Synthetix Trading Volume Jumps As Token Soars 12%

Synthetix (SNX), a decentralized finance (DeFi) protocol, turned bullish following the introduction of the Synthetix Improvement Proposal 120 (SIP-120) by founder Kain Warwick.

According to CoinMarketCap data, the price of the SNX token soared 12% in the last 24 hours followed by an 82% surge in the trading volume of the cryptocurrency. Meanwhile, the price of 1 SNX as of 10:54 pm ET Monday was $3.39 and the daily high for Monday stood at $3.57.

This bullish outburst of the cryptocurrency can be attributed to two factors. The first one is the SIP-120 proposal and the second is SIP-276 proposal. The former has proposed the creation of a new exchange function while the latter aims to end inflation as the total supply of SNX tokens will be capped at 300 million if the proposal passes.

The SIP-120 was followed by the integration of decentralized exchange aggregator 1Inch with Atomic Swaps, a new exchange function by Synthetix, to atomically exchange Synthetix assets without fee and initiate zero slippage trades.

Meanwhile, SIP-276 will stop inflation, i.e., the supply will be fixed while the demand will gradually increase, meaning that the SNX token will achieve higher prices if the proposal passes.

"Inflation was intended to bootstrap the network, it has done this extremely effectively. Now that fee yield from atomic swaps and perps is meaningful and growing it is time to wind down inflation, the fact that we are only a few weeks away from the very memeable 300 million mark is cause enough to make this change now," Warwick said in SIP-276.

As pointed out by Messari, the daily volumes for Synthetix have gone up 700% since fully integrating with 1Inch for zero slippage trades.

Synthetix introduced inflation in 2019 and it was supposed to end in March 2023 at 250 million tokens. However, multiple proposals changed the inflation schedule over the time.

"Recently several inflation SIPs were introduced resulting in a significatnly higher rate of inflation, unfortunately higher inflation did not meaningfully impact the percentage of SNX staked in the network so a decision was made to reduce inflation," the proposal stated.

Hence, the new proposal will end the inflation process and the total supply of SNX "will be controlled by metagovernance requiring a unanimous vote to modify it further."