Synthetix liquidates token holders in its very first round suggesting that the DeFi boom is hitting the bottom as we can see in today’s altcoin news today.
SCCP25 reduced the liquidation delay from two weeks to three days. the recent crash in the Defi space liquidated several SNX stakers while the sector has since then rebounded, suggesting the bottom is in. The recent downturn in the Defi space caused the price of a lot of DeFi tokens to fall sharply like the Synthetix Network Token. The token was trading at $7.5 at the start of September before crashing to $2.5 this week. This equates to an over 66% price decline in two months leading to Synthetix liquidates massively on the platform.
Recently the very first liquidations on some SNX stakers have been carried out successfully. If you are at risk of liquidation, with a Collateralisation Ratio that has dipped below 200%, there is a red banner alert at the top of the screen on Mintr. 1/
— Synthetix ⚔️ (@synthetix_io) November 6, 2020
The new liquidation mechanism went live on the mainnet back in June but with the new SCCP-25 implementation, SNX stakers will have to pay close attention as the liquidation delay dropped from two weeks to three days. If the stakers’ Collateral Ration falls below 200%, then they will have three days to fix their C-Ration before they get liquidated. In this case, the staker will have two ways to fix their C-Ratio. One is by adding more SNX or by burning some of their sUSD until the target collateralization ratio is achieved.
SNX stakers earn two kinds of rewards. They receive SNX staking rewards as well as a portion of the fees that are generated by the trading of synths on the protocol. The liquidation procedure went off without any issues but the bigger narrative is that of DEFi’s fall from summer highs. SNX is now trading at $3.23 but other tokens in the same category like REN, BNT, and AAve rebounded by 15%, 9% and 25%. These strong bounces will suggest that the bottom is in. now that BTC is picking up steam, the fallen DeFi sector could be the first to enjoy the benefits of the incoming altseason.
As recently reported, The Synthetix founder fully explained that having lived through two previous crypto cycles, his opinion is that the industry’s current situation is analogous to 2016, which was “the calm before the 2017 storm,” so to say. The Synthetix founder Kain Warwick also mentioned how builders in the ecosystem must acknowledge that the decisions they make affect the rest of the DeFi ecosystem, meaning that there needs to be a concentrated effort amongst all teams to work together and create better products.
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