Key Highlights of the V3 Launch
- Synthetix launched its V3 liquidity platform on Arbitrum, an Ethereum layer-2.
- Kwenta will be the first DeFi protocol to utilize Synthetix’s V3 liquidity infrastructure.
- Synthetix aims to accept multiple token types as trading collateral to differentiate itself in Arbitrum’s competitive DeFi ecosystem.
“No one currently has this on Arbitrum, and it’s going to be an extremely large unlock,” said Matt Losquadro, a Synthetix contributor, in August.
Kwenta’s Role in the Ecosystem
Kwenta, a perpetuals exchange, has already collaborated with Synthetix on other blockchain networks. The perpetuals DEX has facilitated over $32 billion in trading activity across various chains, according to its website.
Understanding Perpetual Futures
Perpetual futures, commonly referred to as “perps,” are a type of derivative that allows traders to buy or sell an asset at a future date without any expiration.
Governance Shakeup and Strategic Changes
In October, Synthetix token holders voted overwhelmingly for a governance overhaul after the protocol missed several product delivery deadlines, including the anticipated V3 multi-collateral perpetuals launch on Arbitrum. With a total value locked (TVL) exceeding $2.3 billion, Arbitrum stands as a hub for DeFi activity.
- GMX currently leads Arbitrum’s decentralized perps market with nearly $390 million in TVL.
- “Arbitrum is the home of DeFi derivatives. There’s no doubt about that,” Losquadro remarked in August.
Proposals for Improvement
On September 25, Benjamin Celermajer, a seasoned SNX investor, proposed a plan to overhaul Synthetix’s governance and operations. The proposal highlighted several shortcomings, including:
- Delays in development that hindered market capture.
- Inability to gain user attention and product adoption.
Following the restructuring, Celermajer took charge of strategy as a core contributor to Synthetix. The protocol is also reorganizing into a foundation to enhance its business activities, which include signing contracts with partners.
Future Prospects for Synthetix
Celermajer emphasized the importance of relentless execution, stating, “If we start to execute relentlessly—get multi-collateral up, communicate our progress, and implement the foundation structure—people will see activity returning to the protocol at a quick pace.”
In September, Synthetix also launched a new app chain, SNAXchain, designed to facilitate cross-chain liquidity and generate trading-fee revenues for native-token stakers. Initially, this app chain will function as an on-chain governance platform for Synthetix’s deployments across various Ethereum mainnet and layer-2 (L2) scaling chains, including Optimism, Arbitrum, and Base.
Looking ahead, Synthetix is exploring additional functionalities for SNAXchain, such as staking for SNX, cross-chain liquidity, and developing a custom-built perpetuals product, according to Losquadro.