Synthetix Ventures into Counterparty Risks: Partners with Infinex Derivatives Exchange

Synthetix, a decentralized finance (DeFi) project in the cryptocurrency space, is gearing up to diversify its product lineup.

Founder Kain Warwick has unveiled plans to introduce a new derivatives front-end named Infinex to Synthetix’s decentralized trading infrastructure. The upcoming exchange, Infinex, aims to cater to both new and experienced traders by providing features reminiscent of centralized exchanges (CEX), including a non-custodial central limit order book.

Although Synthetix already operates Kwenta, a derivatives decentralized exchange (DEX) on Optimism, Warwick has identified three key challenges with the existing platform. Currently, traders must bridge assets to the layer-2 rollup and exchange them for sUSD, Synthetix’s stablecoin used as margin collateral, before initiating trades.

Additionally, every order or cancellation on the current platform requires the trader’s wallet signature, incurring a small fee. In a blog post, Warwick emphasized the goal of eliminating any doubts surrounding the ability of decentralized perpetuals (Perps) to directly compete with centralized exchanges.

While being on a non-custodial DEX offers advantages, Warwick playfully points out the counterparty risks associated with now-defunct exchanges like FTX. He highlights FTX’s dramatic collapse last autumn as an example.

“It has become increasingly clear that the obstacles to Synthetix Perps growth can be resolved, but it will require a fresh approach,” Warwick stated.

The planned DEX will cater to traders familiar with platforms like Binance, providing access through a simple username and password, while maintaining a non-custodial setup. Warwick explained that Infinex will generate a unique public-private key pair for each user, stored locally in the browser, exclusively used for signing trade orders and not for fund withdrawals.

Specific technical implementation details of the DEX were not disclosed, with Warwick mentioning during a Synthetix Discord ‘Ask Me Anything’ session that they had been entrusted to the core developers.

The introduction of this new project is expected to align with the release of Synthetix’s version 3 of its perpetual futures trading system, anticipated to occur in the coming months.

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