Where will Synthetix [SNX] end up after the latest SIP-276 proposal

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Syn­thetix is at the cusp of a break­out after the release of new announce­ments on the net­work. The net­work is rolling out a pro­pos­al to cap SNX’s max­i­mum sup­ply at a “very mem­o­rable” 300 million.

Inter­est­ing­ly, this comes after two failed attempts to increase the per­cent­age of staked SNX accord­ing to the ana­lyt­ic plat­form Mes­sari.

These pro­pos­als have increased the infla­tion­ary SNX rewards which have led to down­ward pres­sure on SNX’s price. The launch of Syn­thetix V3 will offer new stak­ing incentives.

This will align with Kain Warwick’s, Founder of Syn­thetix, vision of build­ing a sus­tain­able rev­enue-gen­er­at­ing pro­to­col that will share its rev­enues with its stakers.

Good talk, Good reward

Notably, the Syn­thetix net­work has seen a mas­sive increase in vol­ume after Atom­ic Swap inte­gra­tions with 1inch and Kwen­ta recently.

Lat­est data shows that over $326k was accu­mu­lat­ed in dai­ly trad­ing fees; a part of which was allo­cat­ed to SNX stak­ers as sUSD rewards.

Despite an unusu­al increase in trad­ing vol­ume, there has also been a rise in laten­cy attacks on Syn­thetix. These attacks are not pos­i­tive but have led to an increase in sUSD rewards for stakers.

This might incen­tivize the stak­ers to con­tin­ue stak­ing after infla­tion rewards end.

Source: Mes­sari

One anony­mous cryp­to enthu­si­ast who went by the iden­ti­ty of null­pack­ets on Twit­ter claimed that Syn­thetix should build a secure chain by col­lab­o­rat­ing with Chain­link.

Accord­ing to him, this would allow Syn­thetix to build a sus­tain­able rev­enue-gen­er­at­ing pro­to­col by con­tin­u­ing to dis­trib­ute sUSD rewards.

Some red flags to consider

While the net­work is attempt­ing to revamp its reward process, there is still some risk that con­tin­ues to hin­der sus­tain­able growth.

Ques­tion marks remain if SNX stak­ers will con­tin­ue to stake for sUSD rewards only.

Anoth­er risk entails stak­ers to main­tain a 400% col­lat­er­al ratio with liq­ui­da­tion occur­ring below 150%.

There is also the risk of a glob­al­ly shared debt pool where­in there is an “out­side” chance of a death spiral.

Source: Mes­sari

That being said, Synethtix’s on-chain pro­pos­als have gained momen­tum in recent days with Kain War­wick at the heart of this activity.

Need­less to say, such pro­pos­als are bound to get some reac­tion from the com­mu­ni­ty. Users have been very vocal about the lat­est SIP-276 pro­pos­al on Syn­thetix tweets. For now, it is only a mat­ter of time before a win­ner among the voic­es is decided.



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