$SYN Token Upgrade to $CX

Moses

Introduction

The motivation of this proposal is to upgrade the $SYN token to $CX. This will allow for a stronger, more unified protocol for all $SYN holders to benefit from Cortex Protocol. This unifies the focus, liquidity, and ownership among our community, users, and other stakeholders across one token, instead of two separate ones. We are therefore suggesting to upgrade $SYN and give the value of Cortex to $SYN holders.

Cortex Protocol

Cortex is building an AI trading agent, allowing users to “prompt to trade”.

AI agents with on-chain capabilities will be the primary way to interact with blockchains. These agents will be the easiest way to use crypto, layering on knowledge about every facet of crypto, 24/7 liveness and understanding from any data source. Using crypto without an agent will be obsolete.

Synapse Protocol

Synapse Protocol is a decentralised interchain network, allowing developers and users to read and write data between different blockchains.

Synapse products provide the rails for cross-chain messaging, no-slippage bridging, any-to-any asset swaps, and truly chain abstracted protocols. To date, it has settled $55B, been used by more than 2.5M users and generated $30M+ in fees. Synapse’s vision is to be the HTTPS for crypto, allowing developers to build apps without the constraints of individual blockchains.

Motivation

Why upgrade $SYN to $CX instead of having two separate tokens?

The motivation to have one unified token is clear:

One upgraded token allows unified liquidity, community and incentives:
a) Labs and DAO contributors have a unified token and project to contribute to. Small nimble startups are not fit
for managing two separate projects.
b) All holders and team members have their incentives aligned preventing diverging incentives from having two
separate holder bases.
c) Unified liquidity across CEXs and on-chain allows for deeper and more efficient liquidity leading to less value
leakage for holders and traders.

CEX support: Given the extensive listings of $SYN across leading exchanges such as Coinbase, Binance, Bybit, Kraken and other venues, having an upgraded token that can benefit from these listings allows the maximum value accrual instead of balancing the liquidity and custody of two tokens with several counterparties.

Allow for all $SYN holders to benefit from the new utility and value of the Cortex Protocol. Granting $CX tokens to $SYN holders holding on exchanges or through custodial services is hindered by those counterparties. By simply upgrading the token, all $SYN token holders benefit from the Cortex Protocol immediately and all future development and product releases that the protocol will build.

Proposal Implementation:

Ratify the medium proposal from Cortex Labs approving the $CX allocation for $SYN holders. Users receive 5.5 $CX for every $SYN.

Transfer ownership, IP and governance of Cortex Protocol from Labs to the new Cortex DAO for the benefit of $CX holders.

Merge all existing $SYN utility into $CX resulting in a unified token. Resulting in a unified $CX token and DAO inheriting:
a) $CX as the native governance token for all Synapse and Cortex related contracts and protocol operations
b) A combined DAO with all assets

Open a two way token migration portal between $CX and $SYN for the next three months. All major CEXs are
in communication and expected to support the token upgrade by this deadline. After this deadline, there will be
an additional 9 month grace period where $SYN will be able to migrate to $CX but not the other way around.
Afterwards, $SYN will have no utility.

$CX Transferability and liquidity management:
a) Turn on $CX transferability
b) Migrate the SYN/ETH protocol owned liquidity to a $CX/SOL pool on Solana, additionally incentivise this pool
at a rate to be determined
c) Migrate the SYN/ETH pool and OP incentives on Velodrome to a $CX/ETH pool and increase incentives from
5k OP per week to 15k OP per week for 12 week

Voting:

Option 1: Ratify the proposal above and start implementation immediately leading to a unified protocol

Option 2: Reject the proposal above disconnecting $SYN and $CX. In this case Cortex Protocol would be its own token and project completely separate from Synapse and $SYN holders.

Frequently Asked Questions can be found here: https://docs.google.com/document/d/13rhRrD5orsee7LzW7heRSEe4uPz5KnN61ZtgUBct2DI/edit?usp=sharing

Gallium

I think that was the right thing to do from the very beginning. Two tokens will only cause more problems. I am for option 1.

I have only one criticism. The process of issuing the CX token and then merging it with SYN was not managed well.

In such matters, it would be better to ensure the participation of the community from the very beginning and to follow a more transparent process.

0xbottomseller

Some questions

1) what is the purpose of spending $3.5M USD to buy back $SYN which is being deprecated, and then not migrated? Why not migrate Synapse DAO assets to Cortex DAO instead – pros and cons? Why not use the USD to buy CX instead?

2) If CX will be trading “Immediately after the passing of the proposal” – can you elaborate on how close we are to resolving migration of tokens on CEXs ? how are the CEXs going to migrate the tokens - in the same way on-chain participants do it – considering there will be no snapshot?

