Synthetix to Cease Arbitrum Assistance in Favor of Original version
In a strategic move aimed at enhancing its capabilities in decentralized derivatives, Synthetix is phasing out its perpetual futures (Perps) on Arbitrum and redirecting development and resources towards launching and enhancing version 3 (V3) of its protocol on Base.
The key reasons for this shift include resource optimization and a strategic infrastructure choice. By transitioning to Base, Synthetix seeks to focus on building a more advanced and unified derivatives protocol, allowing the team to concentrate efforts on the latest platform iteration (V3) designed to offer improved performance and scalability.
Base, developed by Coinbase, offers promising Ethereum Layer-2 features that align closely with Synthetix’s goals, such as robust security guarantees, user experience, and ecosystem potential, making it a preferred environment for the next phase of their protocol.
Comparatively, Arbitrum, developed by Offchain Labs, offers a different set of features. While both platforms employ optimistic rollups, Base focuses on Ethereum's security model, whereas Arbitrum offers some variants like Orbit chains. Arbitrum also has a broader multi-chain expansion with multiple chains using Arbitrum tech, offering flexible execution environments. In contrast, Base has a strong Coinbase integration, with a high focus on user onboarding and DeFi growth.
Regarding fees, Base is expected to have competitive low fees, benefitting from Coinbase-backed development, while Arbitrum has a 10% chain revenue share model for some chains settling outside Arbitrum One, plus various ordering mechanisms impacting costs.
As Synthetix moves forward with its pivot towards vertical integration in its product strategy, affected markets on Arbitrum will be in a "close-only" mode, preventing new positions or increases. The decision also includes the planned discontinuation of support for USDx on Arbitrum.
Base's total value locked (TVL) currently exceeds that of Arbitrum. It is built on the OP Stack architecture from Optimism.
[1] "Synthetix to Focus on Base Layer-2 Solution for Derivatives Expansion" - CoinDesk, [link to the article] [2] "Synthetix Phases Out Perpetual Futures on Arbitrum, Focuses on Base" - Decrypt, [link to the article]
- Synthetix is redirecting development and resources towards launching and enhancing version 3 (V3) of its protocol on Base, a Layer-2 solution developed by Coinbase, given that Base offers features alignment with Synthetix's goals, such as robust security guarantees, user experience, and DeFi growth.
- With Base's total value locked (TVL) currently exceeding that of Arbitrum and promising competitive low fees, Synthetix views Base as a preferred environment for the next phase of their DeFi protocol, aiming to build a more advanced and unified derivatives protocol that focuses on offering improved performance and scalability.
