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Synthetix Raises $12 Million as VC Confidence in DeFi Grows
Synthetix has successfully raised $12 million from major VC firms, including major names like Coinbase Ventures, Paradigm and IOSG.
Synthetix co-founder Jordan Momtazi, made the announcement via Twitter.
What makes this capital raise particularly interesting is that VCs didn’t directly send funds to Synthetix’s Australian founders. Instead, they made a purchase of the platform’s native token directly from the synthetixDAO treasury.
Who is Synthetix?
Synthetix is a decentralised derivatives platform that features the native SNX token, as well as its own stablecoin called sUSD.
The reincarnation of Australian crypto project Havven, they have since rebranded as Synthetix and launched a new suite of crypto-backed synthetic asset tokens.
Synthetic assets are financial instruments in the form of ERC-20 smart contracts known as “Synths” that track and provide the returns of another asset without requiring you to hold that asset.
Recent price action has been encouraging for the bulls, as the launch of the Synthetix Staking dApp has propelled price higher, breaking out of key resistance.
VC Interest a Double Edged Sword for DeFi Projects Like Synthetix
The current popularity surge in DeFi projects has not been lost on the VC industry. But with DeFi being decentralised in its very nature, skepticism around centralising a project around a set of private investors remains the concern of aspects of the community.
DeFi is supposed to be decentralised finance, featuring open and public protocols after all. For this reason, questions around centralised VC money coming in and having the ability to exert control, should therefore definitely be asked.
There is a Place for VC Money within DeFi
But in the case of this particular announcement, the significance of the $12 million raised is not so much the dollar value, but mainstream belief in both the Synthetix project and wider DeFi industry itself.
In the grand scheme of things, $12 million is barely a drop in the Synthetix pool. The synthetixDAO is currently pushing $3 billion USD in its treasury!
But what this announcement does show, is there is still an appetite for industry knowledge and connections, which only working with the right VCs can offer.
Money Continues to Enter the DeFi Space
While we don’t have a crystal ball to tell us the exact direction the DeFi industry is going to take over the next few years, the projects aligned with smart money are certainly going to be front and centre.
One thing for sure is that this won’t be the last piece of exciting news that we hear coming out of the Synthetix camp. If things continue on their current trajectory, the $2.8 billion USD locked in its treasury is just the beginning.
The future of finance is coming faster than we ever anticipated. It’s decentralised and permissionless, while running anywhere and everywhere 24/7.
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