Quarterly Report for Synthetix, Quarter 2 of 2025: April — June.
Q2 Highlights
⭐ Spartan Council/CCs: Synthetix Relaunch, 420 Pool Adoption
The previous few months have been a pivotal interval for Synthetix, marked by a give attention to ecosystem alignment and key shifts within the core product roadmap. From the profitable growth of the 420 Pool to the upcoming launch of a reimagined perps product on Ethereum Mainnet, the protocol management has outlined a complete proposal to streamline product supply and entice new customers. As Synthetix sharpens its give attention to Mainnet consolidation and prepares for a brand new period of decentralized derivatives, let’s assessment a number of the technical highlights for the protocol in Q2.
Whereas earlier growth efforts have typically been centered round scaling options like Base and Optimism, the Spartan Council has signaled that Mainnet will function the anchor for Synthetix’s core merchandise shifting ahead. This pivot displays a strategic need to simplify the protocol’s footprint, cut back liquidity fragmentation throughout chains, and align with Ethereum’s sturdy safety and liquidity base. With the deliberate growth of a brand new perps market on Mainnet and plans to consolidate staking and governance performance round this ecosystem, Synthetix is reasserting its dedication to constructing a streamlined, capital-efficient protocol that leverages Ethereum’s safety, liquidity, and credibility.
Make no mistake – this can be a race. The protocol hopes to seize first mover’s benefit, and the market share that comes with it as the only real perps providing on L1. Success is dependent upon exact timing, clean consumer onboarding, dependable execution, and, most critically, an actual demonstration of high-volume merchants being prepared to undertake and make the most of the product, leaving the consolation of excessive efficiency DEXs and centralized exchanges.
In the meantime, momentum across the 420 Pool has continued to construct following its debut final quarter. With the introduction of Easy Staking, much more SNX migrated to the 420 Pool, because the streamlined interface and lowered complexity made it simpler for customers (even these much less conversant in DeFi) to take part in staking and earn rewards with out actively managing their debt. As of late June, over 170 million SNX had been migrated, accounting for roughly half of the overall provide, and cementing the 420 Pool because the dominant staking mechanism throughout the Synthetix ecosystem. The elevated participation has improved capital consolidation, enhanced system-wide debt effectivity, and allowed governance to function with clearer insights into collateral allocation.
Challenges
Essentially the most vital growth of the previous few months has been the winding down of all Synthetix L2 merchandise and subsequent refocusing round a brand new product being constructed on Ethereum Mainnet. Because the protocol pivots again to L1, it faces the logistical complexity of sunsetting legacy methods, coordinating incentives throughout a number of chains, and maintaining customers knowledgeable throughout a interval of serious transition.
Sustaining sUSD peg stability has additionally been a persistent problem over the previous a number of months. The shift to centrally managed staking was designed, partially, to shore up peg stability by enabling a unified method to debt deployment. Nonetheless, the rollout of the debt jubilee launched extra sUSD provide, creating vital value stress on sUSD. This imbalance was compounded by liquidity fragmentation throughout chains and the winding down of L2 deployments, which made it even more durable to handle sUSD provide and demand successfully. Because the protocol continues to develop, preserving sUSD’s reliability as a unit of account might be vital to sustaining belief and utility throughout its ecosystem.
Complicating issues additional, the phrases of the debt jubilee have shifted a number of occasions since its introduction. Initially framed as a transparent 12-month path to full forgiveness, eligibility necessities have since modified: first requiring customers to deposit 10% of their debt in sUSD, then 20%, with no assure that additional changes received’t be made. Whereas the up to date mannequin nonetheless gives vital worth, successfully 80% forgiveness below the unique lock-up phrases, it has deviated from early expectations. These adjustments mirror the technical and financial realities of peg upkeep, however underscore the significance of secure, clear, and well-communicated incentive constructions.
Lastly, neighborhood participation has additionally continued to say no to some extent. Fewer candidates have stepped ahead for council elections, SIP shows have slowed, and neighborhood updates have been lowered to month-to-month calls. This decline in exercise stands in stark distinction to the once-vibrant governance ecosystem that Synthetix helped pioneer. Reinvigorating contributor curiosity and reestablishing predictable, accessible channels for engagement might be important to reactivating the DAO and guaranteeing significant neighborhood involvement because the protocol enters its subsequent part.
Protocol Stats
Overview of Synthetix Q2 Stats: April 2025 — June 2025.
Spartan Council
Q2 2025 Spartan Councilors: Benjamin Celermajer (Fenway), Brent Maxwell, Cavalier, coKaiynne, Jordan Momtazi, Kain Warwick, MasterMojo
Now that we’ve mentioned highlights and challenges Q2, let’s get right into a extra in-depth assessment of the main accomplishments from the protocol and Spartan Council.
