Synthetix has recently launched its Andromeda upgrade, marking a significant shift towards a deflationary model. This strategic move has already seen the SNX token jump by 2.47% to $3.47, an impressive feat in a predominantly bearish altcoin market.
Andromeda’s Impact: A Closer Look
The core of the Andromeda upgrade lies in its deflationary mechanism embedded in the Perps V3 engine. 40% of the Perps V3 Fees are now allocated to a buyback-and-burn program for SNX, mirroring tactics in Yearn Finance’s approach.
Moreover, the fee distribution has been meticulously restructured. Besides the 40% earmarked for the SNX buyback and burn, 20% is allocated to Perps Integrators, with the remaining 40% going to USDC liquidity providers.
This deflationary strategy, part of the wider SIP-345 initiative, is poised to influence Synthetix’s market dynamics significantly. By reducing the overall supply of SNX while potentially increasing demand, there’s a strong likelihood for the token’s value to climb.