SYN Token
The governance and utility token for Synapse.

Why SYN?

Synapse forms the nervous system for all interchain activities across blockchains - an incredibly fast-changing environment shaped by dynamic technology. The utility token for such a protocol must be similarly dynamic. Despite it now being over a year since Synthetix and Compound revolutionized DeFi community-building and established best practices for protocol growth through their liquidity mining incentive programs, few protocols have seen fit to experiment with the parameters of that incentivization in a systematic way. Synapse does not make this mistake.
It is well established that protocols overpay for liquidity for their native tokens - and, we posit, for most of the liquidity locked within their smart contracts. This has pernicious effects, leading to mercenary capital, particularly early in a project's life-cycle when emissions are the most rapid. This runs counter to the long-term intent of such liquidity mining programs, which is to bootstrap a community of early adopters that are aligned with the continued growth of the protocol.
This overpayment is in part because liquidity for such tokens is often desired in excess of the actual need for it, but a much larger factor is that protocols do not a) allow themselves flexibility when setting incentivization rates or liquidity targets or b) manage such parameters as actively as they can. Utility tokens for infrastructure protocols are not ultrasound money - they are community-bootstrapping devices that must be capable of altering supply and emissions to the needs of that community as it naturally progresses through stages of growth.
Enter SYN

Governance

To enable early adopters and future investors to have a say (and a stake) in the protocol's development, SYN is also the governance token of Synapse Protocol.
Any SYN tokenholder, which has more than 50k tokens, can submit a snapshot proposal to the Synapse DAO.
As such, SYN is used to garner community consent for protocol-level changes to smart contracts, as well as for actions expensed from the DAO treasury. This includes the frequent re-evaluation of the SYN emissions rate, and if ever necessary, changes to its supply cap.

Protocol fees

Protocol fees are split between liquidity providers and the DAO treasury, from where they can be directed for actions supporting SYN via community governance.
This enables the treasury to accumulate non-SYN assets (primarly stables), while also allowing the protocol to provide demand when necessary to develop the price floor required for SYN emissions and supply to be flexibly controlled.

Validator Economics

Liquidity providers are not the only integral protocol adopters that must be incentivized to benefit the protocol - validators execute the most critical function of all by securing the network. In addition, in order to help validators operate within the Synapse network, SYN may be used as a subsidy to compensate validators for gas expended on Ethereum.

Synapse Chain

Upon the protocol reaching its Archean and Proterozoic phases and the Synapse Chain being launched, validators will be required to stake SYN, and validators will earn network fees.
As the Synapse Chain will be secured by Proof of Stake consensus, anybody will be able to contribute to the security of the chain by delegating SYN to validators (and earn a portion of block rewards).
As the native token of the Synapse Chain, SYN may also be used to pay for transactions within the network as well as for bridging to other chains.

Incentivizing Liquidity Providers on the Bridge (Stables & ETH)

One of SYN's primary functions is to incentivize liquidity providers to entrust their funds to the protocol's smart contracts and join the community in facilitating its long-term growth. To this end, SYN is emitted every block to all Synapse nUSD and nETH pools. The rate at which it is emitted is set every month as a result of discussion between the core protocol developers and the community, and an ensuing governance vote (if needed).
In November 2021, the Synapse DAO voted for a significant cut to SYN emissions and subsequent cuts have followed, in accordance with the mandate granted by the DAO.

Providing Liquidity to SYN

Synapse holders can provide liquidity to SYN on Sushiswap. This is incentivized with SYN emissions or SUSHI emissions.
Additionally, third party DEXes have also listed SYN on their platform and incentivize holders to provide liquidity, in order to capture a share of SYN trading volume. This was historically the case of Trader Joe on Avalanche (SYN/AVAX) and is still the case of Solidly on Fantom (SYN/USDC and SYN/FTM) and IDEX on Polygon (SYN/ETH). Any DEX can list and create incentives for SYN, without permission of Synapse Protocol (DYOR).
Additionally, Synapse used on 23-Feb-2022 its voting power on Solidly to incentivize a SYN/USDC pool.

Supply

The SYN token has a max supply of 250,000,000.
Circulating supply increases through emissions of SYN to liquidity providers
  • Current SYN emissions are around 262k per week (down over to 75% since the launch of Synapse in September 2021)

Distribution of SYN Upon Launch of Synapse Protocol

As a result of community governance, Synapse came into its current form through an airdrop to NRV holder: NRV holders when the snapshot taken on 22-Sep-2021 were awarded 2.5 SYN for every NRV they were holding at that point either as NRV, staked as xNRV, or in a NRV-BUSD or NRB-BNB LP.
This means that upon the launch of Synapse Protocol, all holders of SYN were existing holders of NRV.
Additionally, holders of unvested NRV received 2.5 unvested SYN. How to deal with the unvested SYN is to be determined by the Synapse DAO through future governance initiatives.
One proposal to distribute unvested SYN to former Nerve liquidity providers (rejected, 98%): - https://snapshot.org/#/synapseprotocol.eth/proposal/0xd0e3233f05a0095fe4c49ea7167bbe19a1013b2651ad8a7bb7780578ccced42c

Current distribution of SYN