Two Crucial Reasons Why DeFi’s Synthetix Network Token Is Nearing $5
DeFi After a brutal past three to four weeks, DeFi coins are bouncing back. Synthetix Network Token (SNX), the native token of leading decentralized derivatives platform Synthetix, has gained 7.9% in the past 24 hours. The coin is now nearing $5 after spending some time under that pivotal price point.
It seems that there are fundamental catalysts behind the ongoing rally in the cryptocurrency.
Synthetix has seen positive technological developments with the introduction of layer-two scaling. Also, all of DeFi remains in a phase of growth, which means its biggest players, like SNX, should continue their ascent.
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Synthetix Rallies Higher as Bitcoin Begins Recovery Towards $11k
Synthetix’s ongoing rally towards $5 and beyond is seemingly related to the protocol’s recent testing of layer-two scaling solutions. As NewsBTC has covered extensively over recent weeks, high Ethereum transaction fees have been resulting in a downtrend in active DeFi users.
Synthetix looking to layer-two scaling solutions suggests that it may be one of the first DeFi protocols to capture an influx of new users based on minimal transaction fees, rapid transaction times, and an overall good user experience.
The protocol is currently allowing retail users of the DeFi protocol to interact with a basic layer-two iteration of Synthetix. The experience has purportedly been good thus far, but again, the features are limited.
Kain Warwick, the founder of Synthetix, expects the layer-two solution to gain traction over the next year or two. While this may not be good for Synthetix in the near term, he expects the mainnet to eventually “melt your fucking faces.”
Optimistic Ethereum will be the DeFi chain over the next 12-24 months. Nothing is even close. Mainnet is coming and it’s going to melt your fucking faces. @clembalestrat should have a sneak peak for you all very soon…
— kain.eth (@kaiynne) October 1, 2020
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Strength in All of DeFi Boosting SNX
Further boosting SNX, all of DeFi is gaining traction from a fundamental standpoint despite weakness in the underlying market.
For one, Mike Novogratz’s Galaxy Digital has deployed around 5% of its balance sheet into the DeFi space, meaning it is the latest notable crypto financier to enter the space.
Frank Chaparro of The Block got the following quote from Novogratz:
“I think intellectually it is the coolest part of the whole space. BTC is cool don’t get me wrong, but it is digital gold, that doesn’t scare the shit out of the banks. That’s because it is more radical than anything. It is truly peer to peer trading, peer to peer insurance, lending, bringing the blockchain to the financial system. That’s scarier than digital gold.”
Related Reading: Ethereum Transaction Fees Surge to All-Time Highs After Uniswap Launch
Featured Image from Shutterstock Price tags: snxusd, snxbtc CHarts from TradingView.com Two Crucial Reasons Why DeFi's Synthetix Network Token Is Nearing $5
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Nick Chong, @KhareemSudlow