The SNX +3.84% token inflation has been stopped thanks to the approval of SIP-2043, a governance proposal, by the Synthetix community.
With the end of inflation, new tactics like burns and buybacks of tokens will be adopted and included in the upcoming Andromeda software release for the protocol.
As a result, weekly inflationary token rewards will no longer be necessary for Synthetix stakers to claim.
In order to promote liquidity and growth, inflationary rewards were first introduced. However, as the core team observed, token inflation “became less effective as an incentive, leading to their termination.”
In the future, the project intends to use trading fees for burns and buybacks, lowering the total amount of tokens in circulation by acquiring and burning SNX tokens with fees generated by the protocol.
Following the most recent event, the Synthetix token has surged to its annual peak. It is currently trading at $4.75, which is an 8% daily increase, according to The Block’s price page. The token has a $1.5 billion fully diluted market capitalization and a supply of approximately 328 million.
Through its liquidity pools, which presently contain a total value locked in excess of $890 million across the Ethereum and the Optimism Layer 2 network, Synthetix enables decentralized derivatives trading.