The decentralized finance (DeFi) protocol Synthetix has announced a major strategic pivot, setting a July 7 target to phase out all of its Layer-2 deployments on the Base network. The derivatives protocol stated it will now consolidate its focus on the Ethereum mainnet, a surprising move that goes against the broader industry trend of L2 expansion.
The decision comes after the project’s native token, SNX, has suffered from significant bearish pressure and a lack of liquidity for several months.
Why the Protocol Is Refocusing on Ethereum Mainnet
According to Synthetix, the decision to phase out its L2 deployments stems from ongoing infrastructure instability and fragmented liquidity. Meanwhile, the liquidity provider (LP) vaults have stopped accepting deposits because of the latest decision.
Related: sUSD Crashes Below $0.77: Synthetix Faces Challenges After Major Protocol Changes
All existing Synthetix products on the Base network, including perpetual futures and LP vaults, will be fully deprecated by the July 7, 2025, deadline. The project confirmed, however, that it will maintain its support for the Optimism L2 network.
New Strategy Includes Stablecoin Vaults and Incentives
As part of its renewed focus on the Ethereum mainnet, Synthetix clarified that it would shift its focus to the Ethereum mainnet and highlighted plans to launch early deposit vaults for its stablecoins, sUSD and sUSDe.
Meanwhile, it would also introduce point-based incentive programs for participants while maintaining support for the Optimism L2 network. In the meantime, the blockchain solution is developing tools that would help sUSD holders migrate their assets to the Ethereum mainnet.
Move Comes After an 83% Price Crash for the SNX Token
The Synthetix native cryptocurrency, SNX, has suffered significant bearish pressure and a lack of liquidity for several months. SNX tumbled over 83% following its last notable rally in December 2024. Since then, the cryptocurrency has dropped from $3.67 to trade for $0.6128, per TradingView’s data.
Related: Synthetix Founder: Meme Coin Craze Echoes ICO Bubble, But There’s a Twist
The planned restructuring by the blockchain project’s team could kick-start a revolution for its native coin. However, users may wait for actualization and how it would affect the blockchain token’s demand and the effect on SNX’s value.
Synthetix is a derivatives protocol that provides liquidity for permissionless derivatives like perpetual futures, options, and parimutuel markets across EVM chains.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
Read the full article here
