As a seasoned crypto investor with a penchant for DeFi and a knack for recognizing potential, I must admit that the recent voting results regarding Synthetix’s plans for Arbitrum have left me slightly puzzled. The rejection of the Long-Term Incentive Program extension feels like a missed opportunity, especially considering the potential benefits it could have brought to both parties involved.
It appears that Synthetix, a well-known DeFi project, is encountering issues in relation to its strategies for Arbitrum, a secondary platform for Ethereum. As per the latest community vote, there was opposition towards extending the Long-Term Incentive Program (LTIP) grant proposal.
Arbitrum Holders Vote Against Synthetix Proposal
The objective was to facilitate the debut of Multi-Collateral Perpetuals. This functionality would have enabled traders to engage in trading activities utilizing margin, with ETH, BTC, and USDx serving as collateral when opening perpetual futures contracts on Arbitrum through Synthetix perpetuals.
If the Arbitrum community had given approval, it would have enabled Synthetix to share 900,000 ARB as rewards for trading fees. As outlined in the Synthetix proposal, their aim was to motivate users and increase the active trading volume of Synthetix on the Arbitrum layer-2 platform.
In simpler terms, the Synthetix community found the proposed extension, running from September 16 to November 16, unnecessary. Consequently, a majority of 66% of votes cast for ARB were against this extension, while only 9% showed support for it.
As a researcher involved in the Synthetix project on the Arbitrum network, I must inform our community that the proposed extension for ARB holders has been rejected. This decision means we’ll experience delays in launching the Multi-Collateral Perps feature. Consequently, Synthetix users eager to trade trustless perpetuals with the flexibility of using diverse margin assets will have to exercise patience and wait a little longer.
Simultaneously, there’s a decrease in motivators for interaction. With the absence of the extension, fewer people might choose to trade on Arbitrum through Synthetix perpetuals. Consequently, this could lead to a negative effect on the Decentralized Finance (DeFi) trading platform.
In simpler terms, if Synthetix traders take advantage of the 900,000 ARB fee rebates they’re eligible for, they might decide to withdraw their funds from Arbitrum, which could potentially affect the level of engagement on this platform.
What’s Next? Will ARB Recover From Record Lows?
In the time ahead, we’ll need to wait and observe how Synthetix adapts on Arbitrum, the Ethereum layer-2 with the highest trading volume. Currently, the protocol may need to devise new tactics to attract traders and implement the vital Multi-Collateral Perps function effectively.
Despite potential drops in SNX prices, ARB could find stability as its supply is reduced. Examining the daily ARB-USDT chart, it appears that sellers currently have dominance.
Following a high point in January 2024, the value of ARB has been steadily declining, dropping by up to 80% to current levels. At this point, ARB is at a crucial level of support. If bears continue to dominate, ARB could potentially reach new record lows.
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2024-09-18 06:04