July 24, 2024
Latest News

Synthetix raises $12 million from leading Venture Capitalists

Synthetix raises $12 million from leading Venture Capitalists

The DeFi project famous for synthetic assets, Synthetix, declared that it has raised $12 million from Coinbase Ventures, Paradigm, and IOSG. The three venture capital firms funded by purchasing SNX tokens worth $12 million from SynthetixDAO’s treasury. The funds will be employed as collateral to offer liquidity and engage in the Synthetix platform’s governance. The most recent funding implies growth efforts by onboarding relevant liquidity allies in the Synthetix ecosystem. Moreover, all the three VCs that participated in the $12 million raise introduce added value to the organization that an individual investor might not be able to assemble. 

Earlier, Synthetix founder Kain Warwick advocated that SynthetixDAO exceeded $1 billion in treasury holdings. It now gains more monthly fees than it spends. It indicates that the project is cash-flow positive on protocol fees alone, and there is no shortage of funds. SNX token sales as a kind of funding is not a recent phenomenon. Framework Ventures bought 5 million Synthetix (SNX) tokens in 2019 from the project’s treasury to engage in the protocol.

Role of Venture Capitalists in DeFi Space

The contribution of venture capitalists on board has become debatable among the decentralized finance space. The discussion is that providing a preferred approach to VC firms in token sales may go against the ethics of community-driven DeFi. Others state that VCs can perform a massive role in supporting projects by expanding their vast resources. According to the founder of popular DEX Uniswap, Hayden Adams, VCs could be a blessing for DeFi projects. They must supplement value rather than just being passive investors.

Moreover, a lead contributor to SynthetixDAO, Jordan Momtazi, confirmed this idea by elucidating that the new VC firms further recruit talent and expand Synthetix protocol into new regions. The onboarding of new associates also occurs when Synthetix plans to introduce the long-awaited V3 update, which will enable layer-2 scaling. In the meantime, new synthetic assets proceed to be originated for trading on the platform. The sTSLA (synthetic Tesla stock) being the latest to be approved by the Spartan Council. The investment from leading VCs drives during an incredibly productive period for Synthetix.

Follow BitcoinWorld for the latest updates.