Lyra: updates on high-quality developments

Lyra shared last Friday, October 15, through her Twitter account, the new updates on the high-quality developments to the protocol.

Image on Lyra’s Twitter post

“When we started this project, we made a commitment to launch L2 Optimism and integrate with Synthetix. We wanted to show the world that options could be traded economically using the new optimistic accumulation technology. We take the position that centralized sidechains could never be the future as they lack the security that the L1 blockchain provides”, he said through an article posted on his website.

The company explained that they chose to integrate with Synthetix because they were familiar with the system and it offered certain advantages (no slippage on exchanges, no flash loan attacks, Chainlink prices updated frequently on L2) over using a system like Uniswap. “Synthetix also has an amazing community that we wanted to tap into and hopefully take advantage of our product, and in doing so, have a symbiotic relationship with the development of Synthetix. For these advantages, we accept the limitation that there is only a small selection of tokens at launch. Hopefully, in the coming months, we can work with Synthetix to lower the trading fee and add more tokens that the community wants to see”, he added.

Milestones they have reached

• 05-Jan: Development started

• Jun 7: Audit v0.9 completed

• June 15: Lyra announces

• July 12: trial test

• August 22: Audit v1.0 completed

• August 25: Launch of the Lyra ETH group

• September 13: Uni group rewards program

• September 17: Public LPing

• September 29: updated implementation of the main network and launch of the LINK group.

Development limitations

The company explained that specifically in regard to the strict gas limit that was applied in all transactions, including contract implementations. While 11 million gas sounds like a lot, operations on L2 consumed much more gas than traditionally on L1.

In his view, with the next regenesis, many of these limitations are removed and the development process can more easily match exactly how it has been done for L1 contracts.


According to the company, given the gas cap restrictions, their hand was forced to develop systems that were more monolithic and communicated with each other as little as possible. If you were to read the code (LyraGlobals is a good example), you can see a pattern of build structures that hold on to variables being passed through authoritative functions to avoid over-contracting gas calls multiple times and just when necessary. This was the first set of contracts to be audited.


The company commented that when they started to run full tests of e2e for v0.9 on Kovan using the actual Synthetix contracts, they quickly discovered that transactions to open / close long calls would not work due to the gas cap, as trades were occurring from atomic form each time an option was purchased. This change alone would require another audit, so they decided to take the opportunity to add more functionality to the system.

“Given the information from the v0.9 tests, we had to split the guarantee atomic swap for long calls into a separate transaction. This was a public gatekeeper function “LiquidityPool.exchangeBase ()” – this meant that the logic around the end of the round and available collateral was also modified to accommodate this change”, he noted.

According to the company, this work also introduced the OptionToken ERC1155 tokenized representation of option positions and the TradeType enumeration. Once this was successfully audited, they launched the ETH market.

Lyra rewards

With the introduction of Lyra rewards, the company has created a system of caching and calculating distributions through events issued by contracts.

Also read: Insured Finance shared new updates


Since launch, they became aware of a contract issue that allowed LPs to take an action that was not supposed to be allowed (withdrawal signal after a round had already concluded). “If left unchecked, this has the potential to alter the internal accounting of the system, as well as temporarily freeze LP withdrawals until the conclusion of the next round, both to the extent of the size of the liquidity certificates that took this illegal action. In the worst case, long options that had a net asset value may have been paid with 0 if all the funds in the “reserved price” were exhausted. We quickly solved this problem (this error was introduced between v0.9 and v1.0, so we were able to return to the logic of v0.9)”, he specified.


So, what’s next? Does the next re-genesis of optimism have any impact on contracts? In short, yes. Are you having a massive makeover? Not yet.

“First, let’s tackle delta coverage. Where is? Since our launch, we’ve been working closely with Synthetix to get shorts through the door and launch into optimism, and they’re almost there. Unfortunately, the use of gas will prevent us from using it until regeneration, and as Synthetix shorting contracts have changed, we must perform extensive integration testing with the final version before we can allocate user funds to the automated delta hedging system”, He highlighted.

The most important features to add are:

• Atomic swap for guarantee of long calls

• The ability of traders to close longs when the pool is full.

• The ability to settle many options after expiration at the same time.

• Using Synthetix AddressResolver to keep Synthetix contract addresses up to date automatically

• Use Synthetix.exchangeWithTag () for possible LP fee refunds

• Modification of events to better suit analysis / subgraphic needs

• A switch to enable / disable delta coverage between rounds (allow 1/3 of the additional warranty to be used until shorting is available for each of the individual markets, or could disable it if LPs do not want it)

• Slippage prevention (make sure the trades have the same price as shown in the dApp).

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