[Update] Synthetix Passes Proposal to End SNX Inflation

The Spartan Council of Synthetix has voted to approve a new proposal aimed at ending the inflation of SNX tokens. The proposal has been officially passed by the community.

Update on December 12, 2023:

With 100% approval, governance proposal SIP-2043 has been officially passed by the Synthetix community.

"$SNX Inflation? Not anymore. Synthetix Governance has slashed it to 0️⃣.

Get ready for a straightforward staking experience - No weekly claims for stakers, and non-stakers benefit from buyback and burn.

Inflation was transitory, but only for Synthetix."

In summary, token rewards have been used to incentivize liquidity and network growth. These rewards were given to those staking SNX tokens to support validators. However, the project team saw this as a serious issue, as inflation was making SNX "less effective." Thus, they proposed SIP-2043 to address this problem.

With the proposal passed, Synthetix's new strategy will use trading fee revenue to buy back and burn SNX, gradually reducing the token supply over time. This strategy will be implemented in the upcoming Andromeda update.

The price of SNX has risen about 9% in the last 24 hours, currently trading around $4.69.

4-hour chart of SNX/USDT on Binance at 03:30 PM on 12/11/2023

Original Article:

According to proposal SIP-2043, submitted by Synthetix founder Kain Warwick to the Spartan Council, he wants to end SNX inflation by stopping the weekly issuance of new tokens.

"It's official: The Spartan Council has voted to end $SNX inflation.

No more new tokens. No more weekly emissions."

Warwick explained that reducing the weekly inflation rate to zero is necessary, as the current policy is no longer effective and could even have negative effects. He believes this adjustment will not significantly impact the behavior of SNX holders.

"PSA: You will no longer be punished for passively holding SNX. This was needed to scale the early network, but we have crossed a critical threshold. It’s still better to stake, and lower risk now, but if you don’t stake you will still benefit from the token buyback and burn."

SNX has shown strong movement following the proposal's announcement. The price "dumped" slightly in line with the overall crypto market correction on the morning of December 11, but has since recovered, showing a nearly 70% increase over the past month.

1-hour chart of SNX/USDT on Binance at 10:15 AM on 12/11/2023

The positive price reaction reflects the community's sentiment toward the proposal, but the final voting results will not be confirmed until December 18. As of the time of reporting, 100% of votes have supported the proposal.

Voting results as of 09:30 AM on 12/11/2023 (Vietnam time)

Burt Rock, who cast the fifth vote, expressed his agreement with the proposal, expecting the buyback and burn mechanism to make SNX deflationary before the end of 2023.

"Hello friends. I have just had the honor of being the 5th vote to end inflation of the $SNX token.

Before EOY, the buyback and burn mechanism will be implemented, making the token deflationary."