Decentralized finance (DeFi) protocol Synthetix has taken a significant step in enhancing its services by introducing multiple token types as collateral for leveraged perpetuals trading on Coinbase’s Base network. This development, announced on December 18, is part of the broader revamp of Synthetix following a governance shakeup in October.
A New Era of Trading: Multicollateral Perps on Base
Synthetix has launched "multicollateral perps" on Base, one of Ethereum’s most popular layer 2 (L2) scaling networks. This innovation allows users to post tokens such as Coinbase Wrapped BTC (cbBTC) and Coinbase Wrapped ETH (cbETH) as trading collateral. The integration of these token types is expected to significantly enhance the trading experience for users.
Benefits of Multicollateral Perps
The expansion of collateral options offers numerous benefits, including:
- Direct Exposure: Users can maintain direct exposure to popular crypto assets like BTC and staked ETH.
- More Control Over Margin Positions: Traders have more control over their margin positions, allowing for easier access to hedging strategies.
- Easier Access to Hedging: The ability to use cbBTC and cbETH as collateral simplifies the process of hedging against market fluctuations.
Coinbase’s cbBTC: A Market Leader
Coinbase’s cbBTC has emerged as one of the most popular Bitcoin wrappers, boasting a market capitalization of over $2 billion as of December 18, according to CoinMarketCap. This speaks volumes about the trust and confidence investors have in this token.
Base Network: A Hub for Ethereum L2 Activity
The Base network has become a significant player in the Ethereum layer 2 (L2) ecosystem, with around $14 billion in total value locked (TVL). According to L2Beat, it is currently the second most popular Ethereum L2 after Arbitrum.
Synthetix Exchange: A New Perps Trading App
On December 18, Synthetix also launched its own perpetuals exchange application. This development marks a significant shift in strategy for the protocol, which previously provided smart contract infrastructure for other exchanges to build upon but lacked an in-house trading app.
Perpetual Futures: A Primer
Perpetual futures, or "perps," are derivatives that allow traders to buy or sell an asset at a future date without any expiration. This innovative product enables traders to gain exposure to assets without the need for physical delivery, making it an attractive option for those seeking to hedge against market fluctuations.
Synthetix’s Ongoing Revamp
The introduction of multicollateral perps on Base is part of Synthetix’s broader revamp following a governance shakeup in October. This shakeup was precipitated by the protocol falling short of product delivery deadlines, leading to an overwhelming vote in favor of a proposed governance overhaul.
Governance Shake-Up: A New Era for Synthetix
The governance proposal, outlined on September 25 by Benjamin Celermajer, aimed to "completely overhaul" and improve the governance and day-to-day operations of Synthetix. The protocol has since acquired perps platform Kwenta and leveraged token trading platform TLX.
SNAXchain: A New App Chain
In September, Synthetix launched a new app chain— SNAXchain — aimed at bringing cross-chain liquidity and trading-fee revenues to native-token stakers and on-chain trading products. This move underscores the protocol’s commitment to innovation and its desire to streamline operations.
A Bright Future for Synthetix
Synthetix’s ongoing revamp is a testament to its dedication to improving user experience and expanding its services. The introduction of multicollateral perps on Base, combined with the launch of Synthetix Exchange, marks an exciting new chapter in the protocol’s journey.
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