- Synthetix Foundation breaks into three community-run organizations.
- The launch of the DAOs aims at total decentralization on the platform.
Synthetix Foundation, the lead developer of Synthetix, a synthetic asset DeFi platform, announced this Tuesday that the platform’s governance is transitioning to three decentralized autonomous organizations, otherwise known as DAOs.
In a blog post confirming the decommissioning of the Synthetix Foundation, the governance of the DeFi platform will be released to three DAOs – synthetixDAO, grants DAO, and the protocolDAO. Synthetix is an Ethereum based platform that creates on-chain Synths (synthetic assets) tracking the value of real-world assets.
Decentralized governance is witnessing accelerating growth since the launch of Compound’s COMP governance tokens as these open-source protocols challenge the traditional ventures with an end goal of ultimately giving full control and power of the protocols to the end-users.
A post published by The Defiant, a content platform focusing on open economies and decentralized finance, states the yielding of power by Synthetix opens up entirely new business models and enhances censorship resistance (antifragility).
The SynthetixDAO, already in place, will continue to provide operational funding to the network but with a twist. Instead of the majority of the funding going to the Synthetix Foundation (now decommissioned), smaller projects working on Synthetix will also be able to ask the community directly for funding.
The grantsDAO will provide public goods funding to incentivize community participation in developing the platform in line with the community interest. At its launch, the grantsDAO will receive at least 1 million SNX (Synthetix’s native token) every year for the next three years from the SynthetixDAO.
Finally, the protocolDAO will control all the smart contracts on the network using a 4/8 multisig whereby four of eight delegated signatories need to sign off any significant changes on the protocol. The protocolDAO also puts up some risk management to poor leadership as token holders can override the multisig decision.
Rise to the top
Synthetix platform currently places third on DeFi Pulse protocol rankings with $475.35 million in assets locked, representing a sharp 760% jump since the March 12 market-wide price collapse. The native token, SNX, trades at $3.23, representing a 4.3x rise in the same period.
Recently, Synthetix developers launched a layer two solution in partnership with Optimism in a bid to reduce latency times of oracles and exchanges on the platform.