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Synthetix has announced a $ 12 million financing from top venture capitalists

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Synthetix, a DeFi project for synthetic assets, announced that it raised $ 12 million from Paradigm, Coinbase Ventures, and IOSG.

Venture Capitalists Enter DeFi Governance

All three venture capital firms invested by purchasing $ 12 million worth of SNX tokens from SynthetixDAO's treasury.

The funds will be used as collateral to provide liquidity and to participate in the governance of the Synthetix platform.

The latest funding indicates growth efforts by bringing valuable liquidity partners into the Synthetix ecosystem.

Previously, Synthetix founder Kain Warwick reported that SynthetixDAO surpassed $ 1 billion in cash holdings and now earns more monthly commissions (~ $ 750k) than it spends.

This means that the project has a positive cash flow only in the protocol fees and there is no shortage of funds.

SNX token sales as a form of financing are not a recent phenomenon. Framework Ventures purchased 5 million Synth (SNX) tokens in 2019 from the project treasury to participate in the protocol.

Role of Venture Capitalists in DeFi

Lately, the onboarding of venture capitalists has become something of a topic of debate within the decentralized finance (DeFi) space.

The argument is that giving VC firms preferential treatment in token sales may go against the spirit of community-driven DeFi.

Others say that venture capitalists can play a huge role in helping projects in the DeFi space expand using their vast resources.

According to Hayden Adams, founder of the popular DEX Uniswap, VCs could be of great help to DeFi projects if they add value rather than just being passive investors.

Jordan Momtazi, a senior contributor to SynthetixDAO, confirmed this notion by stating that new venture capital firms help recruit talent and lead the expansion of the Synthetix protocol to new regions.

The onboarding of new partners also comes at a time when Synthetix is ​​preparing to release the long-awaited V3 update that will allow for Layer 2 scaling.

Meanwhile, new assets continue to be released for trading on the platform, with sTSLA (Tesla shares) being the last to be ratified by the Spartan Council.





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