Description
Synthetix operates as a decentralized liquidity layer on Ethereum and Optimism, revolutionizing the trading of synthetic assets and perpetual futures without traditional order books. Its native token, SNX, is crucial for staking, governance, and earning a share of trading fees. The governance structure of Synthetix involves a collaborative model with community members, core contributors, and elected councils and committees, ensuring a fair and transparent decision-making process. Funding milestones include raising $250,000 in a Seed Round, $610,000 in a Pre-Sale, $23.42 million in a Private Sale, $5.3 million in a Public Sale, and $3.8 million in Partnership Incentives, along with $12 million in later funding rounds. Additionally, Synthetix's strategic collaboration with Optimism brought in an allocation of 9 million tokens, earmarked for distribution to its user base.
Value Proposition
Synthetix is a decentralized liquidity layer on Ethereum and Optimism that serves as a liquidity backend for some of the most exciting protocols in DeFi. Stakers provide liquidity, which collateralizes a suite of synthetic assets, and in return, earn rewards and market yields. This liquidity underwrites the trading of synthetic assets and perpetual futures at oracle prices, eliminating the need for traditional order books and counterparties. As a result, liquidity is composable and fungible across markets, and conventional slippage is removed. Synthetix is unique in the DeFi space due to its innovative features and broad functionality. It serves as a decentralized liquidity layer on both Ethereum and Optimism, significantly enhancing liquidity for various DeFi protocols. The platform specializes in providing liquidity for a diverse range of synthetic assets, including spot synths and perpetual futures, enabling users to trade these assets at oracle prices without traditional order books or counterparties.
Governance
Synthetix protocol is governed, maintained and built by a combination of community members, core contributors, and several elected committees and councils that are voted on by SNX stakers. Learn more about how these governing bodies interact, what they're responsible for, and how they influence protocol improvements via SIPs, SCCPs and other work. The Synthetix governance structure is composed of Councils, Committees, Core Contributors and a DAO. Each governance component is assigned a specific aspect of protocol governance. Councils are directly elected by SNX stakers, while other governance bodies are appointed according to the existing governance procedures. All of the components work together to ensure that the protocol is governed in a fair, transparent and legitimate way in accordance with the direction provided by token holders.
Tokenomics
SNX is the utility, governance and revenue-sharing token for the Synthetix ecosystem. Stakers receive a portion of swap fees on the Kwenta decentralized exchange for trading Synths. SNX is the primary asset used to mint Synths, which are created by staking SNX tokens and maintaining a minimum 400% collateralization ratio.SNX launched with an initial supply of 100M tokens. These tokens were allocated with 60% distributed to investors, 3% reserved for bounties and marketing incentives, 5% for partnership incentives, 12% to the foundation (vested quarterly for 12 months), and 20% to the team and advisors (vesting quarterly for 24 months). Subsequently, a new monetary policy introduced an inflationary supply into perpetuity to reward active stakers. However, the most recent proposal from founder Kain Warwick proposed to reintroduce a capped supply of 300M tokens as the protocol no longer needed inflation to bootstrap network demand. This signals a widespread shift of protocol's seeking to limit inflationary rewards to users in favour of more sustainable yield generated from protocol revenue.
Previous Funding
Synthetix raised funds through several rounds: $250,000 in a Seed Round (Sept 2017), $610,000 in a Pre-Sale (Jan 2018) at $0.27 average price, $23.42 million in a Private Sale (Feb 2018) at $0.47 average price, $5.3 million in a Public Sale (Feb 2018), $3.8 million in Partnership Incentives (Oct 2019) at $0.76 average price, and $12 million in Funding Rounds (Dec 2020). Adding to these achievements, Synthetix also received a strategic allocation of 9 million tokens from Optimism. This allocation did not contribute to Synthetix’s financial health, as these tokens were earmarked for distribution to Synthetix users.
