Synthetix Wants To Permanently Stop Using The SNX Money Printer
Kain Warwick, the creator of Synthetix‘s decentralized finance (DeFi) protocol, has submitted a proposal that would stop very high yield returns for SNX stakers and set a 300 million token supply limit.
On the Ethereum and Optimism networks, traders can issue synthetic replicas of traditional financial assets, commodities, and native crypto assets using the Synthetix protocol.
Warwick stated in a Synthetix Improvement Proposal (SIP) dated August 25 that SNX reward inflation was initially intended to “bootstrap the network,” but he now believes it is unnecessary because atomic swaps can produce stable fee yields.
DeFi protocols 1inch and Curve began using the Synthetix platform to carry out atomic swaps, increasing traffic to the protocol, leading to a significant increase in fee revenue. In June, the protocol’s daily fees exceeded $1 million, which was four times what Bitcoin was bringing in.
The seven-day average charge for Synthetix, according to cryptofees
Synthetix is currently $158,857, which is slightly less than the seven-day average fee for Bitcoin, which is $222,651.
All SUSD stablecoin fees paid by protocol users are distributed to stakers. Currently, the APY for stakers owing to SNX rewards plus SUSD fees is about 67%, but if it’s based purely on “actual return” on SUSD fees alone, this is likely to decline closer to 15%–20%.
Warwick, who is regarded as the “father of modern agriculture” for popularizing DeFi yield farming, stated in a tweet on Thursday that he thought “SIP-276: Turn off the money printer” had a “good chance” of passing after informal discussions. The suggestion will be formally presented the following week.
The current total supply of 293 million SNX tokens will be increased by ten periodic installments of 675,000 SNX tokens to reach the 300 million level before inflation is permanently stopped if SIP-276 is approved by the Synthetix governance community.
Some Twitter users are unsure of what SIP-276 would imply for the protocol in the long run, however “Synthaman” found the news to be very bullish, writing “#SNX is set to become rare commodity with inflation heading to ZERO…”
Delphi Digital, an analyst firm, stated on Twitter that Synthetix would soon stop issuing SNX tokens, making it difficult for the protocol to sustain its present user base and “attract new users with organic revenue in a market where yield is abundant.”
How a halt to SNX inflation may affect the SNX token price, which is now $3.04, up 10.5% over the last week, and whether decentralized finance (DeFi) protocols like Synthetix can draw enough stakers by relying solely on fee revenue, are both unknown.
Warwick also mentioned that SIP-276 will be formally presented next week and, if approved, will be incorporated into Synthetix’s governance structure.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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Synthetix Wants To Permanently Stop Using The SNX Money Printer
Kain Warwick, the creator of Synthetix‘s decentralized finance (DeFi) protocol, has submitted a proposal that would stop very high yield returns for SNX stakers and set a 300 million token supply limit.
On the Ethereum and Optimism networks, traders can issue synthetic replicas of traditional financial assets, commodities, and native crypto assets using the Synthetix protocol.
Warwick stated in a Synthetix Improvement Proposal (SIP) dated August 25 that SNX reward inflation was initially intended to “bootstrap the network,” but he now believes it is unnecessary because atomic swaps can produce stable fee yields.
DeFi protocols 1inch and Curve began using the Synthetix platform to carry out atomic swaps, increasing traffic to the protocol, leading to a significant increase in fee revenue. In June, the protocol’s daily fees exceeded $1 million, which was four times what Bitcoin was bringing in.
The seven-day average charge for Synthetix, according to cryptofees
Synthetix is currently $158,857, which is slightly less than the seven-day average fee for Bitcoin, which is $222,651.
All SUSD stablecoin fees paid by protocol users are distributed to stakers. Currently, the APY for stakers owing to SNX rewards plus SUSD fees is about 67%, but if it’s based purely on “actual return” on SUSD fees alone, this is likely to decline closer to 15%–20%.
Warwick, who is regarded as the “father of modern agriculture” for popularizing DeFi yield farming, stated in a tweet on Thursday that he thought “SIP-276: Turn off the money printer” had a “good chance” of passing after informal discussions. The suggestion will be formally presented the following week.
The current total supply of 293 million SNX tokens will be increased by ten periodic installments of 675,000 SNX tokens to reach the 300 million level before inflation is permanently stopped if SIP-276 is approved by the Synthetix governance community.
Some Twitter users are unsure of what SIP-276 would imply for the protocol in the long run, however “Synthaman” found the news to be very bullish, writing “#SNX is set to become rare commodity with inflation heading to ZERO…”
Delphi Digital, an analyst firm, stated on Twitter that Synthetix would soon stop issuing SNX tokens, making it difficult for the protocol to sustain its present user base and “attract new users with organic revenue in a market where yield is abundant.”
How a halt to SNX inflation may affect the SNX token price, which is now $3.04, up 10.5% over the last week, and whether decentralized finance (DeFi) protocols like Synthetix can draw enough stakers by relying solely on fee revenue, are both unknown.
Warwick also mentioned that SIP-276 will be formally presented next week and, if approved, will be incorporated into Synthetix’s governance structure.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
Follow CoinCu Youtube Channel | Follow CoinCu Facebook page
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