Our Network: Issue #54 (Part 2)

Coverage on SNX, ESD, BNT, and SUSHI.

Continued from Part 1.


  • Revenue growth per pool coincided with increased co-investment limits. Co-investment limits are governed by the BancorDAO and determine the maximum number of BNT that can be emitted by the protocol to match single-sided non-BNT deposits. This BNT has no price impact on the external market; rather, it is emitted directly into the liquidity pools where it remains earning fees for the protocol until the BNT and its accrued fees are burned. This is akin to the protocol investing money on marketing to drive usage, then allowing the investment to pay itself off over time. Currently, 54.95% of total BNT supply is staked within the protocol.

  • The burning of protocol-invested BNT and its accrued fees occurs when a non-BNT liquidity provider withdraws their deposit, or when a BNT holder stakes their BNT in a pool. This creates deflationary pressure on BNT, with 47.2M BNT ($80.24M USD) burned since October 18. A perpetual burning mechanism, called the Bancor Vortex, has been proposed to burn fees from each swap instead of fee-burning only occurring with LP withdrawals/deposits. Source: Dune Analytics. A full report on Bancor v2.1 protocol health can be found here.


④ Synthetix

Contributor: Zach Chao, Independent Researcher

  • Synth exchange volume broke its all-time high (ATH) of ~$57M on December 26th reaching $64.9M, which was quickly surpassed on January 3rd with daily volume spiking to $186M. This spike in daily volume could be attributed to the price action of SNX, which broke its ATH of $8.77 that same day. The stickiness of volume is further supported by the Volume Program that kicked off this past September, which incentivizes native integration of the Synthetix protocol across DeFi platforms and protocols.

  • Staking activity has also continued to grow steadily throughout the course of the year, with daily active stakers increasing ~187% over that same time period. Synthetix’s new and improved staking UI, which introduces a more seamless, lower friction staking experience, should foster continued growth in the staking activity going forward. (Source)

  • After decommissioning the Synthetix Foundation in late July and replacing them with three distinct DAOs -- protocolDAO (protocol upgrades), grantsDAO (funding public goods), and the synthetixDAO (funding contributors and other project needs) — the community approved SIP-93, a proposal to replace the synthetixDAO with a Spartan Council, a representative democracy governance structure. There are a total of 7 council seats, which underwent an election process that closed December 8th, but are subject to re-election every three months. Council members received a limited edition NFT by Sam Gilmore, and if not re-elected, will be revoked and rewarded to the new council member(s). 

  • Finally, most recently the protocol has been preparing for the migration to Optimistic Ethereum. While still subject to community approval, a four-phase transition plan has been defined. Some key points of the plan include (1) supporting exchanges on L1 AND L2, (2) moving minting to L2, and (3) fluid movement of synths between L1 and L2. Other alternatives include building an entire parallel version of the protocol on L2, however, this would impact the UX by fragmenting liquidity, siloed to their respective layers. For more in-depth details of the plan and its phases see here


About the editor: Spencer Noon is an investor at Variant.