DeFi platform Synthetixfounder of Kai Warwick, The board of directors proposed in its resolution to limit the token supply at 300 million. Warwick also said that the inflationary model helped relaunch the Synthetix ecosystem.
Synthetix Founder Proposes to Limit Supply to 300 Million in His Offer
Popular decentralized platform Synthetix‘s founder suggested limiting the supply of native SNX tokens to a fixed 300 million as the protocol generates revenue from newer products.
Synthetixfounder of Kain WarwickIn its proposal, he said inflationary supply is the first condition for the protocol to now generate “meaningful” returns from atomic swaps and permanent products.
Warwick said in a statement:
“Inflation was designed to reboot the web, and it did so extremely effectively. The fact that we are only a few weeks away from the very memorable 300 million mark is reason enough to make that change now.”
Ethereum Synthetix, an exchange and synthetic asset platform based on the Internet, is one of the first DeFi applications. It offers services in the printing and creation of synthetic tokens.
Synthetic assets are created by users who earn rewards on the volume of SNX they deposit with Synthetix for liquidity pools that collateralize using SNX and print a synthetic asset against it.
However, Warwick also pointed out that the constant creation and release of SNX to platform users creates sales pressure.
Warwick added:
“On the one hand, inflation redistributes ownership of the network to shareholders, but it also reduces the dollar-denominated wage return (paid in sUSD) per SNX over time. The problem with this is that it constantly puts downward pressure on the price of the SNX token.”
