The SNX award received a boost after the project prepared to participate in L2 Curve Wars and Optimism Airdrop hunters studying the protocol.
Layer 2 (L2) solutions for the Ethereum (ETH) network have gained prominence over the past year due to the need for scalable networks that offer low-fee transactions, which has led to numerous projects involving cross-chain bridges competing with blockchain networks.
One project that has benefited from the growth of L2 scaling solutions is Synthetix (SNX), a decentralized finance (DeFi) protocol that allows the creation of synthetic assets and offers access to derivatives and futures trading on the blockchain.
Data from Cointelegraph Markets Pro and TradingView shows that the price of SNX rose 52.6% from its low of $4.44 on April 11, hitting an intraday high of $6.78 on April 26, before due to a widespread market downturn, it dropped again to $5.90.
SNX/USDT 1-day chart. Source: Trading View
While much of the market is bearish, there are potential catalysts for the SNX price to rise further.
Start with optimism
One of the biggest developments for the Synthetix protocol was its launch on Optimism, the L2 network that made a lot of noise this week with its airdrop announcement. SNX betting began on January 16, and as the network grows, speculators are dizzy at the prospect of future airdrops and staking incentives.
More recently, Synthetix has used its launch on Optimism to become more involved in the “curve wars” and is currently offering the highest bribes to get veCRV voters to incentivize voting for the sUSD curve pool.
Synthetix is also partnering with Lyra Finance (LYRA) to offer 12,000 SNX and 50,000 LYRA per week as an added incentive for veCRV voters.
L2 giveaway season could be a catalyst for SNX
The second reason why the price of SNX has the potential for further growth is the expectation by traders that the season of airdrops for L2 protocols may begin.
There has been much speculation that Optimism and Arbitrum, two of the most popular L2 networks in the crypto ecosystem, will end up dumping their protocol tokens among the early adopters of the networks.
This assumption became a reality after Optimism revealed the first details of the Optimism Collective, a “large-scale experiment in digital democratic governance” “built to ensure the rapid and sustainable growth of a decentralized ecosystem.”
Along with the launch of the Optimism Collective comes the launch of the OP Governance Token, which will give away 5% of the initial donation to early adopters. For those who did not qualify for the first round of airdrops, there is still a chance to qualify for future airdrops if they are active online using protocols such as Synthetix.
Since Synthetix offers futures trading on Optimism, the protocol could benefit from users looking for opportunities to be active on the network, and this could increase demand for SNX.
In addition to being able to receive an OP airdrop, SNX faucets have also instilled optimism in 81% of the staking rewards currently offered by the protocol.
Related: Optimism-Based Projects Grow on Token Giveaway Rumors
Increase in user base and processed volume
Further evidence of Synthetix’s growing popularity can be found in the platform’s optimism scores, which have been rising steadily over the past month, according to Dune Analytics.
Synthetix log metrics. Source: Dune Analytics.
As shown in the chart above, the number of retail traders on the protocol has increased since futures trading began in mid-March, bringing the total volume of the protocol to almost $1.59 billion.
Cointelegraph Markets Pro VORTECS™ data began pointing to a bullish outlook for SNX on April 23, ahead of the recent price spike.
Exclusive to Cointelegraph, VORTECS™ Score is an algorithmic comparison of historical and current market conditions derived from a combination of data points such as market sentiment, trading volume, recent price movements and Twitter activity.
VORTECS™ score (green) compared to SNX price. Source: Cointelegraph Markets Pro.
As you can see in the chart above, SNX’s VORTECS™ reading turned green, peaking at 77 on April 23, about 39 hours before the price surged 28% the next day.
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