Aug 31, 2020 12:02 UTC
Aug 31, 2020 at 12:02 UTC
Further Than 95 Percent of the Net Value of Ethereum Protocol Synthetix’s Founder Is In SNX
In the old-style world of finance, risk management is a vital facet of any investor’s skillset. In crypto, it appears that investors throw risk management out the window, depending on how you see it. As polled numerous times by Bitcoin traders & others in the space, many on Crypto Twitter have locked up a widely held of their net wealth in digital tokens. Even executives in the space “suffer” from this mentality, with one lately revealing he has all of his net worth locked up in digital assets, in a single cryptocurrency no less.
Synthetix Founder Kain Warwick Elucidates His Crypto Portfolio
In a new discussion on Twitter, the founder of the Synthetix protocol, Kain Warwick, discussed how interesting it was to see the crypto exchange FTX/crypto fund Alameda Research put millions of dollars’ worth of capital towards an unaudited protocol called SushiSwap. Warwick noted that he wouldn’t put more than one percent of his capital at such a risky protocol, which could be drained of its funds at any moment by the admins or by hackers.
FTX’s CEO, Sam Bankman-Fried, fired back (in a friendly way) by asking how much of Warwick’s net worth is locked up in the native Ethereum-based token of Synthetix, the Synthetix Network Token (SNX). The cryptocurrency pioneer remarked that currently “>95%” of his net worth is in SNX, though he noted that it’s hard for him to realistically diversify those funds because he is “escrowed as a core contributor & escrowed via staking rewards for at least another year.” Though the exact sum of SNX he owns is uncertain, ICODrops reports that the squad of Synthetix will eventually have access to 20 percent of all coins in circulation. This, in itself, is valued for hundreds of millions of dollars.
What’s Next For SNX?
Even though SNX has by now seen a parabolic rally over the previous few months, the coin may have further to rally. In a recent podcast with Jason Choi of The Spartan Group, a crypto venture & hedge fund, Warwick distinguished that Synthetix’s second-layer scaling solution” is a “matter of months” away.
At present, the Synthetix exchange, which is at the central core of the entire protocol, suffers from the drawbacks of the layer-one Ethereum blockchain. For example, the gas cost presently is 300 Gwei, which is close to an all-time high, & the time for transactions to sensibly go through takes around 15-seconds to one minute.
This means that Synthetix can’t reasonably reach parity with centralized exchanges. However, with the planned layer-two upgrade, Synthetix may begin to resemble the incumbents, driving demand for SNX & giving the cryptocurrency the capability to accrue value in the longer run.