Decentralized Finance (DeFi) Protocol Synthetix Expands Collateral Options for Leveraged Perpetuals Trading on Coinbase’s Base Network
Synthetix, a prominent decentralized finance (DeFi) protocol, has taken a significant step forward in its ongoing revamp by announcing the acceptance of multiple token types as collateral for leveraged perpetuals trading on Coinbase’s Base network. This development was made public on December 18 and marks another milestone in the protocol’s efforts to improve user experience and expand its offerings.
Multicollateral Perps on Base Network
The introduction of multicollateral perps (MCP) on the Base network is a significant enhancement to Synthetix’s trading infrastructure. As part of this update, users will be able to post tokens such as Coinbase Wrapped BTC (cbBTC) and Coinbase Wrapped ETH (cbETH) as collateral for trading. This expansion offers several benefits, including:
- Direct Exposure to Popular Crypto Assets: Users can maintain direct exposure to popular crypto assets like Bitcoin and staked Ethereum.
- Increased Control over Margin Positions: MCP allows users to have more control over their margin positions, enabling them to make informed decisions about their trades.
- Easier Access to Hedging: The multicollateral perps feature provides easier access to hedging opportunities, which can help mitigate potential losses.
Coinbase’s cbBTC and cbETH
Coinbase’s cbBTC has emerged as one of the most popular Bitcoin wrappers, with a market capitalization exceeding $2 billion as of December 18. This popularity underscores the growing demand for wrapped tokens and their increasing importance in the crypto ecosystem.
Base Network: A Leading Layer 2 (L2) Scaling Solution
The Base network is a leading L2 scaling solution, with around $14 billion in total value locked (TVL). According to L2Beat, it is the second most popular Ethereum L2 after Arbitrum. This popularity stems from its ability to provide high-performance and cost-effective solutions for decentralized applications.
Synthetix Exchange: A New Flagship Product
In a related development, Synthetix has launched its own perpetuals exchange application, Synthetix Exchange. This new product will enable users to trade derivatives directly on the platform, without relying on external exchanges.
Perpetual futures, or "perps," are derivatives that allow traders to buy or sell an asset at a future date with no expiration. The introduction of this feature is expected to enhance user experience and provide more opportunities for traders.
Ongoing Revamp: Governance Shake-up and Strategic Initiatives
The introduction of multicollateral perps on the Base network and the launch of Synthetix Exchange are part of the protocol’s ongoing revamp. This effort began after a governance shake-up in October, which saw token holders vote overwhelmingly in favor of a proposed governance overhaul.
Key Takeaways:
- Synthetix Expands Collateral Options: The protocol has begun accepting multiple token types as collateral for leveraged perpetuals trading on Coinbase’s Base network.
- Multicollateral Perps Offer Several Benefits: Users can maintain direct exposure to popular crypto assets, have increased control over margin positions, and access hedging opportunities more easily.
- Synthetix Exchange: A New Flagship Product: The protocol has launched its own perpetuals exchange application, offering users a new platform for trading derivatives directly.
The ongoing revamp of Synthetix is expected to bring significant improvements to the DeFi ecosystem. With the introduction of multicollateral perps on the Base network and the launch of Synthetix Exchange, users can expect enhanced user experience, increased control over their trades, and more opportunities for hedging.
As the DeFi landscape continues to evolve, it is essential to stay informed about the latest developments in this rapidly changing space. By understanding these advancements, users can make more informed decisions about their investments and trading strategies.