The founder of the Decentralized Finance protocol Synthetix, Kain Warwick, intends to put the money printers for the SNX token on hold for good. That decision would end high token returns for strikers and cap the total number of SNX at 300 million tokens.
What is the Synthetix protocol?
The Synthetix protocol allows users to launch a synthetic version of cryptocurrencies, traditional financial assets and commodities on Ethereum. On August 25, Kain Warwick stated that inflation for SNX was intended to kick-start the network. However, according to the founder of the protocol, this is no longer necessary at the moment and they can earn enough from atomic swaps.
Synthetix is ​​currently bringing in a lot of revenue as a result of 1inch and Curve using the platform for atomic swaps. In June, Synthetix raked in $1 million in transaction fees on a daily basis, which was four times the transaction revenue for Bitcoin miners at the time. At the time of writing, that number has fallen to an average of $158,857 per day, which is slightly lower than Bitcoin’s average of $222,651.
Return of 67 percent
At the time of writing, strikers on the Synthetix platform receive a return of 67 percent. 15 to 20 percent of that number comes from the transaction fees the platform brings in, with the rest coming from inflation. That is exactly what Kain Warwick now wants to put an end to. If you look at it from this point of view, he seems to have a good point. A 15 to 20 percent annualized return before staking is impressive in and of itself.
It seems that Warwick’s proposal will make it, he himself indicates via Twitter. “I just submitted a SIP proposal to stop SNX inflation at 300 million tokens in 10 weeks. After some informal discussions today, it seems there is a reasonable chance of getting that proposal through,” said founder Kain Warwick. Formal discussions on the proposal are scheduled for next week.