Kain Warwick, founder of Synthetix, a decentralized finance (DeFi) protocol, has proposed disabling high yield yields for SNX stakers and capitalizing the total SNX token supply to 300 million, as reported by Cointelegraph.
According to Cointelegraph, the Synthetix protocol gives merchants the right to issue synthetic modes of native cryptocurrency tokens, traditional financial assets, and commodities on the Ethereum and Optimism networks. In an Aug. 25 Synthetix Improvement Proposal (SIP), Warwick outlined how SNX’s reward inflation was originally designed to bootstrap the network. However, he believes this is no longer necessary as they have the ability to generate fee returns from atomic swaps. Due to the use of the Synthetix platform to perform atomic swaps by the DeFi 1inch and Curve protocols, there has been an increase in fee revenue which has driven more traffic to the protocol. In June, the protocol crossed $1 million in daily fees, four times the amount Bitcoin made. According to cryptofees, Synthetix takes a seven-day average of $158,857 in fees, lower than Bitcoin’s seven-day average of $222,651.
Based on information from Cointelegraph, stakers get all SUSD from protocol users. Recently, the APX for stalkers due to SNX rewards and SUSD fees was 67%, which should be closer to 15-20% if the assumptions are based on SUSD fee performance only. Through a post on Twitter, Warwick revealed that there was a decent chance that SIP-276 would be adopted after discussions. If SIP-276 is approved by Synthetix’s governance community, ten periodic installments of 675,000 SNX tokens will be added to the overall 293 million token supply to reach the 300 million mark before the end of the term. ‘inflation.
Additionally, Cointelegraph noted that analyst firm Delphi Digital posted a tweet indicating that if Synthetix banned the issuance of SNX tokens, the protocol faced obstacles in maintaining its current user base and attracting new users.
(With information from Cointelegraph)