Synthetix Protocol Accumulates Over $1M in Transaction Fees as SNX Token Value Surges 100%

Layer-2 scaling solution Synthetix recently partnered with liquidity provider Curve Finance to create Curve pools for sETH/ETH, sBTC/BTC, and sUSD/3CRV, allowing investors to convert synthetic assets such as sETH into ETH at low cost.

Given the willingness of investors to hold tokens rather than synthetic assets, the protocol has amassed over $1.02 million in transaction fees, 4 times Bitcoin’s daily transaction fees.

Synthetix, an Ethereum-based decentralized finance (DeFi) protocol, has made waves across the crypto ecosystem after witnessing a sudden increase in trading activity and an unprecedented recovery of its internal token, SNX, amid a relentless bear market.

Source of crypto fees for popular projects: cryptofees.info

As a direct result of the massive trading volume, the SNX token also witnessed a brief surge of 105%, taking its value above $3, according to CoinMarketCap.

Synthetix (SNX) Price Index Source: CoinMarketCap

Synthetix founder Kain Warwick posted a blog post sharing his thoughts on this development, emphasizing that it will be difficult for DeFi protocols to absorb Bitcoin’s volatility if the price of Bitcoin falls further:

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“It is critical to understand that Synthetix, an over-collateralized crypto-backed stablecoin suite, could implode.”

However, he attributes Synthetix's recent success to the community's responsiveness to difficult circumstances, and its willingness to experiment with new mechanisms to provide stability.

On May 31, the entrepreneur revealed that SNX tokens make up 99% of his entire liquid portfolio.

On-chain metrics, on the other hand, reveal intent to short the SNX token on numerous exchanges. @napgener from crypto twitter revealed that 15 million SNX tokens maintain short positions on popular exchanges such as Binance, FTX, ByBit and OKX. While there are only 20 million SNX tokens on the exchange, this disclosure points to an imminent price increase that could lead to SNX breaching the $10 value.

The Twitter user also claims that the Celsius network offers 300% Annual Percentage Rate (APR) to users who short SNX.

As the price of Bitcoin fell below $20,000 over the weekend, El Salvador's President Nayib Bukele shared an upbeat piece of advice on Twitter.

In the tweet, Bukele advised investors to "stop looking at the charts and enjoy life." He assured investors that Bitcoin will inevitably recover, saying:

“If you invest in BTC, your investment is safe and its value will increase significantly after the bear market. Patience is the key.”