Founder of Synthetix: Evolution of SNX Staking and Future Development?

Synthetix Founder: SNX Staking Evolution and Future Development

The Synthetix community has expressed concerns about the complexity of SNX staking. Given that SNX is the collateral that supports all transactions within the Synthetix network, the staking ratio is crucial. Synthetix founder Kain Warwick wrote an article outlining the evolution of SNX staking and stated that with the emergence of Synthetix Perps and its innovative skew balance mechanism, SNX staking will be even safer than before.

1) V3 SNX Staking: It is recommended to use the Synthetix V3 to implement the SNX Staking module. This module simplifies the staking process, as users only need to deposit SNX without facing market risks or needing to hedge. This simpler staking method is designed to attract new users to use the Synthetix V3 system. Initially, the Treasury Committee will provide funding for this pool, and a portion of future protocol fees may be allocated to this staking pool.

2) SNX Liquidity Provision: Synthetix V3 also introduces SNX Liquidity Provision (SNXLP). The LP will provide collateral for the Synthetix V3 market and will receive all generated protocol fees minus any fees used for incentive measures. Similar to V2 staking, LP still needs to hedge its debt and monitor its collateral ratio. However, compared to the old staking system, the new system allows LP to choose staking markets and allows new non-permissioned markets. In V3, the spot market may be more delta-neutral, thereby minimizing staking users’ expenses.

3) To ensure a smooth transition to V3, the SNX staking pool will be launched as a trial project with funding from the Treasury Committee.

4) Governance: Synthetix V3 will continue to be governed based on the scale of collateral provided by SNXLP, ensuring consistency.

5) Trial specifications: The amount of funds allocated from the Synthetix Treasury to this trial pool will be determined after a comprehensive discussion within the community. Currently, there are over 90 million SNX tokens that have not been staked, which undoubtedly provides us with an opportunity. Additionally, since the rewards will initially be paid in SNX, most staking users may reinvest the rewards back into the pool, leading to higher staking volume growth.


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