Staking SNX on Optimism

Once you‘ve migrated SNX to Optimism Mainnet, you can stake your tokens and earn revenue from trading fees and inflationary supply. As of writing the APR is approximately 30% in rewards per week. The fees to claim weekly rewards from L2 are negligible compared to Ethereum Mainnet and the amount distributed to stakers is continually rising as L2 volume increases.

If you haven’t added Optimism Mainnet to Metamask yet, go to chainlist.org, search for “Optimism” and select the option with Chain id “10”.

Once your wallet is set to Optimism Mainnet, go to the Synthetix Staking Gateway, click on “Staking” and then “Mint & Burn” or the “Mint sUSD” button.

Now you can decide how aggressive or conservative your staking strategy will be. Here’s an article with a bit more detail.

You must maintain a C-ratio of at least 500% to collect rewards so it may be a good idea to stay a bit above this. Conservative stakers will start with a c-ratio of 700%-800% and make changes as needed. One of the benefits of using Layer 2 is the ability to make more frequent adjustments by burning or minting sUSD with much lower fees.

If you want the maximum amount of sUSD (and the maximum amount of rewards) you can select “Mint Max” to reach a 500% c-ratio, but there are risks involved. If your c-ratio drops low enough you can have your staked SNX liquidated, so it’s best to keep a close eye on your c-ratio if you choose this strategy.

The right hand panel includes the amount of SNX you have staked and available to stake, along with your current C-ratio and sUSD balance.

If you are minting a custom amount, enter the amount of sUSD you’d like to mint while staying above 500% C-ratio and click “Mint sUSD”. Complete the transaction in your wallet.

Congrats, you’ve staked your SNX on Layer 2. You can now return after each epoch and claim sUSD and SNX in return for collateralizing the protocol. To claim, head over to “Earn”.

You’ll see the estimated APR, your amount of SNX staked, the amount of claimable rewards and the amount of time left to claim before the end of the epoch. If you don’t claim in time your unclaimed rewards for that epoch will be distributed to all stakers during the next epoch. Click on the bar highlighted above to navigate to the Claim page.

From here you’ll see your current sUSD and SNX rewards. I’ve already claimed for this epoch, but if you haven’t you’ll see a “Claim” button. Click this and accept the transaction to complete the process.

If you find your C-ratio is below the minimum and you aren’t able to claim, you can click on the “Burn” option and lower it. Choose “Burn Max” to repay your entire debt (if, for instance, you want to unstake your SNX to move back to Ethereum Mainnet), or “Burn to 500%” to reach the minimum C-ratio before you can claim rewards. Note: if you’re using a more conservative staking strategy then you shouldn’t need to worry too much about burning that often, unless there is a massive downturn in SNX price between weekly rewards claims. You can also burn a custom amount of sUSD to reach a specific C-ratio in case you want to leave a little more room for price movement.

You can find a more in-depth explanation of the mechanics of staking in this documentation.

Also, don’t forget to hedge your sUSD against the debt pool. Here’s a refresher on this process, but essentially you are now holding a portion of the total sUSD that’s been minted. Traders can exchange sUSD on Kwenta for synthetic assets such as sETH or sBTC. As the value of these assets change, the value of the total debt pool changes inversely. You can view the current debt pool ratio by visiting https://stats.synthetix.io/ and then scroll down the page until you find the section for Total Debt. Make sure that you’ve selected L2 at the top of the page to see L2 debt positions.

You can follow the current ratio of assets in the debt pool to hedge against these fluctuations and maintain a steady debt. For example, if the debt pool’s sETH balance is 20% and you’ve minted 100 sUSD, you can go to https://kwenta.io/exchange and exchange 20 sUSD for sETH. Repeat this with all assets and your total debt will generally equal your total synth value. Since you are using a cheap and fast Layer 2, adjusting your portfolio is much more manageable then it would be on Ethereum Mainnet.

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