs, thereby acquiring approximately $8 million worth of nUSD assets. Due to the responsiveness of the Synapse team, the hackers did not have the opportunity to transfer the money across chains. The team did not process the hackerโs transactions, and would refund the lost Synapse nUSD to the affected liquidity providers in full. In response to this incident, the team substituted the Metapool contract with the Stableswap contract as the new nUSD fund pool to ensure security.
The security measures adopted are mainly to conduct code audits.
Code audits: Certain parts of the Synapse smart contract code have been audited and the remaining is still underway.
ยท The stableswap AMM contract has been audited by Certik, OpenZeppelin and Quantstamp.
ยท The SYN reward contract was forked by SushiSwapโs MiniChefV2.
ยท The Synapse Bridge smart contract is undergoing multiple audits.
ยท The Synapse network validator code has not been reviewed.
Ethereum, BSC, Avalanche, Fantom, Polygon, Arbitrum, Harmony, Boba, Moonbeam, Moonriver, Optimism, Aurora.
a. Project team
To be discovered.
b. Community