3) If one of the primary avenues for on-chain liquidity will be Solana – why don’t we have the relevant Solana contract address available for the CX token? This needs to be made available before CX can be traded, with a bridge to EVM established?

4) “The Token Generation Event (TGE) was successfully completed on October 3rd, 2024” + “Core contributors (17.7%): Allocated to current and future contributors of Cortex Protocol. Tokens vest over four years with a six month cliff”

this means the team tokens start emitting on April 3rd 2025? On which chain will this be received? Access to the address determined for this?

5) Inflation / Dilution:

Only 73.5% of the CX is allocated to the SYN holders, which means there is an effective 26.5% tax for the migration to CX from SYN for all holders, except the DAO? Can you reconcile how the inflation and dilution play together as per this part “ To calculate the inflation rate: The total CX supply is 1,646,590,000 tokens. Since each SYN converts to 5.5 CX, if we converted all CX tokens back to SYN, we’d have 299,380,000 ‘SYN equivalent’ tokens. This represents a 19.75% total increase in supply over the next four years.”

socrates

@"0xbottomseller"#p2819 In reply to some of your questions:

1) The buyback proposal as outline is not impacted by this proposal. SIP-41 will reduce the circulating supply of $SYN increasing holders' effective ownership of the protocol. This proposal as outlined in 3. b) does "migrate" the Synapse DAO assets into a merged DAO.

2) CEXs will migrate on the backend similar to here.

3) Yes, $CX will be bridgeable between all EVM chains currently supported and Solana. Contract address on Solana will be available prior to token transferability changes.

4)Yes, the specific chain and addresses are not yet set as the tokens are still locked during the cliff period.

5)Given the Synapse DAO tokens are not being migrated to $CX, 100% of $CX tokens are allocated to $SYN holders today, meaning each holder effectively has a larger ownership in $CX then they did in $SYN since these roughly 30M $SYN are not migrated.

Over the next 4 years the growth fund and contributors unlock 26.5% of $CX tokens.

Given not migrating the DAO $SYN tokens is deflationary and the unlocks from the growth fund and contributors are inflationary, it blends out to 19.75% over 4 years when looking at "SYN equivalent" $CX. The FAQ document does a good job of describing this clearly.

Carlos1

The move to deprecate $SYN and focus on the $CX token makes perfect sense to me. The team will struggle to bring value to 2 tokens simultaneously, and given the toxicity of the $SYN brand and chart, this is a chance to reinvent the native token.

Launching on base and Solana also seems fitting as that's where the AI and agents mindshare exists.

Regarding SIP-41, I think we should revisit the plan to buyback $SYN knowing it will be sunsetted in the near future. Reducing the supply of $SYN that can be staked to earn $CX provides a passive reduction (ie, burn) in the $CX supply. This won't really make a meaningful change in market dynamics, nor will it positively impact the new $CX chart in the same way a $CX buyback would.

Moreover, if DAO funds are being used to buy a token, wouldn't the DAO benefit more from owning the new governance token, an asset with actual value?

Buying back $SYN, given this new info, makes zero sense and seems to serve no positive impact to the DAO treasury. If the DAO owns $CX, it can use those funds to incentivize devs to build agents on Cortex and create a robust ecosystem, all of which will increases network fees and benefits relayers.

It seems like a no brainer to change this SIP to better align the new protocol with its native token and the DAO treasury.

Love,

Carlos

0xbottomseller

@"socrates"#p2820

thanks for the responses

2) link doesn't work

5) can you clarify how you reached the 30M $SYN number

Aj013

Very happy to see this:

Currently SYN LP providers had a weird choice and this now mitigates that

Managing a token, trying to get liquidity on exhances, worrying about tokenomics is hard enough with one token, adding a whole other token would just complicate things and spread the team too thin or require significantly more overheads to manage effectively

The SOL news is extremely bullish!

A rebrand is no bad thing, SYN has been incredibly successful and the product is market leading but the coin itself was indeed a bit cursed! Some of the best crypto projects' major bullish moments have followed a rebrand (wake up NEO)

Yalii38

I am in favor of integrating $SYN into $CX, as it brings numerous benefits to the community and the protocol, including:

Unified liquidity and incentives:
A single token simplifies the ecosystem, deepens liquidity, and ensures that all stakeholders – community, team, and investors – are better aligned.

Direct benefits for holders:
$SYN holders immediately gain access to the new functionalities and vision of the Cortex Protocol without any additional complications.

Leveraging existing CEX listings:
With $SYN already listed on major exchanges like Binance, Coinbase, and others, the new token’s potential can be maximized by building on these established listings.

Why the $3.5M $SYN buyback should remain in place
A few community members has suggested canceling the $SYN buyback and purchasing $CX instead.. I believe this is the wrong approach, and I want to emphasize why the $3.5M $SYN buyback should remain in place:

Stabilizing the $SYN price:
The migration from $SYN to $CX has already led to price volatility, as we’ve seen in the past few days. $SYN has significantly underperformed compared to the market, causing uncertainty. A $3.5M buyback would help stabilize the price and prevent further harm to holders.

