Tokenized asset issuance platform Synthetix has secured a $20 million investment through a new partnership with quant trading and investment firm Web3; DWF Labs.
Algorithmic trading and market making firm acquired $15 million of native SNX token from Synthetix paid with USD Coin (USDC) in March 2023. DWF Labs will be tasked with increasing SNX token liquidity and market making on centralized exchanges and decentralized.
Synthetix perpetual futures will be integrated into DWF Labs’ trading business as part of the deal. DWF Labs has also committed to purchase another $5 million worth of SNX tokens once the integration of Synthetix services is complete.
Synthetix allows users to convert various real world assets into derivatives called Synths, They provide exposure to a range of different assets. Owning SNX tokens allows users to create Synths by locking tokens in a smart contract and minting Synths against the corresponding value.
Users can trade Synths using Synthetix’s pooled collateral model, where trades between Synths generate commissions for SNX collateral providers.
On-chain synthetic asset creation tracks the value of real-world assets, including synthetic fiat currencies or commodities like gold, and financial instruments like stock indices.
Andrey Grachev, managing partner of DWF Labs, highlighted that the association offers simplified trading mechanisms in the field of decentralized finance (DeFi):
“By leveraging Synthetix’s high liquidity and composability, platforms can now offer better trades with less slippage, enabling innovative hedging strategies and unique use cases.”
Synthetix’s V2 platform surpassed $400 million in perpetual swap daily trading volume in March 2023, according to data from Dune Analytics.
The derivatives liquidity protocol experienced increased daily commissions in June 2022 following a collaboration with liquidity provider Curve Finance to create Curve pools for Synthetic Ether (sETH)/Ether (ETH), Synthetic Bitcoin (sBTC)/Bitcoin (BTC) and Synthetic US Dollar (sUSD)/3CRV.
The partnership allowed users to convert synths like sETH to ETH seamlessly and saw the value of the SNX token rise by more than 100% during the depths of the prolonged cryptocurrency bear market.
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