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Kain Warwick, founder of Synthetix, proposes a fundamental overhaul of SNX. In a new blog post he does not take words on why this change is needed: “There is no incentive to use SNX; Nothing else matters until we solve this. “His answer is the 420 Pool, a new expansion model in which SNX holders deposit their tokens, so that the protocol can be achieved centrally and can seek yield opportunities. Or, in other words,” internalize leverage in the system, reducing the risk for everyone. “
During the launch, the primary source of yield Susde Minting will be expected via Ethena, with future integrations. The old model of Synthetix had a scale problem and Warwick framed this as a necessary evolution: “The problem was the as the collateral pole grew, the transaction income from the stock exchange was not. And the leverage was too capital inefficient … the 420 polar scales linearly with collateral. “
As more SNX is deported, the yield generated proportionate scales – ensuring that returns are not diluted as TVL grows.
The “debt anniversary”
Perhaps the most radical aspect of this plan is a ‘debt anniversary’, which forgives historic Sus debts for 12 months. The question is: will this bring holders of Synthetix debt shares? They have the opportunity to deposit on the 420 Pool and to have the protocol absorb their debt. This re-engagement could stimulate the participation of SNX, because users who previously avoided the complexity of debt management now have a “clean slate” way to use.
On the other hand, is this a sustainable solution or just another attempt to dress old mechanics in a new package? Centralization of debt management in the protocol means that trust assumptions change – strikers no longer have control of their debt, the protocol is. This introduces new risks, in particular as sources such as Ethena do not achieve a high return.
Warwick admits that the lifting boom is not without mistakes, referring to the earlier attempts of Synthetix to scale: “I was able to in an extremely large ETH position in the course of 2019 and 2020 … The problem was not scaled.” Warwick is essentially betting that this time the protocol-driven lifting boom will work, despite inefficiencies in the past.
The record of Synthetix with SUSD is checked; The project neglected its stablecoin, even while other Defi protocols were cashed in on Cryptos’s Killer App.
“Although many OG Defi projects realized that publishing a Stablecoin was extremely lucrative, Synthetix tried to kill theirs,” Warwick said. The SUSD Stablecoin was never designed as a core product and in 2023 Synthetix turned hard to Perps and trade.
Re -building the role of SUS is ambitious, but the challenge remains: Can Synthetix compete with both new and deep -rooted Stablecoin -mittenten?
Possible game changer for SNX
If successful, this model could again accommodate the demand for SNX in ways in which the market does not yet appreciate. SNX is traded at 2022 Berenmarkt Lows based on market capitalization. Warwick suggests that Synthetix is unique positioned to get this done: “We are going to restore SNX as the heart of the Synthetix -computer motor, and we are going to scales SUSD back to his historical position as one of the dominant truly decentralized stablecoins.”
Warwick also indicates the integration of SNX insets with Infinex. If SNX result becomes a standard option in Defi products with a high efficiency, this can result in the ongoing purchasing pressure.
The 420 Pole is either a brilliant evolution or another over-engineering synthetix experiment. The bet is that the market wants a leverage yield without liquidation risks. If synthetix is right, this is the most advanced design product from Defi so far. If it is wrong, this is another chapter in the long history of SNX re -design.
