DeFi Protocol Synthetix Upgrading to L2 Scaling to Alleviate Gas Costs for Small SNX Stakers
Popular on-chain synthetic assets protocol, Synthetix is in the first phase of its transition to Optimistic Ethereum, a layer two scalability solution for the second-largest network that continues to grapple with congestion and sky-high fees thanks to all the DeFi craze.
Synthetix founder Kain Warwick is “unreasonably excited” about this development who recently hinted at what’s to come by saying those priced out of staking the digital asset will get “unpriced out” soon.
SNX is the 39th largest cryptocurrency with a market cap of $472 million currently trading in green at $4.70. The DeFi protocol also has about $600 million in crypto deposits.
Get those SNX Working
The first phase involves an incentivized testnet that trial SNX staking on Optimistic Ethereum, aimed at SNX stakers with smaller balancers who may have priced out of participating in staking due to high gas prices.
78.54% of SNX is already collateralized to mint synths.
Optimistic Ethereum is the only “generalized” Layer 2solution for Ethereum, meaning it doesn’t require any specific functionality to be built to support the existing L1 protocols.
“This is a huge milestone for Synthetix, Optimistic Ethereum, and indeed the entire Ethereum space,” reads Synthetix’s official announcement. “Launching SNX staking on OE is a crucial step towards full scalability for the burgeoning DeFi ecosystem, truly allowing anyone around the world access to open financial infrastructure without the friction of high gas costs.”
In this incentivized testnet, the eligible SNX stakers, addresses holding between 1 and 2500 SNX that have staked at least once historically, will get a snapshot of their SNX balance on Optimistic Ethereum’s L2 testnet.
It can then be used to stake, mint, and burn sUSD and also to claim rewards for their participation, which are claimable on the mainnet launch L2.
In other news, SNX is getting listed on crypto exchange Bitfinex on Sept. 26 at 10:00 AM UTC.