---
title: "Synthetix (SNX)"
url: "https://caper.network/wiki/daos/dexs/synthetix"
updated: 2026-08-26
license: CC-BY-4.0
license_url: "https://creativecommons.org/licenses/by/4.0/"
---

# Synthetix (SNX)

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| **Name** | Synthetix |
| **Type** | Protocol DAO (on-chain derivatives / synthetic-asset liquidity layer) |
| **Governance token** | SNX — staked to back protocol liquidity and to elect the councils that govern the protocol |
| **Product** | A liquidity layer for perpetual futures and synthetic assets; SNX stakers historically minted the sUSD stablecoin against staked collateral |
| **Governance model** | **Elected representative councils.** SNX stakers do not vote on every parameter — they elect a 7-seat [Spartan Council](https://governance.synthetix.io/) that executes changes via a 4/7 multisig |
| **Founded** | 2018 (launched as Havven; rebranded Synthetix) |
| **Status** | 🟢 Active |
| **Notable for** | Being DeFi’s canonical _elected-council_ DAO — regular on-chain elections choose a small signing body, rather than putting every proposal to a direct token vote |

**Synthetix** is one of DeFi’s oldest and longest-running DAOs, and its most distinctive contribution to governance design is organizational rather than financial: instead of asking every token holder to vote on every change, it asks them to _elect a small council_. That council — the [Spartan Council](https://governance.synthetix.io/) — holds the keys and executes upgrades and treasury spends through a multisig. Synthetix is therefore the reference example of **representative** DAO governance, sitting between direct token voting ([Aave](/wiki/daos/lending/aave-dao), Compound) and validator-weighted chain governance ([dYdX](/wiki/daos/dexs/dydx)).

The protocol began in 2018 as Havven before rebranding to Synthetix. For most of its life the core mechanic was _pooled-collateral synthetic assets_: SNX holders staked their tokens as collateral and minted the sUSD stablecoin, and the staked SNX backed a shared pool of on-chain synthetic assets. In 2025–2026 the DAO voted to retire that model, launching a perpetual-futures exchange on Ethereum mainnet in December 2025 and moving toward exchange-driven revenue.

## The Spartan Council: elected, not direct

Synthetix is governed by the **Spartan Council**, a body of **7 seats**. Each election cycle, **4 of the 7 seats** are elected by SNX stakers; the remaining seats comprise **3 advisory seats** (continuity and external perspective) and **1 treasury seat** that is a required signer of all treasury transactions. Any governance proposal or treasury movement needs **4 of 7 signatures** to execute, per the [January 2026 elections announcement](https://blog.synthetix.io/synthetix-elections-january-2026/).

Historically the model ran _multiple_ councils with separated remits — a **Treasury Council** managing the treasury and funding the other bodies, and an **Ambassador Council** advocating for Synthetix across the wider Ethereum/DeFi ecosystem (see the community-maintained [guide to Synthetix governance](https://medium.com/@SynthetixGrants/a-community-guide-to-synthetix-governance-80dbaa072499)). This deliberate split of powers into elected, separately-accountable councils is what makes Synthetix distinct from a single token-house.

Elected members receive a monthly stipend from the treasury (2,000 SNX per member per the [January 2026 post](https://blog.synthetix.io/synthetix-elections-january-2026/)) — governance work is a paid, term-limited role rather than volunteer labor.

## Elections and the 420 pool

Councils are re-elected on a fixed **6-month cadence, every January and July**. The [January 2026 election](https://blog.synthetix.io/synthetix-elections-january-2026/) ran a 5-day voting window (26–30 January) on a Snapshot vote open to SNX stakers. Crucially, voting eligibility is tied to staking: only SNX staked in the **420 pool** before voting opens can be voted with. Staking, liquidity provision, and the right to elect the council are bound together in the same act.

Fixed-term elections are the accountability mechanism that a representative model needs. Because the whole council turns over on a predictable schedule, stakers who dislike the direction do not have to wait for a specific proposal — they replace the decision-makers at the next epoch.

