Synthetix Announces $12 Million Funding From Top VCs

Key Takeaways

  • Synthetix said top VC firms Paradigm, Coinbase Ventures, and IOSG invested in the project.
  • The three firms purchased $12 million worth of SNX tokens from synthetixDAO’s treasury. 
  • The latest funding indicates growth efforts by onboarding liquidity partners who can also act as valuable ecosystem members. 

Synthetix, a DeFi project for synthetic assets, announced that it raised $12 million from Paradigm, Coinbase Ventures, and IOSG. 

VCs Enter DeFi Governance

The three venture capital firms invested by purchasing SNX tokens worth $12 million from SynthetixDAO’s treasury. 

The funds will be used as collateral to provide liquidity as well as to participate in the Synthetix platform’s governance.

The latest funding indicates growth efforts by onboarding valuable liquidity partners in the Synthetix ecosystem.

Previously, Synthetix founder Kain Warwick reported that synthetixDAO surpassed $1 billion in treasury holdings and now earns more monthly fees (~750k USD) than it spends. 

This means that the project is cash-flow positive on protocol fees alone and there is no shortage of funds.

SNX token sales as a form of funding are not a recent phenomenon. Framework Ventures purchased 5 million Synth (SNX) tokens in 2019 from the project’s treasury to participate in the protocol.

Role of Vcs in Defi

As of late, bringing venture capitalists on board has become a sort of debate topic among the decentralized finance (DeFi) space.

The argument is that giving preferential treatment to VC firms in token sales may go against the ethos of community-driven DeFi.

Others say VCs can play a huge role in helping projects in the DeFi space expand using their vast resources. 

According to Hayden Adams, founder of the popular DEX Uniswap, VCs could be a boon for DeFi projects if they add value instead of just being passive investors.

Jordan Momtazi, a lead contributor to synthetixDAO, confirmed this notion by stating the new VC firms help recruit talent and lead the expansion of Synthetix protocol into new regions.

The onboarding of new partners also comes at a time when Synthetix is preparing to launch the long-awaited V3 update which will allow layer-2 scaling. 

In the meantime, new synthetic assets continue to be launched for trading on the platform, with sTSLA (synthetic Tesla stock) being the latest to be ratified by the Spartan Council.

Disclosure: The author did not hold crypto mentioned in this article at the time of press.

The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

See full terms and conditions.

Source: Read Full Article