Synthetix perps V2 has performed well during its initial rollout. Moving forward, open interest caps are about to be raised, markets added, and fees lowered. Synthetix will now utilize the remainder of its massive OP allocation to acquire more users.
Synthetix is in a very attractive position with it’s OP allocation. Synthetix was allocated 9M OP, joint highest along with Perp Protocol. Many other projects in the Optimism ecosystem have already distributed their OP allocation. OP is now trading at $2.65, nearly one year after the token launch. Due to positive recent price action, the incentive program is much more valuable to users in dollar terms, and will not be overshadowed by other projects’ incentives.
Kwenta, the leading frontend for Synthetix perps, will be using its OP allocation in tandem with Synthetix. This will give a 10% boost to users trading perps on Kwenta vs other venues, helping to solidify themselves as the leader.
Full details of the incentive program can be found on this community call.
Synthetix: 50K OP per week, quickly ramping up to 300K OP per week, for 20 weeks.
Kwenta: 30K OP per week for 20 weeks.
Total: 330K OP per week for 20 weeks will be distributed to perps traders on Kwenta . At current prices, this equates to ~$125K in OP rewards per day.
In addition, traders on Kwenta earn trading rewards in the form of escrowed KWENTA. These rewards are a function of fees paid, but total weekly rewards are typically around 500 KWENTA (~$350K) per week.
SNX stakers will be the primary beneficiaries of this program, as they benefit from 100% of platform fees. Kwenta does not currently earn any fees from trades, but will soon benefit from revenue sharing. Kwenta will also have organic sources of revenue from upcoming products such as Smart Margin.
Synthetix perps will be heavily incentivized for nearly half a year. The next six months will be crucial for Synthetix and its ecosystem to convert new users into loyal traders. Synthetix perps’ 2/6 bp fees are competitive with CEXs, and the delta neutral pricing mechanism is performing well so far. A successful incentive program could help propel Synthetix to the top of the decentralized perps landscape.