The community members of the derivatives protocol Synthetix have approved a governance proposal SIP-2043, aimed at ending SNX
+4.80%
Stopping inflation will lead to the adoption of new strategies, including buying back and burning tokens, which will be implemented in the upcoming Andromeda software version of the protocol.
Consequently, Synthetix stakers will no longer be required to claim weekly inflation token rewards.
Initially, inflation rewards were introduced to boost liquidity and growth, but the core team noted that token inflation “became less effective as an incentive, leading to its termination.”
In the future, the project plans to use trading fees for buybacks and burns, reducing the supply of tokens by utilizing protocol-generated fees for acquiring and burning SNX tokens.
SNX Token Price | Source: Het Blok
After the latest development, the Synthetix token has risen to its annual high. It’s trading at $4.75, which represents an 8% increase for the day, according to The Block’s price page. The token has a supply of approximately 328 million and a fully diluted market cap of $1.5 billion.
Synthetix facilitates decentralized derivatives trading through its liquidity pools, which currently have a total value of over $890 million across both the Ethereum and Optimism Layer 2 networks.
