DeFi Protocol Synthetix to Expand to Solana Following Community Vote

TLDR

• Activist investor’s proposal to overhaul Synthetix gains 99.4% approval
• Plan aims to revitalize the protocol and address governance issues
• Proposal includes token redesign and deployment on additional chains
• Governance to be consolidated into a single Spartan Council
• Synthetix’s TVL is down 89% from its 2021 all-time high

The decentralized finance (DeFi) protocol Synthetix is on the brink of a significant transformation as community members have shown overwhelming support for a comprehensive overhaul proposal.

The initiative, spearheaded by activist investor Benjamin Celermajer, has received a staggering 99.4% approval from SNX token holders, signaling a strong desire for change within the Synthetix ecosystem.

Celermajer’s proposal, known as SR-2, outlines a series of changes aimed at rejuvenating the protocol and addressing key issues that have hindered its growth.

Despite the recent upswing in the broader cryptocurrency market, Synthetix has struggled to gain momentum and achieve sustained adoption. Celermajer attributes this to major flaws in the protocol’s governance and day-to-day operations.

The proposed overhaul encompasses several crucial modifications. First, it calls for a complete redesign of the SNX token, with the goal of making token holders “first-class citizens” again.

This redesign aims to enhance the token’s governance capabilities, revenue generation potential, and overall benefits for project participants.

Another key aspect of the proposal is the expansion of functionality for Synthetix’s recently launched Layer-2 network, Snaxchain.

The plan includes migrating SNX to this L2 solution and introducing a native stablecoin, which could potentially increase the protocol’s utility and attract more users.

In a bold move to tap into new markets, the proposal suggests deploying the Synthetix protocol on the Solana blockchain.

This decision is based on the growing use and strong community presence on Solana, despite the network’s past challenges such as its association with the FTX estate and frequent outages.

Governance reform takes center stage in the SR-2 proposal. The current model, which consists of three separate councils (Spartan, Grants, and Treasury), has been criticized for being fragmented and inefficient.

The new plan proposes consolidating all governance power into a single Spartan Council composed of seven seats with equal voting power. This restructuring aims to streamline decision-making processes and improve accountability.

Celermajer believes that these changes will enable Synthetix to deliver new products faster and regain its relevance in the DeFi sector.

This is particularly important given the protocol’s recent performance metrics. Data from DeFiLlama shows that Synthetix’s total value locked (TVL) currently stands at $262 million, representing an 89% decrease from its all-time high of approximately $2.9 billion reached on February 12, 2021.

The community’s enthusiastic response to the SR-2 proposal is evident in the voting results. As of the latest count, 200 SNX holders, representing 18 million SNX tokens, have cast their votes in favor of the overhaul.

This near-unanimous support suggests a strong collective desire to see Synthetix evolve and adapt to the changing DeFi landscape.

While the proposal has gained significant traction, it’s important to note that its implementation will require careful execution.

The Synthetix team will need to navigate the technical challenges of redesigning the token, expanding to new blockchains, and restructuring governance mechanisms.