Synthetix founder Kain Warwick has submitted a proposal to shut down SNX’s high-yield returns and cap its supply at 300 million tokens.
According to Warwick, the Synthetix Improvement Proposal (SIP) just presented will end the SNX inflation of 300 million tokens within ten weeks.
just proposed a SIP to close 300 million tokens in ten weeks SNX inflation. After today’s informal discussions, it appears to have a decent chance of passing. A formal presentation is scheduled for next week. Inflation is designed to bootstrap the network, and it has done the job.
– kain.eth (✨🔴_🔴✨) (@kaiynne) August 25, 2022
He went on to say that “inflation is designed to bootstrap the network, and it has done that” because the network now earns fees from atomic swaps. Hence the move to close it.
Proposal SIP 276 titled “Shut down the money printing press” would limit token supply and make any decisions about token supply meta-governance. This means that future changes in SNX supply will require a unanimous decision by the Spartan committee.
Currently, the SNX supply is about 293 million. Therefore, SNX will still have ten additional fee periods for minting and distribution before the supply reaches 300 million.
In recent months, Synthetix has seen a significant increase in revenue thanks to protocols like Curve and 1inch using it for atomic swaps.
In June, Synthetix’s daily cost exceeded one million. While daily fees are now down, they still average over $150,000, and transaction volume on the network this month is currently over $1.2 billion.
While Warwick believes the proposal is likely to pass, some believe that its success may Affects Synthetix.
Crypto analytics firm Delphi Digital said the protocol could struggle to maintain its user base and attract new users with organic revenue, especially if rivals offer higher yields.
3/ Token emissions are nearing the end. Going forward, Synthetix must:
🔹 Maintain existing user base
🔹 Attracting new users with organic revenue in yield-rich markets— Delphi Digital (@Delphi_Digital) August 25, 2022
SNX trades at 2.73 after the last drop of 14% The price of the U.S. dollar traded for 24 hours, reflecting a general decline in the crypto market.
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