Synthetix rewards for staking tokens are removed

Estimated read time 2 min read

In a landmark decision, members of the Synthetix community have given the green light to governance proposal SIP-2043. The primary goal? Putting an end to SNX token inflation. Synthetix rewards for staking tokens will be a thing of the past soon.

No more Synthetix rewards for staking: The Transition

The cessation of inflation opens the gateway to transformative strategies. Token buybacks and burns take center stage, ready to unfold with the upcoming Andromeda software release.

Token Rewards Evolution: Farewell to Weekly Claims

As a result, stakers within the Synthetix ecosystem bid farewell to the need for weekly claims on inflationary token rewards. Initially introduced to foster liquidity and growth, these rewards lost their effectiveness over time.

Incentive Realignment: Shifting from Inflation to Trading Fees

Originally, token inflation served as a catalyst for growth. However, the core team recognized its diminishing impact and opted for termination. Synthetix now charts a course relying on trading fees for buybacks and burns.

Tokenomics Overhaul: Using Fees to Drive Supply Reduction

A strategic move emerges as Synthetix plans to leverage trading fees to acquire and burn SNX tokens. This initiative aims to actively reduce the token supply, introducing a new era in the project’s economic landscape.

Market Response: Synthetix Token Surges to New Heights

The impact on the SNX token’s market value is immediate. The token, now priced at $4.75, experiences an 8% surge for the day, reaching its yearly high.

Quantifying Success: Synthetix’s Robust Metrics

Synthetix stands strong with a token supply of about 328 million and a fully diluted market capitalization soaring to $1.5 billion. These metrics underscore the project’s resilience and widespread market appeal.

Derivatives Dominance: Synthetix’s Prominent Role

Facilitating decentralized derivatives trading, Synthetix’s liquidity pools boast a total value locked exceeding $890 million. Operating across both Ethereum and the Optimism Layer 2 network, Synthetix remains a frontrunner in the derivatives trading landscape.