Synthetix to Offer Leveraged Tokens in 2025 after TLX and Kwenta Acquisitions

Ethereum-based derivatives trading protocol Synthetix announced its acquisition of leveraged token platform TLX in a token-for-token transaction, Synthetix said in a Dec. 10 blog post.

The platform is completing a thorough review and audit of all TLX products. After that, it will implement parameter improvements and redeploy all contracts, the statement said. It also plans to kick off a leveraged token incentive program in 2025.

“The acquisition of TLX will mark the first end-customer, revenue-generating product built on top of Synthetix that will be owned and operated by Synthetix. This marks a significant milestone in Synthetix’s commitment to expand its product offering and generate additional value for SNX tokenholders,” the Synthetix team wrote in the blog post.

Synthetic’s TLX acquisition came just a month after it acquired the perpetuals trading platform Kwenta in a similar deal. Synthetix and Kwenta were once one platform until 2020, when they separated to allow Kwenta to focus solely on providing industry-standard trading experiences for Sythetix’s derivatives markets.

The acquisitions are part of Synthetix’s strategy to design a decentralized liquidity layer and become a primary product issuer on top of it.

Synthetix is the sixth largest derivatives exchange by total value locked (TVL), according to DeFiLlama data. The TVL of its v3 has increased by over 1,000% in the last month, likely due to Ethereum liquidity providers migrating from V2, as Messari reported.

Synthetix Leveraged Tokens

Leveraged tokens are crypto derivative products that offer exposure to the price movements of an underlying asset with leverage. They are designed to amplify a user’s gains or losses and offer a more convenient means to access leverage without dealing with margin trading or holding a collateral asset.

Synthetix’s TLX acquisition allows it to go to market with a leveraged token with six months of history and performance. It is also the first in a line of structured products that Synthetix plans to launch in the coming months as it positions itself as a category leader among derivative exchanges.