Synthetix (SNX) Q4 2024 Performance: A Mixed Bag Of Growth And Challenges

Ronaldo Marquez

3 months ago

3 mins read

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Synthetix (SNX) has made headlines for its performance during the fourth quarter (Q4) of 2024. A recent report from Messari sheds light on the platform’s metrics, particularly its perpetual futures trading, which has seen fluctuating volumes and user engagement.

Synthetix Users Flock To Niche Markets Beyond BTC And ETH

Synthetix, a decentralized finance (DeFi) protocol that allows users to trade and mint synthetic assets, reported a 29% increase in daily average perpetual futures volume from the previous quarter, climbing from $55.7 million in Q3 to $71.7 million in Q4.

However, this figure represents a 50% decline year-over-year, falling from $143.2 million in Q4 2023. The decline in yearly volume highlights the challenges faced by the platform despite recent gains.

Adoption of the newer Synthetix V3 perpetuals has slowed, with volumes decreasing by 38% quarter-over-quarter (QoQ). In Q4, Synthetix’s perpetual trading accounted for approximately 0.9% of the total on-chain perpetual volume, which stood at a staggering $740.5 billion.

A notable trend during this quarter was the shift in user preference towards trading on the Solana (SOL) network. SOL’s perpetual volume surged by 53% QoQ, ending the quarter at $2.5 billion.

In contrast, Bitcoin (BTC) had previously edged out SOL as the top market but was outperformed by SOL this quarter by a margin of 13%. Additionally, other niche perpetual markets saw a 74% increase, indicating a broader interest in alternatives to BTC and ETH.

Average Daily Active Users Increase, Yearly Metrics Decline

Despite the challenges, engagement metrics showed some positive signs. The average number of daily trades increased by 25% QoQ, rising from 1,400 to 1,700. This growth was largely driven by Synthetix V2, which experienced a 59% increase in trading activity.

Average daily active users (DAUs) also grew by 14% QoQ, increasing from 207 to 236. However, this figure reflects a 47% decline compared to the previous year.

Total Value Locked (TVL) in Synthetix remained relatively stable, with only a 1% increase QoQ, peaking at just over $600 million before closing at $378.9 million.

Open Interest (OI), representing the total value of active, unsettled contracts, saw a shift. By the end of Q4, OI was $67.5 million, down 60% QoQ from $166.7 million.

However, OI reached an all-time high of $376.1 million in November, driven by heightened market volatility surrounding the US presidential election. Following the election, a rally in crypto markets accompanied an increase in traders’ risk appetite, contributing to the rise in OI.

Interestingly, SOL had the highest average open interest for the first time this quarter, averaging $84.9 million, up 115% QoQ. BTC followed with $77.6 million, while ETH’s OI fell for the second consecutive quarter. This shift indicates a growing preference for SOL over BTC and ETH.

Synthetix’s financial performance also reflected the activity in the perpetual markets. Perpetual exchange and liquidation fees on the OP Mainnet totaled $2.8 million, marking a 64% increase QoQ.

The platform generated the highest exchange fees from the SOL perpetual market, totaling $988,900, a 52% increase from the previous quarter. This trend underscores the growing popularity and trading volume of SOL.

At the time of writing, the platform’s native token, SNX, is trading at $0.900, reflecting a 17% increase in price over the past two weeks.

Featured image from DALL-E, chart from TradingView.com

Ronaldo Marquez

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