SIP-404: Enable Native LP leverage

Author	Cavlier
Status	Draft
Type	Governance
Network	Ethereum, Optimism, Base & Arbitrum
Implementor	TBD
Release	TBD
Created	2025-09-08

Simple Summary

Improve capital efficiency of providing liquidity to Synthetix V3, by enabling native leverage within Vaults.

Abstract

Liquidity Providers are able to deposit a range of collateral types across Synthetix deployments, but are limited in the capital efficiency they can achieve. This proposal would enable a native levarage value, so that LPs could choose their desired level of rewards and risk.

Motivation

Synthetix is powerful in that it is able to accept a wide range of assets as collateral. The only current avenue for LPs to increase their leverage and capital efficiency, is to deposit and mint a stablecoin on Arbitrum (and soon Ethereum). The lack of native leverage limits the yield on desposited collateral, and the current withdraw timeouts make for convoluted looping.

Specification

TBC

Rationale

Offering increased capital efficiency will attract more liquidity.

Technical Specification

TBC

Test Cases

Test cases will be added to the code base before release.

Configurable Values

Maximum leverage per collateral type