Deploy on zkSync Era

This proposal strives to achieve consensus within the community and deploy the core Increment protocol smart contracts to zkSync Era mainnet.

Proposal details

Purpose and Background
The Increment protocol empowers onchain perpetual swaps and strives to become a fundamental piece of DeFi infrastructure on zkSync Era and beyond. In order to achieve this mission, the Increment smart contract system will be deployed onto zkSync Era mainnet.

Technical Implementation
The smart contract system of the Increment protocol is designed as follows, each blue box representing a smart contract:

The Increment contracts are non-upgradable and the core contracts will only need to be deployed once. The contracts listed below are proposed to be deployed under this proposal:

  • ClearingHouse
  • Vault
  • Insurance
  • UA
  • Oracle

After the deployment of the core contracts, if the community via the onchain governor decides to add new markets in the future then for each new market, new pools, tokens, and a perpetual contract will need to be deployed:

  • 2 virtual tokens, one vBase and a vQuote
  • 1 Curve V2 pool for these 2 tokens, at their current ratio
  • 1 Perpetual contract, that users will interact with from the ClearingHouse contract

Please note that deploying new markets will require a successful onchain governance proposal and execution by the community.

Upon deployment, the initial global parameters of the Increment system are proposed to be set as the following but can be changed in the future through governance. Please note that some parameters are purposely set in a conservative manner for this initial launch.

Global Parameters Description Implementation Contract
minMargin Minimum maintenance margin 3% ClearingHouse
minMarginAtCreation Minimum margin for opening a position 5% ClearingHouse
minPositiveOpenNotional Minimum order size 35 UA (ie. USDC) ClearingHouse
liquidationReward Percent of openNotional paid to liquidator and insurance 1.5% ClearingHouse
insuranceRatio Minimum value of insurance reserve as a % of collateral in vault 10% ClearingHouse
liquidationRewardInsuranceShare % of liquidation reward paid to insurance when position is liquidated 30% ClearingHouse
liquidationDiscount Discount given to liquidator on non-UA assets during collateral liquidations 95% ClearingHouse
nonUACollSeizureDiscount Discount applied to margin calculations involving non-UA collateral, ensuring they are never valued higher than their liquidatable value. 85% ClearingHouse
uaDebtSeizureThreshold Maximum value of losses non-UA collateral can be used to cover, before it is liquidated. 10,000 UA ClearingHouse
initialTokenMaxMintCap Cap on UA able to be minted against each USD-pegged reserve asset 10,000,000 UA Vault

USDC is proposed to be used as the sole reserve asset and is deemed 1:1 ratio to UA at deployment. No other assets will be supported as collateral for the time being.

Simultaneously, the Governor contract address: 0xcce2065c1DC423451530BF7B493243234Ba1E849 will be assigned as the onchain governor of the protocol. Anyone with enough voting power via the governance token INCR can propose or vote on future changes to the protocol, such as adding new markets and making changes to all the parameters listed above.

Effect and Impact Analysis

Increment is proposed to be deployed on zkSync Era, a Layer-2 protocol that scales Ethereum with cutting-edge ZK tech. At the time of writing, zkSync Era is still in the Full Launch Alpha stage and the sequencers are solely run by the Matter Labs team.

According to L2BEAT for the time being, the code that secures the system can be upgraded or changed arbitrarily and without notice by the governor, that currently is a 4 / 8 Multisig. The governor can also change the Verifier contract without notice. In addition, the sequencer cannot selectively skip transactions but can stop processing the queue entirely. In other words, if the sequencer censors or is down, it is so for everyone. That said, zkSync Era has plans to decentralize the system and allow participants in as operators in the near future.

Copyright and related rights waived via CC0.

Poll vote: Closes on Nov 10

  • Let’s deploy on zkSync Era!
  • No, don’t do it
0 voters

Let’s deploy on zkSync Era! :partying_face:


Lets gooo zksync mainnet :partying_face::partying_face::eyes::eyes:

Let’s get the party :tada:

I think the time is now for the project to deploy on Era. I believe the team has acted meticulously and cautiously to get this far.

Let’s deploy already, we’ve waited enough.

It’s time! zkSync Era here we come. LFG!!! :rocket:

go ahead to the moon

Can’t wait live on zksync :shushing_face::shushing_face:

Deploy on zkSync Era, I am very excited.

perfect zksync era like

zkSync Era
we are looking forward to

very solid work! Let’s make it happen! :+1:

Everything seems to be carefully determined, my vote is on deploying on zkSync Era with the said specifications.

its the time, deploy on zksync era. Wait is over

Been waiting a long time…

lets go zksync era :fire: :fire: :fire:

Perfect proposal :slight_smile:

Lets go on Era :slight_smile:

LFGGGGGG I LIKE it. lets do it