From 472cdf494e38e8637ee5e7f99a6e4281b6e485ff Mon Sep 17 00:00:00 2001
From: cavalier_eth <91091124+cavalier-eth@users.noreply.github.com>
Date: Wed, 21 Aug 2024 11:46:09 +1000
Subject: [PATCH] Create sip-404.md

---
 content/sips/sip-404.md | 47 +++++++++++++++++++++++++++++++++++++++++
 1 file changed, 47 insertions(+)
 create mode 100644 content/sips/sip-404.md

diff --git a/content/sips/sip-404.md b/content/sips/sip-404.md
new file mode 100644
index 000000000..527216f55
--- /dev/null
+++ b/content/sips/sip-404.md
@@ -0,0 +1,47 @@
+---
+sip: 404
+title: Enable Native LP leverage
+network: Ethereum, Optimism, Base & Arbitrum
+status: Draft
+type: Governance
+author: Cavlier
+created: 2024-21-08
+---
+
+## 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
+
+## Copyright
+
+Copyright and related rights waived via [CC0](https://creativecommons.org/publicdomain/zero/1.0/).