The Gospel of DeFi? Synthetix plans to launch the Synthetix V3 protocol in the fourth quarter.

Synthetix plans to launch Synthetix V3 protocol in Q4.

Author: Tom Mitchelhill, Cointelegraph; Translation: Song Xue, LianGuai

The latest project aiming to bridge the usability gap between centralized and decentralized exchanges is the decentralized derivatives protocol Synthetix, which plans to launch the Synthetix v3 protocol and its decentralized exchange frontend called Infinex.

Synthetix founder Kain Warwick pointed out that Infinex is a decentralized perpetual futures exchange frontend that supports trading on Optimism (OP). It is the “missing component” that could bring more users to DeFi once it is launched in the fourth quarter.

“From a trading perspective, the functionality of DeFi is quite similar to CeFi. We have liquidity, we have markets, we have depth, we have execution time. But there is still one key component missing.

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“Right now, you still have to overcome the dilemma of self-regulation and all the other little things that add significant friction. For daily users accustomed to trading on CEX, this friction makes the product very difficult to use.”

Infinex will be one of the projects that aim to improve the adoption and usability of DeFi protocols. On September 7, a new protocol called Bumper was launched, which aims to protect users’ assets from crashes by pricing contract premiums based on actual volatility rather than historical volatility.

On September 6, Charles d’Haussy, CEO of the DyDx Foundation, stated that the exchange will soon be available.

Friction Points in DeFi

Kain provided details about the upcoming product, explaining that Infinex’s main focus is to make it easier for traders to access decentralized perpetual assets by eliminating friction points such as complex account controls and the need to sign every transaction.

“Essentially, it’s the functionality and experience of a centralized exchange supported by decentralized infrastructure.”

In March of this year, Sid Powell, co-founder of Maple Finance, believed that institutional adoption of DeFi can only be achieved by reducing friction. That month, Maple Finance launched downloadable monthly interest reports that lenders can submit to auditors or accountants.

Meanwhile, Kain pointed out that because Infinex is only the “frontend” of the underlying derivatives protocol, it will initially not impose any geographical restrictions or “KYC” restrictions on users.

Although many other decentralized exchanges such as DyDx and Uniswap have implemented such measures, Kain stated that the control of Infinex will be downgraded to decentralized governance.

“SNX token holders can decide whether to implement geographical restrictions, geographical fences, KYC, or whatever. They can make decisions and vote according to their own preferences.”

Infinex will be launched together with the upcoming latest decentralized derivatives protocol, Synthetix v3. Kain explained that Synthetix v3 forms the underlying architecture of the Infinex frontend and will include a “series of upgrades” on how traders provide and obtain liquidity.

“The biggest change in Synthetix v3 is the permissionless market. These permissionless markets will allow people to do any type of financial engineering they want, propose a new market, deploy it, and attract liquidity.”

“It’s similar to permissionless mining pools in the style of Uniswap,” he added.

In recent months, decentralized derivatives have become increasingly popular among fund managers and traders, said Henrik Andersson, Chief Investment Officer of Apollo Capital. He believes that this emerging field will eventually become the next major breakthrough in the entire DeFi ecosystem.

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