The SNX tokens of the blockchain-based derivatives protocol Synthetix rose in value Tuesday after another project, Lyra, announced a rewards program tied to the protocol’s sUSD stablecoins.
To create new sUSD coins, traders must first obtain SNX tokens and then stake them on the Synthetix platform.
Lyra, a decentralized options trading platform that launched in late August, says it wants to increase the supply of sUSD on Optimistic Ethereum – a so-called “layer 2” network that is used to speed up and lower the cost of Ethereum blockchain transactions. Lyra stated in a blog post on Monday that it uses Synthetix’s sUSD tokens “as both a source of liquidity and a means of exchange.”
Lyra’s new “trial liquidity mining program” will make 750,000 LYRA tokens available to liquidity providers. Because the LYRA tokens have not yet been released for trading in cryptocurrency markets, the monetary value of the rewards is unknown.
According to the Sept. 13 blog post, “the rewards earned during this program will be distributed when the LYRA token is officially launched.” “In the coming weeks, more information about the LYRA token will be released.”
Synthetix is a protocol that enables users to create digital replicas of cryptocurrencies such as bitcoin as well as real-world assets such as the US dollar and oil. These “synthetic” tokens can then be used in decentralized finance, or DeFi, in which traders can trade, lend, or deposit tokens via automated, blockchain-based protocols.
As of press time, the SNX price had risen 10% in the previous 24 hours to $13.34, with a market capitalization of $1.5 billion.
The episode exemplifies an increasingly common theme in cryptocurrency markets: digital assets rising in value due to demand from DeFi traders looking to profit from token giveaways. Many cryptocurrency projects use these incentive programs to market themselves and attract new users.
According to Denis Vinokourov, head of research at Synergia Capital, the Lyra project’s rewards program is heavily reliant on people obtaining SNX in order to stake it, obtain the sUSD, and begin the process of attempting to qualify for the Lyra rewards program.
“This specifically targets SNX stakeholders, and thus contributes to its rise,” Vinokourov explained.
According to Lucas Outumuro, IntoTheBlock’s head of research, “this has been something discussed and anticipated in the Synthetix community.”
He mentioned that the number of addresses holding the SNX token has reached an all-time high, approaching 100,000: “This demonstrates a growing community of Synthetix ecosystem participants,” Outumuro said.