Kain Warwick’s Vision for Synthetix Staking

Kain Warwick, founder of Synthetix, claims SNX staking is broken. He proposes a leveraged, no-liquidation staking model to absorb debt and enhance yield through the new 420 Pool. This staking model enables SNX holders to stake their tokens while allowing the protocol to manage debt and pursue yield opportunities.

At launch, the primary yield source will be minting sUSDe via Ethena, with plans for future integrations. Warwick notes that Synthetix’s previous model faced scaling issues, making this evolution necessary.

A radical aspect of the plan is the debt jubilee, forgiving historical sUSD debt over a period of 12 months. Stakeholders holding debt have the option to deposit into 420 Pool, where the protocol will absorb their debt. This could encourage SNX staking participation as users, previously deterred by complex debt management, gain a “clean slate” for staking.

420 Pool could either represent a significant evolution or yet another over-engineered Synthetix experiment. The key assumption is that the market desires leveraged yield without liquidation risks. If Synthetix succeeds, this could become the most sophisticated DeFi staking product yet; if not, it may simply add to SNX’s history of redesigns.

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