Synthetix founder Kain Warwick has submitted a proposal to turn off SNX’s high yield returns and cap its supply at 300 million tokens.
According to Warwick, the just proposed Synthetix Improvement Proposal (SIP) will end SNX inflation at 300 million tokens in ten weeks.
He continued that the “inflation was designed to bootstrap the network, and it has done the job” since the network now gets fees from atomic swaps. Hence, the move to turn it off.
The SIP 276 proposal titled “Turn off the money printer” will cap the token supply and make any decisions on token supply a meta-governance one. This means that future changes in SNX supply will require the unanimous decision of the Spartan council.
Presently, SNX supply is around 293 million. So there will still be ten more fee periods where SNX would be minted and distributed until the supply reaches 300 million.
In June, Synthetix made over a million in daily fees. While the daily fees have now dropped, it is still over $150k on average, and the trading volume this month on the network is currently over $1.2 billion.
While Warwick believes the proposal has a chance of passing, some think the success of the proposal could affect Synthetix.
Crypto analyst firm Delphi Digital said that the protocol might struggle with maintaining its user base and attracting new users with organic revenue, especially when competitors offer higher yields.
SNX is trading at $2.73 after falling 14% in the last 24 hours, mirroring the general decline in the crypto markets.