SNX prices were boosted after the project was ready to participate in the L2 Curve War and the Optimism airdrop hunters involved in the agreement.
Layer 2 (L2) solutions for Ethereum (ETH) networks have become increasingly prominent over the past year due to the need for scalable networks that can provide low-fee transactions and have led to many projects building cross-chain bridges with competing blockchain networks.
One project that has benefited from the growth of the L2 scaling solution is Synthetix (SNX), a decentralized finance (DeFi) protocol that creates synthetic assets and provides exposure to derivatives and futures trading on the blockchain.
Cointelegraph Markets Pro and TradingView data show that since hitting a low of $4.44 on April 11, the price of SNX rose 52.6% to a daily high of $6.78 on April 26, followed by a general downturn in the market retreating to $5.90.
SNX/USDT 1-day chart. Source: TradingView
While most of the market is falling, there is a potential catalyst for further appreciation in SNX prices.
Start optimistic
One of the biggest developments in the Synthetix protocol was its launch on Optimism, an L2 network that caused a stir this week thanks to the airdrop announcement. SNX pledges began on January 16, and as the network grew, speculators were dazzled by the prospect of future airdrops and pledge incentives.
More recently, Synthetix has used its launch on Optimism to become more involved in the "Curve Wars", and currently offers the highest level of bribery to get veCRV voters to incentivize voting on 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 additional incentive for veCRV voters.
The L2 airdrop season could be a catalyst for SNX
The second reason why SNX prices are likely to appreciate further is that traders expect an airdrop season for the L2 protocol.
There is a great deal of speculation that optimism and arbitrum, the two most popular L2 networks in the crypto ecosystem, will eventually airdrop their protocol tokens to the network's early adopters.
This speculation became a reality after Optimism released the initial details of optimism Collective, a "large-scale experiment in digital democratic governance" that "aims to drive rapid and sustainable growth of a decentralized ecosystem."
With the launch of the Optimism Collective, op governance tokens will also be launched, with 5% of the initial supply being airdropped to early adopters. For those who are not eligible for the first round of airdrops, there is still a chance to qualify for future airdrops by being active on the web using protocols such as Synthetix.
Synthetix offers futures trading on Optimism, a protocol that can benefit users seeking to be active on the network, which could increase the demand for SNX.
In addition to the potential to earn OP airdrops, SNX airdroprs are attracted by the 81% pledge reward currently offered by the agreement.
Related: Optimistic-based projects have soared due to rumors of token airdrops
Climbing user base and trading volume
Further evidence of Synthetix's growing popularity, according to Dune Analytics, can be found in the platform's Optimism metric, which has been growing steadily over the past month .
Synthetix protocol indicator. Source: Dune Analysis
As the chart above shows, the number of independent traders in the agreement has been climbing since the launch of futures trading in mid-March, and the agreement has handled nearly $1.59 billion in total trading volume.
VOLTTECS™ data from Cointelegraph Markets Pro began detecting sNX's bullish outlook on April 23 ahead of the recent price increase.
Cointelegraph's unique VORTECS™ score is an algorithmic comparison of historical and current market conditions, derived from a combination of data points including market sentiment, trading volume, recent price movements, and Twitter activity.
Voltecs™ score (green) with SNX price. Source: Cointelegraph Markets Pro
As the chart above shows, SNX's VORTECS™ score climbed to the green zone and reached a high of 77 on April 23, with prices soaring 28% the next day about 39 hours later.