Synthetix, one of the largest DeFi protocols, has announced an initiative that provides an additional reward to good actors for providing liquidity to the ecosystem and assuming risk. Two million SNX will be distributed to those who didn’t game the system through “snapshotting.”

DeFi users who are familiar with the pros and cons of each protocol often look to game various platforms to make risk-free income. Synthetix, for instance, pays those who stake rewards in SNX and transaction fees. But the way by which rewards are disbursed has been easily gameable.

To determine each staker’s reward in SNX and sUSD (as fees), Synthetix takes a snapshot of the network and issues that week’s network emissions in a proportional manner. Someone staking 3% of the supply, for instance, would receive 3% of the total SNX inflation for the week and sUSD as transaction fees. 

This snapshot, however, has been set for every Wednesday at 8 PM Australian Eastern Daylight Time (AEDT). 

As a result, savvy DeFi investors would borrow SNX on Wednesday evening and stake it until the snapshot was taken. They would then remove their stake and pay back the loan shortly after.

This diluted rewards for those continuously staking SNX and bearing risk. Debt shared by SNX stakers – liability of stakers – was shared between the good actors, while the gamers diluted the upside and assumed none of the liability.

In a move that aims to disincentivize “snapshotting,” the Synthetix Foundation is issuing two million SNX, currently worth approximately $1.7 million, to those who acted in good faith and supported the network. 

While this may not disincentivize bad actors, it is still advantageous for stakers to continue staking and receive a bonus of sorts. 

The post Synthetix to Reward Risk-Bearing Stakers in New Upgrade appeared first on Crypto Briefing.

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