Synthetix nets $20M from Web3 quant trading firm
Synthetix, a derivatives liquidity protocol, announces a new relationship with DWF Labs and a $20 million investment from the quantitative trading firm.
Synthetix, a tokenized asset issuance platform, has received a $20 million investment from Web3 investment and quantitative trading business DWF Labs.
In March 2023, the market-making and algorithmic trading firm paid $15 million in USD Coin for Synthetix’s native token, Synthetix Network Token. DWF Labs will be responsible for enhancing SNX token liquidity and market-making on centralised and decentralised exchanges.
As part of the agreement, Synthetix’s perpetual futures will be integrated into DWF Labs’ trading operation. DWF Labs has also pledged to purchasing an additional $5 million in SNX once the integration of Synthetix’s services is complete.
Synthetix allows users to tokenize a variety of real-world assets into Synths, which provide exposure to a variety of assets. Users can manufacture Synths by locking tokens into a smart contract and minting Synths against the relevant value while holding SNX.
Synthetix’s pooled collateral approach allows users to exchange Synths, with trades between Synths earning fees for SNX collateral suppliers.
On-chain synthetic asset generation tracks the value of real-world assets such as synthetic fiat currencies or commodities such as gold, as well as financial instruments such as equities indexes.
Andrei Grachev, managing partner of DWF Labs, emphasised the partnership’s offer of efficient trading techniques in the decentralised finance space:
According to Dune Analytics statistics, the v2 platform of Synthetix topped $400 million in daily perpetual swap transaction volume in March 2023.
In June 2022, the derivatives liquidity protocol witnessed an increase in daily fees following a collaboration with liquidity provider Curve Finance to develop Curve pools for Synthetic Ether (sETH)/Ether (ETH), Synthetic Bitcoin (sBTC)/Bitcoin (BTC), and Synthetic US dollar (sUSD)/3CRV.
At the depths of the lengthy cryptocurrency bear market, the partnership enabled users to seamlessly convert Synths like sETH to Ether, and the SNX token value increased by more than 100%.