$SNX token holders have passed proposal SIP-2043 to end the issuance of rewards in the form of newly minted SNX tokens. In the future, Synthetix stakers will only receive rewards from transaction fees, and the protocol will introduce a buyback and burn mechanism after the Andromeda upgrade is deployed on Base.
The rationale behind the proposal released by Synthetix founder Kain Warwick is that inflation becomes less effective over time than it was initially implemented to incentivize liquidity and bootstrap the protocol. In addition, the recently proposed buyback and burn mechanism would be counterproductive if inflation persists.
The Synthetix team said that with the launch of the Andromeda upgrade, SNX will become a deflationary asset. Half of the transaction fees generated from Andromeda will be used to purchase and destroy SNX tokens, and stakers will receive the other half of the fees as rewards.
