System Overview

Smart Margin v3 Overview

Smart Margin v3 (SMv3) builds on the foundation of previous versions, offering advanced tools to enhance the trading experience on Synthetix Exchange. Designed for flexibility and efficiency, SMv3 brings architectural innovations, streamlined processes, and robust governance to Synthetix derivatives trading.

Architectural Evolution

SMv3 introduces a new architecture centered around a monolithic "Engine" contract, replacing the account proxy approach used in earlier versions. This Engine serves as the central hub for managing key components such as collateral, async orders, and conditional orders. Its modular design ensures seamless integration of future features, consolidating functionality into a single, efficient contract.

Streamlined Authentication Process

The account-based architecture in Synthetix v3 simplifies and secures user interactions. Trader calls are transmitted efficiently between Smart Margin and Synthetix v3, enhancing both performance and security.

To use SMv3, users must set up a Synthetix v3 account via the Synthetix proxy. Existing Synthetix account holders can integrate with the Synthetix Exchange Engine by granting administrative permissions. These permissions are flexible, allowing users to revoke them at any time for additional control and security.

Upgradability in Smart Margin v3

Smart Margin v3 (SMv3) retains the upgradability feature characteristic of its predecessors. The system's upgradability is enabled through the integration of OpenZeppelin's UUPSUpgradeable utility. Although the initial intention was to avoid upgradability, it remains a necessary feature. This is primarily due to the dynamic nature of the Synthetix v3 protocol, which SMv3 interfaces with. Aligning with Synthetix v3’s upgradability ensures that Synthetix Exchange and its traders can adapt to evolving needs and changes in the ecosystem.

The process of upgrading SMv3 is structured and secure. Upgrades are implemented using specific scripts, available here. To ensure safety and prevent any storage conflicts during upgrades, comprehensive internal tests have been developed using Foundry.

It’s important to highlight that upgrade decisions and executions are under strict governance. These actions are exclusively authorized and carried out only if initiated by Synthetix Exchange's ProtocolDAO (pDAO), a multisig owner entity. This governance layer reinforces the security and integrity of the SMv3 system, ensuring that upgrades align with the community's best interests and the platform's strategic vision.