Synthetix to Pivot V3 Perps From Arbitrum to Base

Ethereum-based derivatives liquidity protocol Synthetix has begun to pivot from Arbitrum to Base by setting perps trading on the latter network to close-only mode, according to a Jan. 8. blog post.

As Synthetix shutters perpetuals trading on Arbitrum, traders can no longer open new positions or increase existing ones. However, existing open positions will not be affected, and traders can reduce or close them at any time. Traders can also migrate their trading to Base as all Arbitrum markets are available there.

The move is part of a strategic effort to position the platform at the forefront of decentralized finance (DeFi). It has acquired Kwenta and TLX, two derivatives trading platforms that align with this plan. Synthetix, which was founded in 2017 by Kain Warwick, has a total value locked (TVL) of $210 million in its V3.

“The decision to wind down Arbitrum Perps is part of a broader strategy to grow alongside Base, the largest and fastest-growing Ethereum rollup by TVL. Synthetix’s USDC pool on Base has already become the largest non-SNX liquidity pool in the protocol,” Synthetix editors wrote.

“With the launch of Synthetix V3’s most cutting-edge features, including gasless 1-click-trading, multicollateral margin, and the upcoming launch of Leveraged Tokens, Base is the ideal network to continue development on a world-class derivatives trading suite.”

Sunsetting USDx

Synthetix has also set a plan to sunset USDx, a stablecoin that powers perps trading on Arbitrum. To support the migration from Arbitrum to Base, the Synthetix Treasury has purchased USDx and used it to fund a wrapper so users can redeem the token for USDe and vice versa.

USDe is the third-largest stablecoin by market cap, according to data from DeFiLlama.

Synthetix’s strategy shift comes following a Sept. 25 proposal to change the direction of the platform and form a new council to oversee its affairs. The spartan council consists of seven members, including Benjamin Celermajer, an investor in the Synthetix initial coin offering (ICO) in 2017.