One decentralized finance (DeFi) altcoin project is surging amid the rollout of a highly anticipated network revamp.
In the past there days, Synthetix Network (SNX), a protocol that allows users to trade synthetic assets, shot up from a low of $1.91 to a high of $2.51, a more than 32% increase.
As the rally took off, blockchain tracking firm Lookonchain noticed one crypto whale withdrew a massive 3.44 million SNX worth $7.72 million from top crypto exchange Binance.
Last week, the project announced the latest progress on the launch of Synthetix V3, an upgrade of the ecosystem almost two years in the making that it describes as the “liquidity layer for DeFi.” According to a new blog post, all of the final main net alpha upgrades for V3 have been sent to auditors for review.
With Syntethix V3 going live, founder Kain Warwick also weighed in on the future of the project in a new blog post this week.
Part of the vision behind V3 is to make Synthetix deployable on any EVM-compatible chain, which presents the challenge of SNX liquidity being spread too thin on each chain. Warwick says the exact solution is still yet to be determined.
“What Are We Trying to Achieve?
Ultimately, what we want is a highly efficient market for liquidity, where demand on any chain is met by supply on that chain. One assumption is that liquidity is finite, so we must be able to share liquidity across networks to avoid liquidity fragmentation – a situation where you can trade on every network but liquidity is poor across all of them due to this finite pool of liquidity being spread too thin…
I should point out here that I think in the long term if demand exists, the SNX token will scale to support the levels of liquidity required.
The problem is that in a bear market, this is a lagging process, where demand does not sufficiently increase SNX collateral. So we are forced into a trade-off: increase the complexity of the system to cement the role of SNX as primary collateral, or find a compromise.”
SNX is trading for $2.36 at time of writing, up 4.5% in the last 24 hours.
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