Research Summary
The report provides an in-depth analysis of Synthetix’s performance in Q4 2023, highlighting its record trading volume, fee earnings, and the end of SNX inflation. It also discusses the launch of Synthetix V3 on Base and the implications of the Andromeda release.
Key Takeaways
Record Trading Volume
- Impressive Performance: Synthetix Perps recorded its best quarter by volume traded, powering over $13 billion for the second consecutive quarter. This was achieved without any incentives, indicating a strong demand for perps trading.
Record Fee Earnings
- Increased Earnings: SNX stakers earned record fees in Q4 2023, raking in over $10 million in the quarter. Over 95% of these fees came from the Synthetix Optimism deployment, demonstrating the significant role of this deployment in the protocol’s revenue generation.
End of SNX Inflation
- Significant Change: After SIP-2043 passed in the first week of December, SNX no longer offers inflation rewards to stakers, marking the end of SNX inflation. This change is expected to lead to a maximum 6.13% increase in circulating supply in 2024.
Launch of Synthetix V3 on Base
- Major Development: Synthetix V3 was launched on Base in Q4 2023. This version introduces a new architecture, updated Perps design, a new tokenomics experiment, and more, marking a significant step in the evolution of the protocol.
Andromeda Release
- Key Experiment: The Andromeda release on Base begins the first significant test for Synthetix V3. It is expected to improve capital efficiency for LPs and remove the friction of acquiring sUSD to trade on Perps V2.
Actionable Insights
- Monitor the Impact of SNX Inflation End: The end of SNX inflation is a significant change in Synthetix’s tokenomics. Stakeholders should monitor the impact of this change on the protocol’s performance and the value of SNX.
- Assess the Performance of Synthetix V3: The launch of Synthetix V3 on Base is a major development for the protocol. Stakeholders should assess its performance and the implications of its new features for the protocol’s future.
- Track the Outcome of the Andromeda Release: The Andromeda release is a key experiment for Synthetix. Stakeholders should track its outcome to understand its implications for the protocol’s future.
