Synthetix launched its v3 liquidity platform on Arbitrum, an Ethereum layer-2, following a governance upheaval at the decentralized finance (DeFi) protocol.
Synthetix announced that Kwenta, a perpetuals exchange, will be the inaugural DeFi protocol on Arbitrum to utilize Synthetix’s v3 liquidity infrastructure.
Synthetix announce Kwenta launch on Arbitrum
Synthetix, a company that specializes in providing liquidity for decentralized exchanges (DEXs), is wagering that accepting a variety of token types as trading collateral will set v3 apart in Arbitrum’s competitive DeFi ecosystem.
“This is not currently available on Arbitrum, and it will be a significant unlock,” stated Matt Losquadro, a Synthetix contributor, in August.
Kwenta has already established partnerships with Synthetix on other blockchain networks. Kwenta’s website indicates that the perpetuals DEX has facilitated trading activity across numerous channels totaling over $32 billion.
Perpetual futures, or “perps,” are a derivative that enables dealers to purchase or sell an asset at a future date without an expiration.
In October, Synthetix SNX’s stock price decreased by $1.47. Token holders voted overwhelmingly in favor of a proposed governance restructuring after the protocol failed to meet product delivery deadlines, including the planned introduction of its v3 multi-collateral perpetuals on Arbitrum.
Arbitrum is a center for DeFi activity, with a total value locked (TVL) of more than $2.3 billion, as per data from DefiLlama.
Arbitrum’s decentralized perps market is dominated by the DeFi protocol GMX, which has amassed nearly $390 million in TVL.
“DeFi derivatives are headquartered in Arbitrum.” That is undeniable. In August, Losquadro stated, “The competition is fierce, and there are many protocols.”
A longtime SNX investor, Benjamin Celermajer, detailed a plan to “completely overhaul” and enhance the governance and day-to-day operations of Synthetix in an SR-2 proposal on September 25.
The proposal claimed that delays in development prevented Synthetix from capturing market narratives, user attention, and product adoption,” among other alleged shortcomings.
After the restructuring, Celermajer assumed responsibility for strategy as a primary contributor to Synthetix, according to a blog post published on October 4.
The blog also stated that Synthetix is reorganizing as a foundation to “improve and streamline our capabilities regarding business activities that require signing contracts with partners,” among other potential benefits.
In an interview with Cointelegraph, Celermajer stated, “If we begin to execute relentlessly—establishing multi-collateral, communicating our progress, and implementing the foundation structure—people will observe a rapid return of activity to the protocol.”
SNAXchain, a novel app chain Synthetix introduced in September, is designed to provide native-token stakers and onchain trading products with cross-chain liquidity and trading-fee revenues.
According to a post on the X platform on September 4, the app chain will initially function as an onchain governance platform for the management of Synthetix deployments on the Ethereum mainnet and layer-2 (L2) scaling chains, such as Optimisim, Arbitrum, and Base.
Nevertheless, Losquadro stated in September that Synthetix is currently exploring “future functionality for SNAXchain, including staking for SNX, cross-chain liquidity, and powering a custom-built perps product.”
