Kain WarwickFounder of Synthetix, says that SNX deployment has been broken, and the solution is a leverage, no-liquidation postponing model that absorbs debts and scales yield. 420 Pool, a new setting model in which SNX holders use their tokens, so that the protocol can manage the debts centrally and find yield options.
During the launch, the primary source of proceeds will be Susde via Ethena, with future integrations expected. The old Synthetix model had a scale problem and Warwick presents this as a necessary evolution. Perhaps the most radical aspect of this plan is a ‘debt anniversary’, which forgives historic Sus debts for 12 months. Synthetix debt interest holders have the option to deposit in 420 Pool and to have the protocol absorbing their debt. Reintry could stimulate SNX participation, because users who previously avoided the complexity of debt management now have a “clean slate” to use.
420 Pool is either a brilliant evolution or another over-engineering synthetix experiment. The bet is that the market wants a leverage yield without the risk of liquidation. If synthetix is right, this is the most advanced Defi design product to date. If this is not the case, it is another chapter in SNX’s long history of redesign.
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