‘Bullish Divergence' for SNX; Nearly 80% of Synthetix’s Native Token is Locked as Collateral

Synthetix is preparing for technical release and price in holders to stake SNX, of which only a small percentage is left for accumulation.

Synthetix currently has about $600 million worth of crypto deposit locked, which is in decline since hitting the record $1 billion on Sept. 2nd, as per DeFi Pulse.

One of the top DeFi protocols, Synthetix, is a synthetic asset issuance and trading protocol that tracks real-world assets like crypto, fiat, and stocks and uses Chainlink’s oracle for price feed.

Launched on mainnet earlier last year, the protocol has a native token called SNX, which can be locked as collateral along with ETH to mint Synths, which are tradeable ERC20 tokens. Token holders also get the transaction fees generated from Synths being exchanged on Synthetix’s non-custodial DEX.

Ranked 40th as per market cap of $408 million, SNX currently trades at $4.10 in green. While up 500% YTD, the token has lost about 35% of its value in the past month.

But unlike the price, the address activity is holding up nicely with DAA sitting “well above its expected historical levels.”

“When price levels move down, but address activity stays high, this is something we tout as a bullish divergence,” states data provider Santiment.

So Little to Accumulate

With nearly 80% of SNX locked as collateral for minting synths like sUSD, only a small percentage of SNX supply is left for accumulation.

A meager, 3.8% of all SNX is available on crypto exchanges viz. Binance, Uniswap, Poloniex, and Kucoin.

For large players, the over-the-counter (OTC) market, which tends to be opaque, is the place to get their bid filled without incurring much slippage. Here, market participants make use of Airswap and Deversifi’s smart contracts to execute OTC deals.

Over the last six months, 4,520,232 SNX, 3.78% of the circulating SNX supply, worth over $21 million have been swapped through Airswap. During this period, July was the busiest month with 11 trades conducted.

It was also in that month that the leading spot exchange Binance listed SNX, which @Neuros12 says “likely to weigh negatively on future OTC activity for SNX.” With more than 5 million SNX in its wallet, Binance is the largest SNX holder among the centralized and decentralized exchanges.

Keep on Building

The protocol is currently preparing for a technical release called The Fomalhaut that includes Ether collateral enable ETH holders to mint sUSD when sUSD is trading above $1 to help reduce the premium and opening the possibility of sUSD borrowing against BTC tokens such as renBTC and tBTC in future.

Exchange rates aggregator V3 and migrating iETH rewards to the protocol, decrease to 0 SNX per week are also part of it. The Synthetix team continues to build and become an integral part of the DeFi ecosystem.

Amidst the sky-high Ether gas fees, there are also plans to implement layer2 solutions to scale the Ethereum network, which has gotten congested due to DeFi’s speculative frenzy.

“Everyone priced out of staking SNX due to high gas prices is about to be unpriced out,” tweeted Synthetix founder Kain Warwick.

Synthetix (SNX) Live Price

1 SNX/USD =3.1019 change ~ 4.15

Coin Market Cap

324.66 Million

24 Hour Volume

35.49 Million

24 Hour Change

4.15

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AnTy
AnTy
AnTy has been involved in the crypto space full-time for over two years now. Before her blockchain beginnings, she worked with the NGO, Doctor Without Borders as a fundraiser and since then exploring, reading, and creating for different industry segments.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer

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