The decentralized finance platform, Synthetix, partners with Optimism – an Ethereum layer 2 solution – to launch a demo platform on the Optimistic Virtual Machine (OVM).
The partnership is set to reduce the latency on oracles and exchanges updates by over 20 times and 180 times respectively. As an incentive for its users, Optimism, and Synthetix will run a trading competition on the new platform awarding the top traders with 50,000 SNX (~40,000 USD).
Synthetix is finally moving towards a fully-fledged Ethereum layer 2 solution following a partnership with research firm Optimism. The research firm is launching a Synthetix.Exchange demo on the OVM, which is the virtual machine for the Optimistic Rollup.
The Synthetix Demo
According to the official launch statement, the demo will be rolled out over the next two weeks starting May 6, 2020. The demo, however, will not allow direct deposits and withdrawals from the OVM to Ethereum Layer 1 yet.
Optimism expects the Synthetix demo to reduce the overall latency related to updating oracle and exchanges Ethereum smart contracts.
According to tests, the demo is set to achieve over a 37X reduction in latency in oracle updates and 75X in transaction delays. Notwithstanding, the demo is expected to effectively reduce the latency in gas fees on oracles and exchange by 27.2 times and 143 times, respectively.
OVM delivers high-speed Ethereum transactions in a bid to better the user experience and trading speeds of users on Synthetix. This allows users and developers to deploy smart contracts on the layer 2 solution similar to the Ethereum mainnet smart contracts without requiring to change the contract.
Optimism CEO, Jinglan Wang, believes the demo will allow quicker updates for prices and data on oracles and in turn exchanges. Wang said:
“On L2, Synthetix can update its price oracle more frequently, which means they do not have to temporarily halt transactions as they do on L1. We've found cheap oracle updates to be an unexpectedly major benefit of L2 for DeFi.”
In October 2019, Uniswap, another decentralized finance platform, launched on the OVM layer 2 solution using its own custom code and platform. The current demo on Synthetix, however, provides a ‘general alpha version’ requiring no customization.
The OVM-Synthetix competition
As mentioned before, Synthetix will run a trading competition on the demo offering 50,000 SNX, approximately $40,000 to the top 20 traders. First place will receive 15,000 SNX, second place 10,000 SNX and third place trader receiving 5,000 SNX. The rest of the reward will be shared equally to the rest of the winners.
The competition is running till May 19, 2020, which is about two weeks away.