Loss of CMC ranking:
$SYN has dropped more than 50 positions on CoinMarketCap recently. This decline is not only detrimental to trust but could also discourage potential investors.
Support for $SYN holders with active positions:
Many $SYN holders actively trade the token and hold positions on exchanges. The buyback is essential for them, as it stabilizes the price and allows them to manage their positions without incurring major losses.

Preventing further loss of trust:
Over the past weeks, there have been multiple changes and uncertainties, leading to a loss of trust among some community members (e.g., Herro). The DAO decided on the buyback, and reversing this decision would further erode trust in the DAO, the team, and the protocol itself.
Such a reversal could trigger additional sell-offs, further damaging the protocol’s reputation and price stability.

------------------

The integration of $SYN into $CX is a crucial step to strengthen the protocol and make it future-proof. At the same time, the $SYN buyback is a vital tool to ensure stability during the migration, maintain community trust, and make the transition as smooth as possible.

Canceling the buyback now would be a mistake. Instead, we should focus on implementing both the migration and the buyback to create the best conditions for the long-term success of the protocol.

Carlos1

@"Yalii38"#p2831

Given the vote to buy $SYN happened before we knew that token is being deprecated, I don't think the DAO should honor such a vote.

The information and landscape surrounding $SYN has changed drastically since SIP-41; therefore, I think it behooves the DAO to reconsider whether buying $SYN makes any sense whatsoever.

$CX will be the sole token moving forward, and if we, the DAO, purchase that token, it serves two important functions:

Helps support a healthy $CX launch on chain, providing ample floor support and volume Provides the DAO treasury with the new native token, $CX, which can be used to incentivize the Cortex ecosystem while locking up a portion of the $CX supply

Carlos

Tada

@"0xbottomseller"#p2819 agree with you. Upgrade or doing something but don’t change the circulating supply of $Syn, if can decrease is better. The price $Syn since the Cx release is lower every day, please think about the holder $Syn long term and who buy $Syn for claim $Cx first day

Moses

@"0xbottomseller"#p2822

The link he attached is the following:
https://www.binance.com/square/post/01-16-2025-binance-completes-fantom-ftm-token-swap-and-rebranding-to-sonic-s-19010088072146

5) He gets to 30M $SYN by subtracting the existing circulating supply (around 222M) from the total supply (250m SYN) to be around 28M

Tada

Many people include Herro first time buy $Syn and staked for $Cx because they think it’s a airdrop and now if it a upgrade instead of airdrop, how the feeling of who buy $Syn for staked claim $Cx since the day 1 Cx release 🙁

smithers002

The 6 month cliff should not start from the TGE on October 3rd, 2024. It should be when CX becomes transferable and tradeable on major CEXes. I think the cliff should also be 12 months (at least). The way it's set up now, this is essentially a hidden ICO via dilution of current SYN holders. April 3rd (when 6 month cliff ends) is a little over 2 months away. By the time CX is transferable, liquid, and trading on CEXes, the cliff period will likely be over or very close to it. This provides a huge supply overhang around the launch of a new token.

Not a good look for the project and team for prospective investors - one of the things that drew me (and I'm sure others) to SYN was that there wasn't a huge float of locked tokens for VCs and the team that were acquired for free or near zero cost basis.

So for the sake of not losing complete faith from SYN holders/supporters, I highly suggest changing to a 12 month cliff beginning when CX becomes transferrable and tradeable. This will signal that you all are long term oriented and not trying to just print free tokens to dump on the public (at the cost to SYN holders via dilution).

-MR

Can we change the vote to

Option 1a: Ratify the proposal above and start implementation immediately leading to a unified protocol
Synapse DAO uses buyback funds to buy SYN—removing a portion of CX total supply

Option 1b: Option 1a but instead Synapse DAO uses buyback funds to buy CX. CX purchased will be burned or used according to future Cortex DAO proposal.

Option 2: Reject the proposal above disconnecting $SYN and $CX. In this case Cortex Protocol would be its own token and project completely separate from Synapse and $SYN holders.

Thanks,
MR

fool

This proposal is straightforward and I believe strongly aligns with the best interests of the DAO.

There looks to be quite a lot of dissent and opinions regarding this proposal and I hope to offer some counterpoints to the various perspectives below.