## The SIP process

Protocol changes move through **Synthetix Improvement Proposals (SIPs)**, with treasury spends handled as **Synthetix Treasury Proposals (STPs)**. A change starts as a written SIP in the public [SIP repository](https://sips.synthetix.io/), is reviewed and refined in the open, and is then put to the Spartan Council; a 4/7 council vote authorizes execution. The written-proposal-then-council-vote pipeline gives the elected body a concrete, auditable mandate for each action rather than a blanket authority.

Two recent SIPs show how far a council mandate can reach:

- [SIP-420 (“the 420 Pool”)](https://sips.synthetix.io/sips/sip-420/), implemented January 2025, replaced individual SNX staking with a **protocol-owned debt pool** — a form of _delegated staking_. Stakers move their debt positions (not their collateral) into a single pooled contract over a 12-month transition; the pool runs at a **200% issuance ratio** versus a punitive **1000%** for solo stakers, and early exits carry a penalty that decays linearly from 100% to 50% over the transition.
- [SIP-423](https://sips.synthetix.io/sips/sip-423/) voted to **retire sUSD** and pay holders in vested SNX, alongside SNX and sUSD buybacks aimed at restoring the peg — a wholesale change to the protocol’s economic model, ratified through the same council pipeline ([Crypto Briefing](https://cryptobriefing.com/synthetix-retires-susd-snx-conversion/)).

## Why the elected-council model matters for DAOs

Direct token voting has two chronic failure modes: [voter apathy](/wiki/dao-governance/concepts/fundamentals/governance-minimization) (most holders never vote, so a small active minority decides everything) and whale dominance (one large bag can carry a proposal). Synthetix’s answer is to _separate the electorate from the executive_: holders vote rarely — only to choose a council — and a small, named, term-limited body does the day-to-day governing under a multisig. This buys execution speed and clear accountability, at the cost of concentrating power between elections and introducing council-capture and low-turnout risks of its own.

It is a genuinely different point in the design space from the [vote-escrow](/wiki/daos/dexs/curve-dao) and [futarchy](/wiki/dao-governance/concepts/voting/futarchy) approaches, and worth studying precisely because it has run real elections, on a fixed cadence, for years.

## How Caper approaches this

Caper does not use an elected council. Governance weight is **direct and continuous**: a member’s weight on any decision is a smooth function of both the tokens they hold and the votes they have earned — in the contract, `compute_vote_weight = (held × votes) / (supply × circulation)` — so there is no representative layer to elect or capture, and a large bag alone cannot capture control without earned votes. Proposals are typed at execution (a spend, an investment, or an executive action) rather than filtered through a standing council.

Where Synthetix uses _periodic elections_ as its accountability mechanism, Caper uses the [exit right](/wiki/dao-governance/concepts/membership/rage-quit-and-exit-rights): if you dislike the direction, you redeem at a formula-fixed price instead of waiting for the next election to vote a council out. See [what is a caper](/wiki/foundations/what-is-a-caper), [proposals](/wiki/governance/proposals), and [raising funds](/wiki/markets/raising-funds).

## References

- [Synthetix — Governance](https://governance.synthetix.io/) (Spartan Council, 4/7 signing)
- [Synthetix Elections, January 2026](https://blog.synthetix.io/synthetix-elections-january-2026/) (seat structure, cadence, 420-pool voting, stipend)
- [SIP-420: the 420 Pool / protocol-owned debt](https://sips.synthetix.io/sips/sip-420/)
- [SIP-423: sUSD retirement & staking reform](https://sips.synthetix.io/sips/sip-423/)
- [Synthetix Improvement Proposals (SIP) repository](https://sips.synthetix.io/)
- [A Community Guide to Synthetix Governance](https://medium.com/@SynthetixGrants/a-community-guide-to-synthetix-governance-80dbaa072499) (Treasury & Ambassador councils)