SNXweave Weekly Review 160 | New crypto news

December 4, 2024

The following post contains a summary of news, projects, and important updates from the Spartan Council and key contributors over the past week.

👉TLDR

SIP-412 to acquire TLX and launch Synthetix Vaults, was introduced last week.
TLX is a leveraged token protocol from Synthetix, and vaults are an important additional service for perpetrators.
Strategic change: shift away from being just a passive layer of liquidity, and towards be more active as a product developer.
SIP proposes an 18:1 token-to-token transaction from TLX to SNX and would also be paid for by issuing 2.6 million new SNX tokens.
The vaults have generated fees of $600,000 to $700,000 for 100,000 TVL over the last 6 months and these fees would now be credited to a vault cash account.
See below Here’s why Synthetix hopes to acquire or build its own vaults
Synthetix Meme Contest

Spartan Council and SIP updates

Present at the Spartan Council Weekly Project Sync on November 27, 2024:
Spartan Council: Cavalier, Fenway
Main contributors: Jared, Kiwi, Matt, Mithrandir, Nikita, Robin, Samuel, Tim, Toran

Last week SIP-412 was introduced to acquire TLX and launch Synthetix Vaults. In today’s recap we will discuss this proposal as well as what was discussed during the presentation call, so let’s get started:

Let’s start with a brief general explanation of the SIP: Synthetix is looking to adopt TLX, a leveraged token protocol from Synthetix, as the basis for launching an integrated vault strategy. Vaults are a very important additional service for Perps as they promote volume and liquidity and represent a very attractive source of income for token holders.

The major strategic change Change underlies this acquisition (and Kwenta). away from being just a passive layer of liquidity, and towards be more active as a product developer. It didn’t develop as expected (single-digit integrators instead of 100s).

The current proposal contains details of this 18:1 token-to-token transaction from TLX to SNX, which is an 8% discount to the 30-day average price. The SNX would be locked for one month, followed by a linear lock-up period of four months. This would also be paid for by issuing 2.6 million new SNX tokens, as the acquisition values TLX at $4 million.

The Vaults have generated fees of $600,000 to $700,000 100,000 in TVL acquired in the last 6 months and these fees would be credited to a treasury wallet immediately after acquisition. The new token design, which will be announced by the end of the year, will see these fees go directly to token holders.

It was discussed whether it would be worthwhile for Synthetix to build its own vaults and strategies from the ground up, and that The explanation for the TLX acquisition was the following reasons:

Hot start: Instead of spending the time building and marketing its own vaults, the TLX acquisition would provide Synthetix with the ability to launch over 50 leveraged token vaults with up to 10x leverage.
Revenue diversification: Vaults generate a new source of income that can be used by SNX token holders.
Complementary products: Leveraged token vaults can generate volume and fees on the Synthetix perp markets (e.g. leveraged token strategies like 3x BTC leverage Synthetix perps and continually rebalance, generating volume and fees).
Strategic fit: The acquisition is in line with Synthetix’s long-term strategy to expand its offerings in the DeFi space, thereby strengthening its position as a market leader.
Efficiency: By combining the capabilities of Synthetix and TLX, operational efficiencies are expected.

Despite the benefits of acquiring TLX, the Synthetix team is still working behind the scenes to introduce some vault variants in case TLX decides not to go through with the transaction.

Voting on this proposal began last week and will continue until today. Cav also wanted to emphasize that this strategic shift is not intended to limit integrators, but rather a push to add a selection of Synthetix-managed products into the mix.

In other news, the Synthetix Meme Contest Yesterday this competition also ended – there was a lot of participation on X and Discord and it brought a lot of optimism to the community. The results will be announced soon. Keep an eye on Synthetix platforms!