1. The Buyback (SIP-41) - As Socrates pointed out, the buy back is not relevant to this upgrade and conflates the separate proposals. The purpose of this proposal is to determine whether there should be one token (CX) or two token (CX + SYN). Any conflation of these separate proposals further delays this upgrade. The DAO at a later time can decide if there should be adjustments to the buyback given that it has not been initiated.
2. Dilution - The community has made previous mistakes by constantly preventing the team for implementing opportunities to raise capital through the means of adjusting tokenomics (see here). You need to understand as a holder, that resources for Cortex Labs are used to ramp up growth and also better aligns Cortex Lab's incentives with token holders. Dilution is the way forward for that. Much of the grievances from token holders is due to the lack of price action. The lack of price action is due to the lab working with limited resources. This is a short-term sacrifice that opens more doors and eventually leads to value accrual for CX holders later down the line. Cliff schedules can be adjusted, but I doubt the impact would be sizable given the catalysts in the horizon.
3. Solana Contracts - It is short sighted to try to brand the launch under Solana contracts just to capture trends and FOMO. The protocol and all products within the Synapse and Cortex ecosystem are Ethereum & EVM first and so it should be branded as such. Sure, it appears that the Ethereum ecosystem is lagging, but it's not enough justification to rebase CX as a Solana or Base contract. Most legitimate protocols like Chainlink, Uniswap, etc are all still on Ethereum and Cortex should be no different given that it is where it is homegrown. Hypothetically if the Ethereum ecosystem begins to catch up, then CX will have missed two cycles (SOL cycle, and then ETH cycle). It should primarily launch under Ethereum, and should the option in the future become available, it could launch under different platforms such as Solana or Base.

In summary -- there is a lot of different questions and comments about different topics on the protocol. In my opinion, this proposal and discussion should be limited to one decision which is: should there be two tokens or one token. I am strongly in favor of Option 1 (one token), for the reasons outlined in the proposal

smithers002

@"fool"#p2838 I agree with you mostly. I'm ok with dilution to further the protocol, however the 6 month cliff starting from TGE is not right IMO. Should be from when the token becomes transferrable and liquid (and ideally longer than 6 months). Do we know how many tokens vest at the cliff? Is the team in immediate need of cash/how much CX do they plan to sell to fund operations?

If the team is in need of cash to fund operations, then I'm okay with a more immediate cliff, as long as they are transparent with their sales and what they plan to use the funds for.

prime_mover

Long-term (large) $SYN holder here. I strongly support the proposal as is.

From my vantage point, there is no reason to split value between the tokens, and there is ample reason to add long-term incentives to the protocol's core contributors to ensure economic alignment as the protocol develops in this exciting new direction.

fukkenclown69

Clown here, i believe the proposal is almost as good as is, but:

Community raised concerns behind the reason of still doing a buyback as outlined in SIP-41 in case this proposal passes

Tend to believe that @"Yalii38"#p2831 is on the right track and this is actually the right way, since:
1) Proposal did already pass a while ago and reverting it a couple weeks later is not the right way of doing it, bad image kinda
2) One of the best marketing tools in the space is just price going up, $syn is being listed on major CEXes, one just logs in, sees that the thing is in top performers (for days perhaps?) and might wonder behind the reason of such behavior, which potentially makes Cortex more recognizable. Main idea here is gaining visibility of big changes/upgrades happening
3) The antidillution which the buyback provides (since DAO held $syn is excluded from claiming $cx) is quite compelling, also essentially tightening (especially before vesting cliff) the supply of $cx even tho there is only 73.5% reserved for $syn and the rest is newly minted $cx

Migrating DAO owned POL from SYN/ETH to CX/SOL on Soylana

Straight up agree with every problem with it, that fool pointed out in his post @"fool"#p2838 , aswell as:
1) Technically we're slightly exposing ourselves to less "robust" treasury asset by swapping the $eth part to $sol, one might say just look at sol/eth performance and will be right, but i personally am still skeptical
2) The bridging process might be messy in terms of how it will be performed
3) There is no contracts deployed on Solana by Synapse Labs before this and having just a token out there for the whole purpose of having it there is odd

This does not mean that expanding to Solana is not an option and there can't be a $cx contract on sol. If Cortex fully works with Solana, the native evm<>solana bridge have to be deployed by Synlabs to make all the Cortex activity justifiable. Then if the actual functionality is there the idea works just fine.

In the meantime, moving POL from sushi on eth to aero on base seems quite the right thing to do.

Honorable mentions being:

1) Concern raised by @"smithers002"#p2836 about the timing of the cliff, have to be readjusted

2) Pool on velo needs to be moved from basic volatile to concentrated volatile to justify the spending of OP on incentives, v2 pools does nothing really nowadays

@"Moses"#p2817 c) Migrate the SYN/ETH pool and OP incentives on Velodrome to a $CX/ETH pool and increase incentives from
5k OP per week to 15k OP per week for 12 week

Ty for your attention

Gravity

proposal gud

Gallium

Cortex needs marketing and best marketing is buyback proposal. It must be done right after the Cortex release. CX or SYN is not matter, timing is the most critical part.