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Synthetix (SNX) rebounds in anticipation of L2 Curve Wars and Optimism airdrop announcement

Layer-Two (L2) solutions for the Ethereum (ETH) network have gained prominence over the past year due to the need for scalable networks that offer transactions with low fees, leading to numerous projects involving cross-chain bridges competing blockchain networks.

One project that has benefited from the growth of L2 scaling solutions is Synthetix (SNX), a decentralized finance (DeFi) protocol that enables the creation of synthetic assets and offers exposure to derivatives and futures trading on blockchain.

Data from Cointelegraph Markets Pro and TradingView shows that the price of SNX is up 52.6% since bottoming out at $4.44 on April 11 and hitting an intraday high of $6.78 on April 26, before a wide widespread market downturn sent it back down to $5.90.

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SNX/USDT 1-day chart. Source: TradingView

While most of the market is bearish, there are potential catalysts for SNX price to see further appreciation.

Start on optimism

One of the biggest developments for the Synthetix protocol was its launch on Optimism, an L2 network that’s making waves this week thanks to an airdrop announcement. SNX staking began on January 16th and as the network grows, speculators are dizzy at the prospect of future airdrops and staking incentives.

Most recently, Synthetix used its launch on Optimism to get 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.

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Synthetix has also partnered with Lyra Finance (LYRA) to offer 12,000 SNX and 50,000 LYRA per week as an additional incentive for veCRV voters.

The L2 airdrop season could be a catalyst for SNX

A second reason why SNX’s price has the potential for further appreciation is traders’ expectation that an airdrop season for L2 protocols could occur.

There has been much speculation that Optimism and Arbitrum, two of the most popular L2 networks in the crypto ecosystem, would eventually dump their protocol tokens to early adopters of the networks.

That speculation became a reality after Optimism released the first details of the Optimism Collective, a “large-scale experiment in digital democratic governance” “built to drive rapid and sustained growth of a decentralized ecosystem.”

Along with the launch of the Optimism Collective comes the launch of the OP governance token, which will airdrop 5% of the initial endowment 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 by being active on the network using protocols like Synthetix.

As 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.

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In addition to the potential to receive an OP airdrop, SNX fetchers have also been lured into optimism by the 81% staking rewards currently being offered by the protocol.

Related: Projects based on optimism surge on token airdrop rumors

Increasing user base and processed volume

Further evidence of Synthetix’s rising popularity can be found in the platform’s metrics on optimism, which have been rising steadily over the past month, according to data from Dune Analytics.

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Synthetix log metrics. Source: Dune Analytics

As the chart above shows, the number of retail traders on the protocol has increased since futures trading began in mid-March, and the protocol has handled nearly $1.59 billion in total volume.

Cointelegraph Markets Pro VORTECS™ data began spotting a bullish outlook for SNX on April 23, ahead of the recent price surge.

Exclusive to Cointelegraph, the 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.

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VORTECS™ Score (green) vs. SNX price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS™ Score for SNX moved into the green, peaking at 77 on April 23, about 39 hours before the price surged 28% the next day.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.