The on-chain perpetual contract market is vast and increasingly competitive. Beyond dominant players like dYdX and GMX, Synthetix has seen a notable surge in perpetual contract trading volume. With Synthetix V3 rolling out, SNX is once again attracting capital attention.
According to Token Terminal data, as of March 20, Synthetix ranked fourth in revenue over the past seven days, surpassing GMX, Lido, and Gains Network (note: this revenue reflects only the portion allocated to native token holders; total fees remain higher for GMX).
Declining Spot Trading, Rising Perpetual Contracts
As a key partner of Optimism, Synthetix deployed on the layer-2 network as early as July 2021. Since then, Synthetix incentivized users to migrate staked SNX to Optimism, gradually shifting trading volume and revenue from Ethereum to Optimism.
Dune Analytics data from Synthetix’s official dashboard shows:
- Past 7-day total revenue: $1.33 million
- L1 daily average: $3,577
- L2 daily average: $187,000
Revenue primarily comes from Synths spot trading and perpetual contracts. While Synthetix’s atomic swaps (reintroduced last year) initially showed promise, high fees (0.35% for sETH/sUSD trades) drove users to cheaper alternatives. Over the past week:
- Total trading volume: $1.192 billion
- Peak daily volume (March 17): $492 million (matching GMX’s $500M)
- Atomic swaps contributed <1% of volume, down from ~50% late last year.
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Synthetix Perps V2: Mechanics and Trading Sources
Launched in December 2022, Perps V2 reduces fees, improves scalability, and enhances capital efficiency.
Key Innovations:
- SNX debt pool acts as the counterparty, absorbing all risks/rewards (unlike GMX’s GLP split).
- Dynamic funding fees: Real-time adjustments balance long/short positions, incentivizing arbitrage during imbalances.
- Integrated platforms: Kwenta (primary driver), Decentrex, and Polynomial leverage Synthetix liquidity.
March 17 data highlights:
- $490M total Perps V2 volume
- $480M via Kwenta (98% dominance)
Kwenta’s BTC/ETH positions are near max capacity, with a balanced long/short ratio (~1:1), signaling strong demand and room for growth.
Upcoming Incentives:
Starting April, 200M OP tokens will reward traders weekly over 17 weeks, potentially boosting volume further.
Synthetix V3: Customizable Pools and snxUSD
Synthetix V3 introduces modular upgrades, positioning the protocol as a liquidity hub.
Core Features:
snxUSD Stablecoin:
- Solves sUSD’s scalability/peg issues.
- Enables 1:1 swaps with collateral, tightening the $1 peg via arbitrage.
Isolated Debt Pools:
- Custom risk/reward pools (e.g., ETH-only, high-yield).
- Limits systemic risk; governance sets collateral caps.
Reward Flexibility:
- Pool owners tailor rewards (e.g., by stake duration or volume).
Liquidation Overhaul:
- Distributes collateral/debt among vault participants.
- Full vault liquidation forfeits assets to repay debts.
FAQ
Q: Why is Synthetix’s spot trading declining?
A: High fees (0.35%) compared to competitors deter users, shifting focus to perpetual contracts.
Q: How does Perps V2 differ from GMX?
A: Synthetix’s debt pool absorbs all risk/reward, while GMX splits fees between GLP and stakers. Perps V2’s dynamic fees also better balance positions.
Q: What’s snxUSD’s advantage over sUSD?
A: snxUSD’s design ensures tighter peg stability and easier minting via diversified collateral.
Q: When will V3 fully launch?
A: Features are rolling out progressively; snxUSD and isolated pools are already live.
👉 Discover Synthetix’s latest upgrades
Conclusion
Synthetix’s agile updates—from Perps V2’s success to V3’s modularity—highlight its evolution into a DeFi powerhouse. With snxUSD and customizable pools, V3 mitigates risks while expanding utility, ensuring Synthetix remains a top-tier liquidity provider.
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