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Synthetix (SNX) trading volume overtakes GMX, but is the DEX token rally sustainable?

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Synthetix weekly trading volumes surpassed $1 billion, overtaking decentralized derivatives exchange GMX to become the second-most active platform.The trading volume data from Token Terminal shows that Synthetix did more than twice the trading of GMX in the seven-day period starting May 17, thanks to Optimism (OP) token incentives for perpetual swap traders.

The Synthetix (SNX) token has encountered resistance at the $2.50 level after gaining around 10.3% in the last seven days, per CoinGecko data.On the other hand, GMX and dYdX are experiencing a decline in trading activity, while their native tokens are eyeing bearish targets based on technical levels.Synthetix offers perpetual futures contracts on layer-2 rollup Optimism via a decentralized application called Kwenta.

The Synthetix community approved a proposal to distribute 3.65 million OP tokens, worth around $5.7 million, as rewards to Kwenta users based on their trading activity and amount of SNX staked for 20 weeks starting in April.Kwenta’s usage has spiked since the March 2023 announcement, per DefiLlama data for Synthetix users, suggesting that it could be partly due to OP token rewards.According to the Dune dashboard made by data analyst Gunboats, every $1 in fees spent on Synthetix perpetuals earns $1.27 in OP incentives.

Traders can earn the difference of $0.27 per dollar by simply placing trades on both the short and long sides to cover for trading risk and earn the OP incentives.The total value locked (TVL) in Synthetix has remained consistently around early 2023 levels at around $430 million, which suggests that new money is yet to flow into the ecosystem.

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