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Synthetix Founder Suggests To Simplify Staking SNX In New V3

June 19, 2023 - Around 2 mins mins to read

Key Points:

  • The founder of Synthetix proposed implementing the new SNX staking module in version V3 to simplify the staking process.
  • Accordingly, users only need to deposit SNX without facing market risk or the need for hedging.
  • Initially, the treasury committee will fund the team, but in the future, a portion of the protocol fees may be allocated to the group.
Kain Warwick, the founder of Synthetix, a synthetic asset issuance protocol, said in a blog post that the community had expressed concerns about the complexity of SNX staking over the years, so he proposed implementing a new module staking SNX in Synthetix V3.
Synthetix Founder Suggests To Simplify Staking New SNX In V3

According to Warwick, with the arrival of Perps and its innovative skew balancing mechanism (as shown below), SNX staking has become safer than ever. However, the complexity of the process remains a significant barrier to entry for new bettors.

To simplify the staking process, this module will help users simply deposit SNX and will not face market risk or the need for hedging. This simpler staking approach aims to attract new users to the Synthetix V3 system.

Initially, the Treasury Board will fund this pool (see STP-4), but in the future, a portion of the protocol fees may be allocated to this staking pool. This new form of SNX staking will become the main gateway to the Synthetix ecosystem.

In addition to the new staking module, Synthetix V3 introduces the SNX Liquidity Supply (SNXLP). LPs will provide collateral to the marketplaces in Synthetix V3 and receive all generated protocol fees, less fees for initiatives such as integration offers.

Synthetix Founder Suggests To Simplify Staking New SNX In V3

The SNX LP system has several advantages over the old staking system. It allows LPs to choose which markets to mortgage, and it provides for new unlicensed markets. It is likely that spot markets will have more neutral deltas in V3 to minimize costs for bettors, making it more likely that bettors in V3 will switch to LP over time.

To ensure the transition to V3 goes as smoothly as possible, the SNX staking pool will be launched as a test.

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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