Web3 quant trading business gives Synthetix $20M

Synthetix, a platform for tokenized asset issuance, has obtained a $20 million investment via a new relationship with Web3 investing and quantitative trading business DWF Labs.

In March 2023, the market-making and algorithmic trading businesses purchased $15 million worth of Synthetix’s native token, SNX, using USD Coin (USDC).

DWF Labs will be responsible for enhancing SNX token liquidity and market-making on both controlled and decentralized exchanges.

As part of the agreement, Synthetix’s perpetual futures will be included in DWF Laboratories’ trading operation. DWF Labs has also pledged to purchase an additional $5 million worth of SNX tokens upon the completion of the integration of Synthetix’s services.

Synthetix enables users to tokenize several real-world assets as Synths, which give exposure to a variety of assets. By locking SNX tokens inside a smart contract and minting Synths against the correct value, holders of SNX tokens may produce Synths.

Using Synthetix’s pooled collateral concept, users may trade synths, with exchanges between synths earning fees for SNX collateral providers.

The development of on-chain synthetic assets mirrors the value of real-world assets, such as synthetic fiat currencies or commodities like gold, as well as financial instruments such as stock indexes.

DWF Labs managing partner Andrei Grachev noted the partnership’s offering of optimized decentralized finance (DeFi) trading mechanisms:

“By leveraging Synthetix’s deep liquidity and composability, platforms can now deliver better trades with lower slippage, allowing for innovative hedging strategies and unique use cases.”

In March 2023, Synthetix’s V2 platform topped $400 million in daily transaction volume for perpetual swaps, according to statistics from Dune Analytics.

Daily costs for the derivatives liquidity protocol increased in June 2022 as a result of a cooperation with liquidity provider Curve Finance to develop curve pools for synthetic Ether (sETH)/Ethereum (ETH), synthetic Bitcoin (sBTC)/Bitcoin (BTC), and synthetic U.S. dollar (sUSD)/3CRV.

At the depths of the protracted cryptocurrency bear market, the alliance enabled users to convert synthetic currencies such as sETH to ETH without difficulty, and  SNX token’s value increased by almost 100 percent.