Synthetix (SNX), currently ranked as the 54th largest cryptocurrency by market capitalization, has been on an impressive upward trajectory in recent times. Over the past 30 days, SNX has surged by a remarkable 60%, while its year-to-date performance showcases a staggering price increase of over 108%. These substantial gains underscore the potential for continued bullish momentum for both the decentralized protocol and its native token.
Synthetix’s role in the DeFi space
Jake Pahor, a well-known cryptocurrency analyst and writer, has expressed a highly optimistic outlook for SNX, describing it as the ultimate “picks & shovels play” in anticipation of the forthcoming bull market. Pahor emphasizes Synthetix’s pivotal role as the backbone for derivatives trading within the decentralized finance (DeFi) sector. The protocol has already achieved an annualized revenue of $54 million, serving as a platform that enables the creation and trading of synthetic assets, including commodities, stocks, and currencies.
While Synthetix may not have user-facing front-ends, it powers several popular DeFi applications such as Kwenta, Polynomial, dHedge, and Lyra. As the demand for permissionless trading of spot synthetics and on-chain derivatives of traditional assets continues to rise, Synthetix is well-positioned for significant growth in the coming years.
A key driver of Synthetix’s success lies in the fees generated on every synthetic asset exchange, which range from 0.1% to 1% (average 0.3%). These fees are directed towards SNX stakers, creating a rewarding incentive structure. SNX, sUSD, and eSNX are the three primary tokens utilized within the Synthetix ecosystem, each serving distinct purposes in staking, collateralization, and protocol functionality.
Market position
With a circulating supply of 326.5 million SNX tokens and a total supply of 327.2 million, Synthetix boasts a market capitalization of $1.14 billion, solidifying its position at the forefront of the Synthetics category. Additionally, the protocol’s treasury holds a healthy $145.96 million, including stablecoins, BTC/ETH, and its native token SNX.
Synthetix operates under the governance of four key bodies: Spartan Council, Treasury Council, Ambassador Council, and Grants Council. Decisions and proposals put forth by these councils are subject to majority votes from SNX stakes, ensuring a democratic and community-driven approach to protocol development.
Originally established as Havven in 2017, with a focus on stablecoin technology, the project rebranded in 2018 to become Synthetix, pivoting its attention towards synthetic assets and derivatives trading.
According to Pahor’s analysis, Synthetix’s “strong ecosystem” of projects built on its infrastructure and its first-mover advantage has firmly established it as the market leader in the Synthetics category. Furthermore, the impending release of Synthetix V3, which includes Perps, Base, and USDC, is expected to serve as a significant catalyst for the protocol. Additionally, the protocol’s DEX perps feature aims to compete with centralized exchanges, while the Infinex front-end promises a user experience similar to traditional centralized exchange (CEX) trading.
Current market performance
As of the most recent data, SNX is trading at $3.455, reflecting a significant 4.7% uptrend over the past 24 hours. This positive momentum follows a 31% gain over the last fourteen days. In the immediate future, SNX faces a crucial hurdle in surpassing the resistance level at $3.58, which is necessary to retest its recently achieved yearly high of $3.810. As SNX reached this high only a few hours ago, its next target is to surpass the $4 mark, a level not seen since August 2022.
While the cryptocurrency market is known for its volatility, Synthetix’s recent performance and its role in the DeFi ecosystem have positioned it as a cryptocurrency to watch. The protocol’s ability to adapt and innovate, along with its strong community-driven governance, bodes well for its continued growth. As it navigates the challenges and opportunities in the crypto space, SNX is undoubtedly a project that many investors and enthusiasts will be closely monitoring in the months and years to come.
