Synapse Protocol
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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.
SYN Token

Liquidity incentivization

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).

Governance

To enable early adopters and future investors to have a say (and a stake) in the protocol's development, SYN is also the Synapse governance token. As such, it 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 monthly re-evaluation of the SYN emissions rate, and any changes to its supply cap.

Protocol fees

Protocol fees are split between the DAO treasury and buybacks of SYN. This enables the treasury to accumulate non-SYN assets, while also providing consistent demand to develop the price floor necessary for SYN emissions and supply to be altered in a controlled manner. Within the Synapse Network, SYN is used to pay for all fees on contract operations that are not broadcast to a destination chain.

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. Upon the protocol reaching its Archean and Proterozoic phases, they will be required to stake SYN in order to act as validators, and in return, a portion of protocol fees is returned to them. 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.

NRV snapshot and airdrop

As a result of community governance for what is now Synapse, but what was previously Nerve Finance, NRV holders as of the snapshot taken on 22/09/2021 will be credited with 2.5 SYN to their wallets for every NRV they were holding at that point either as NRV, staked as xNRV, or in a NRV-BUSD or NRB-BNB LP. Holders of unvested NRV will be credited with 2.5 unvested SYN, with all aspects of its vesting to be decided via community governance.
Last modified 25d ago