Massive information kicked off the quarter: Synthetix Accounts went dwell! This new sensible pockets was tailored for on-chain perps merchants. It introduced gasless, 1-click buying and selling to over 100 markets, whereas simplifying onboarding with an electronic mail, Google account, or passkey logins — no seed phrases wanted.
Synthetix Accounts featured:
Self-custody with exportable keysFast margin deposits (USDC, ETH, cbBTC, cbETH)On the spot entry to buying and selling with out pockets popups or multi-step signingMulti-device help for versatile buying and selling
Synthetix Alternate was quietly cooking, and the outcome was a UX leap ahead that made DeFi buying and selling really feel like Web2.
Following that main usability win, Synthetix then turned its consideration to staking, and two massive updates dropped. sUSD staking went dwell within the 420 Pool, and eligible stakers (these additionally staking SNX) started incomes a share of 5M SNX in rewards over 12 months, or 13,698 SNX each day. Deposits had been locked for 1 yr, with rewards set to vest over 3 months post-campaign.
Subsequent, SNX staking was additionally radically simplified. Launched on Ethereum Mainnet, SNX holders are actually in a position to stake straight into the 420 Pool with no debt, no C-ratios, and no liquidations. Withdrawals require a 7-day cooldown, and rewards are set to vest at marketing campaign finish in Could 2026.
Each swimming pools had been made obtainable at 420.synthetix.io. Early participation was sturdy, and over half the SNX provide ended up staked! With this new mannequin in place, nevertheless, it was time to part out the outdated one. Legacy SNX staking positions had been deprecated, per SCCP-403, so:
If a consumer’s C-ratio was below 160%, their place was liquidated and unrecoverable.If it was 160% or above, they may get better through the Synthetix Discord ticket system.
This transfer enabled the protocol to streamline towards automated vaults, V4, and a greater UX for stakers.
However upgrading staking wasn’t sufficient, as a result of the protocol additionally needed to take care of the results of the debt jubilee. Following the SIP-420 debt jubilee and delegated staking improve, sUSD skilled heavy promote stress, falling to ~$0.70.
With the intention to restore the peg, SNX debt holders had been required to stake 20% of their unique debt as sUSD within the 420 Pool. This technique (alongside Treasury buybacks, Curve incentives, and Infinex campaigns) has helped repeg sUSD a bit, however reaching $1.00 has remained a bit difficult, therefore the rise to twenty%.
The hassle to revive the peg continues to be a precedence for Synthetix, so as to put the protocol in a greater place to pursue yield technology through the 420 Pool and a brand new Synthetix Perps product on Mainnet.
Regardless of peg points, protocol governance carried on and governance elections wrapped up with the next Spartans taking elected seats on the brand new council:
Advisory Seats: Kain, Jordan, MasterMojoTreasury Seat: cokaiynne
As governance stabilized, neighborhood engagement ramped up a bit as Spartan Areas had been extra formally rebooted. Some highlights featured Pirate Chain, a privacy-first L1, discussing privateness and censorship resistance in DeFi, and Panoptic, a DeFi-native choices buying and selling utilizing Uniswap V3.
However behind the scenes, larger strategic selections had been on the desk. SIP-415, the proposal to accumulate Derive (previously Lyra), was offered after which withdrawn after neighborhood suggestions. Whereas the transfer might’ve fast-tracked the V4 timeline and added an off-chain matching engine for L1 perps, considerations about valuation and token dilution led to its cancellation. The proposal supplied a $27M valuation that might have been settled through a 29.3M new SNX mint, however neighborhood consensus remained a core pillar for Synthetix as voices had been heard in opposition.
Shortly after this, nevertheless, the imaginative and prescient for V4 on Mainnet took middle stage as Synthetix introduced a soon-to-be native perps change on Ethereum Mainnet, full with:
Off-chain matching engineBatch on-chain settlementPoints program to incentivize utilization
Section 0 kicked off with sUSD/sUSDe early deposit vaults, the place merchants, stakers, and referrers started incomes factors. This system can even be evolving over time, with extra alternatives to earn factors and be a part of competitions with juicy prizes in SNX, stablecoins, and extra.
However, this isn’t simply one other “model” replace – Synthetix Mainnet will mark a full pivot. L1 is the longer term.🚀 To finish the shift, the protocol started retiring its L2 deployments.
Synthetix started sunsetting all L2s besides Optimism (for now):
Arbitrum: Absolutely deprecated; vaults liquidated. Debt compensation and collateral claims had been dealt with through Discord.Base:June 30: Perps entered close-only mode; leverage tokens turned redeem-onlyJuly 7: Full deprecation accomplished; LP vaults liquidated
Synthetix is coming again residence to Mainnet, and Spartans are making the transfer. Soonthetix! 🔜
Finest Memes from Q2
Lastly, as a result of we are able to’t shut out the quarter and not using a little humor, right here had been a number of the finest memes from the Synthetix neighborhood.
