The Synthetix-based Kwenta exchange is branching out on its own as it strives to become the leading decentralized finance (DeFi) trading hub.
In a blog post on June 15, the exchange has explained its motivations for this independence effort and what it means for both Synthetix stakers and Kwenta users.
Kwenta is a rebranded successor to the synth trading interface Synthetix.Exchange, which is powered by the Synthetix DeFi platform.
To help it reach its goal, Kwenta will be launching its own KWENTA token. The new token will have two primary uses according to the blog post. This first use case will be to participate in governance and the second is for funding and long-term profitability.
The path to DeFi independence
Kwenta essentially and exchange for synthetic assets whereas Synthetix is the underlying protocol for generating them. Due to confusion with branding, Synthetix worked with the community to create Kwenta. It describes itself as an interface optimized for zero slippage synth trading.
Synthetix core developers have been working on implementing Layer 2 scaling solutions to the protocol among other things. So Kwenta was essentially lacking in development resources preventing it from reaching its true potential.
“The solution we’ve found is to formalize Kwenta as an independent project operating outside of the Synthetix core contributors.”
The announcement explained that the Kwenta token will be used to bootstrap the community and fuel an early development team. This will be able to lead it towards becoming a self-sustaining platform.
The new token will complement the Synthetix community, it explained, adding value to Kwenta on its path to independence.
There were no details on official launch date other than “We’re aiming for summer” for the synthetic asset exchange.
SNX token update
Synthetix’s native SNX token has gained 11% in the past 24 hours. SNX had reclaimed the psychological $10 price level during Tuesday morning’s Asian trading session.
It has taken a big hit with the rest of the DeFi tokens during the market slump dropping 60% from its mid-May high of $25.
In terms of total value locked, Synthetix has around $2 billion according to DappRadar. This is a 50% decline from its peak in February.
The little known Kwenta exchange is not listed on any of the major analytics websites, but its big independence drive and token launch could change this.