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Millions of Synthetix (SNX) Tokens Could be Burned in New Proposal From Founder

source-logo  dailyhodl.com 24 May 2023 19:01, UTC

Decentralized finance (DeFi) protocol Synthetix could potentially burn a significant percentage of its supply if the project moves forward with a proposal from its founder.

In a new blog update, Synthetix creator Kain Warwick lays out 12 different suggestions or opportunities for the project moving forward.

One of Warwick’s 12 points includes a 3:1 split of SNX and a buyback and burn function. While Synthetix still requires some inflation for incentives and liquidity for pools, Warwick says a buy-and-burn feature could still be useful.

“Even if inflation is the only solution here, I don’t think it negates having a countervailing force of buy-back and burn. If we do a 3:1 split we would have around 90m additional tokens to buy back and burn with a market price of $60 million. Where does the money come from to burn these tokens? Treasury fee yield.

Based on recent yield the Treasury Council (TC) is earning around $5m per year, if 100% of this is allocated to buybacks it would take about ten years to complete. If trading volume increases over the next few years this timeline would be reduced significantly.”

Warwick mentioned that the idea is still just conceptual, and nothing has been confirmed by a Treasury Council vote.

Synthetix is a protocol that allows for synthetic assets to be issued for trading on Ethereum (ETH). One of the top platforms powered by Synthetix is Kwenta.io, which allows for trading cryptocurrencies, fiat currencies, and other assets with leverage in a decentralized manner.

Synthetix recently launched support for Pepe Coin (PEPE), Sui Network (SUI), Blur, XRP, Polkadot (DOT), Floki Inu (FLOKI), and Injective Protocol (INJ) perpetual contracts (perps). According to the project, over 40 perps are now available for trading.