Why is Synthetix’s recent sluggish performance?

Let us compare and analyze Synthetix and  Mirror Protocol .

In the past thirty days, Synthetix executed 2,882 transactions, compared to Mirror Protocol’s 26,162 transactions in the past 24 hours alone (data sources stats.synthetix.io and mirrormarket.finance).

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Note: I think the transaction volume is a better evaluation indicator, because a small number of giant whales may have a great impact on the transaction volume, but the transaction volume may not accurately reflect the activities of ordinary users.

However, the Mirror Finance website does not specifically specify the “transaction type”, which means that the above transaction volume may not only include “transactions”, but may also include other on-chain activities such as governance voting. But even so, we can see that Mirror Protocol carries more transactions than Synthetix.

I previously pointed out on Twitter that even during the “DeFi Summer Boom” in 2020, Synthetix’s transaction volume is actually not as much (or even less) as people think. In other words, just as the entire decentralized financial industry is booming, Synthetix’s business showed a shrinking trend last year.

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This unexpected situation occurs, because the Ethernet Square  gas due to the high cost of it? The following figure shows the history of Ethereum gas price. If we compare and analyze, we will find that there is no obvious correlation between the two.

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Next, let’s compare the transaction volume indicators. In the past seven days-

  • Synthetix: US$122 million;
  • Mirror Protocol: US$312 million.

In terms of fee income, Systemax generated $543,000 in this period (I understand that the “current period” here refers to one week); for Mirror Protocol, since there is no data for the past seven days, it can only provide daily data , In the past 24 hours, revenue from this agreement was $177,000.

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The following is the lock-up volume indicator——

  • If measured in ETH, Synthetix’s lock-up volume has dropped by 33% compared to a year ago, and has dropped by 80% compared to its historical high.
  • If measured in U.S. dollars, Synthetix’s locked position is 1.2 billion U.S. dollars and Mirror Protocol is 1.8 billion U.S. dollars.

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One of the most striking indicators is the number of users-in the past 30 days, the average number of Synthetix daily traders is 63. This means that only 63 people in the world trade on Synthetix every day?

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I personally guess that the above user data is not complete, because many transactions designed for Synths may occur elsewhere (such as Curve), and these transactions do not call Synthetix smart contracts. But in any case, the number “63” is indeed a bit small.

I conclude that these data are not intended to create market panic, nor are they intended to oversing or oversing a particular token. Synthetix is ​​one of the first batch of projects launched in the DeFi market, and I sincerely hope that they can succeed. The most important thing now is to find the cause of the depressed performance of this DeFi protocol as soon as possible, and then find a way to solve the related problems. If the data in this article is inaccurate or there is any misunderstanding, please correct me.

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