Synthetix Announces $12 Million Funding From Top VCs

Key Takeaways

  • Synthetix said top VC firms Paradigm, Coinbase Ventures, and IOSG invested in the project.
  • The three firms purchased $12 million worth of SNX tokens from synthetixDAO’s treasury.
  • The latest funding indicates growth efforts by onboarding liquidity partners who can also act as valuable ecosystem members.

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Synthetix, a DeFi project for synthetic assets, announced that it raised $12 million from Paradigm, Coinbase Ventures, and IOSG. 

VCs Enter DeFi Governance

The three venture capital firms invested by purchasing SNX tokens worth $12 million from SynthetixDAO’s treasury. 

The funds will be used as collateral to provide liquidity as well as to participate in the Synthetix platform’s governance.

The latest funding indicates growth efforts by onboarding valuable liquidity partners in the Synthetix ecosystem.

Previously, Synthetix founder Kain Warwick reported that synthetixDAO surpassed $1 billion in treasury holdings and now earns more monthly fees (~750k USD) than it spends. 

This means that the project is cash-flow positive on protocol fees alone and there is no shortage of funds.

SNX token sales as a form of funding are not a recent phenomenon. Framework Ventures purchased 5 million Synth (SNX) tokens in 2019 from the project’s treasury to participate in the protocol.

Role of Vcs in Defi

As of late, bringing venture capitalists on board has become a sort of debate topic among the decentralized finance (DeFi) space.

The argument is that giving preferential treatment to VC firms in token sales may go against the ethos of community-driven DeFi.

Others say VCs can play a huge role in helping projects in the DeFi space expand using their vast resources. 

According to Hayden Adams, founder of the…

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