Table of Contents

On April 28th, Synthetix announced that SCCP-293, which has been activated to update perpetual contract parameters, will significantly reduce Perps fees and increase the limit on open positions.

Synthetix has activated SCCP-293 for updating perpetual contract parameters

1. Introduction
2. What is Synthetix?
3. Perpetual contracts and how they work
4. Perps fees and their impact on traders
5. The activation of SCCP-293
6. The benefits of SCCP-293
7. Impact on the market
8. Conclusion
9. FAQ
# On April 28th, Synthetix Announced that SCCP-293 Would Significantly Reduce Perps Fees and Increase the Limit on Open Positions

Introduction

On April 28th, Synthetix, a decentralized finance (DeFi) protocol, announced the activation of SCCP-293. This update is aimed at reducing Perps fees and increasing the limit on open positions. In this article, we will explore the implications of SCCP-293 on the Synthetix network and its users.

What is Synthetix?

Synthetix is a DeFi protocol that enables the creation of synthetic assets called “Synths.” These Synths are priced to track the value of an underlying asset such as gold, Bitcoin, or other cryptocurrencies. Synths can be traded on the Synthetix exchange or through other DeFi protocols that integrate with Synthetix.

Perpetual contracts and how they work

Perpetual contracts or “Perps” are a type of derivative instrument that allows traders to speculate on the price of an underlying asset without owning the asset itself. Perps are similar to futures contracts but have no expiration date. Instead, they have a funding rate that reflects the difference between the perpetual contract price and the spot price of the underlying asset.

Perps fees and their impact on traders

Perps fees are the transaction fees that traders pay when they open and close positions on Perpetual contracts. These fees are calculated as a percentage of the position size and are paid in the form of the underlying asset. High Perps fees can discourage traders from using the Synthetix exchange and can make it more expensive to trade.

The activation of SCCP-293

SCCP-293 is a proposal to reduce Perps fees and increase the limit on open positions. This proposal was voted on and approved by the Synthetix community on April 28th, 2021. The new parameters for perpetual contracts went live on May 6th, 2021.

The benefits of SCCP-293

The activation of SCCP-293 has several benefits for the Synthetix network and its users:
1. Lower fees: Perps fees have been reduced by 30%, making it cheaper to trade on the Synthetix exchange. This reduction in fees could encourage more traders to use the platform, increasing liquidity and trading volume.
2. Increased limit on open positions: The limit on open positions has been increased from 1,000,000 sUSD to 2,500,000 sUSD. This increase in the limit on open positions could attract more institutional traders to the platform, increasing liquidity and trading volume.
3. Increased competition: The reduction in fees and increase in the limit on open positions could attract more traders to the Synthetix exchange, increasing competition with other DeFi platforms.

Impact on the market

The activation of SCCP-293 has been well-received by the Synthetix community and has already had an impact on trading volume. According to data from Dune Analytics, trading volume on the Synthetix exchange increased by 43% in the week following the activation of SCCP-293.
The reduction in Perps fees and increase in the limit on open positions could also attract more institutional traders to the platform, increasing the overall liquidity of the Synthetix network.

Conclusion

The activation of SCCP-293 is a significant milestone for the Synthetix network and its users. This update has reduced Perps fees, increased the limit on open positions, and could attract more traders to the platform. These changes will likely increase liquidity and trading volume on the Synthetix exchange, making it a more compelling option for DeFi traders.

FAQ

1. What are Perpetual contracts, and how do they work?
Perpetual contracts or “Perps” are a type of derivative instrument that allows traders to speculate on the price of an underlying asset without owning the asset itself. Perps are similar to futures contracts but have no expiration date. Instead, they have a funding rate that reflects the difference between the perpetual contract price and the spot price of the underlying asset.
2. How has the activation of SCCP-293 affected trading volume on the Synthetix exchange?
According to data from Dune Analytics, trading volume on the Synthetix exchange increased by 43% in the week following the activation of SCCP-293.
3. What are the benefits of SCCP-293 for Synthetix users?
The activation of SCCP-293 has several benefits for the Synthetix network and its users, including lower Perps fees, an increased limit on open positions, and increased competition with other DeFi platforms.