Evolving the Syndicate Network: From Passive Staking to Infrastructure Markets

Today, Syndicate Labs is outlining a proposal to transform SYND from a passive staking token into productive capital for infrastructure coordination—the fuel that powers horizontal blockchain scaling.

A governance proposal to make SYND the economic engine of horizontal blockchain scaling

The Syndicate Network launched with a bold vision: eliminate infrastructure lock-in and give communities true ownership of their networks. Syndicate Mainnet delivered on that promise at the infrastructure layer and communities like AminoChain, Clankermon, and Stadium are able to control their sequencing, governance, and economics without intermediaries.

Now, Syndicate Labs is proposing to take the next step and evolve the SYND tokenomics to match that ambition at the economic layer. This post outlines potential solutions to challenges we've identified with the current tokenomics model and introduces the high-level framework for SYND v2.0. Over the coming weeks, we'll work with the community to refine these proposals before submitting a formal governance vote to the Syndicate Network Collective on Agora.

SYND tokenomics now

The Syndicate Network launched Epoch 0 as of 23:00 UTC September 30th beginning the bootstrapping staking phase. At that time, staking went live on Commons Chain in basic form with 100% of emissions flowing to the Base Pool. Currently, every staker earns rewards pro rata based on their stake size and how long they remain staked during the epoch. This phase was designed to reward early participants, circulate SYND back into the community, and validate the basic staking architecture before voting and allocations toward appchains would go live in the next phase.

As a refresher, the SYND staking system introduced a novel design to align token holders with appchain success. When fully live, SYND holders should be able to actively choose which appchains to support through directed staking. This creates a direct connection between stakers and the chains they back.

The system works through a three-pool emissions structure: a Base Pool that rewards all stakers proportionally, a Performance Pool that mirrors appchain success back to their supporters, and an 

Appchain Pool that funds chains based on network activity. When an appchain generates more transaction fees and attracts more stakers, both the chain and its supporters earn more. This design seeks to create alignment. Stakers have incentive to back promising chains and chains have incentive to attract committed supporters. Please refer to the announcement blog post and litepaper for more details.

As of this post, the next phase has not been implemented and this proposal outline will influence how and when the system could be fully implemented.

Why we should evolve SYND tokenomics

When Syndicate Labs launched SYND, the goal was to build a system that aligned stakers with appchain success. Stakers would back specific appchains and earn emissions based on network activity. This was designed to create the right directional incentives, but the weeks since launch have revealed areas where the economics could evolve to more fully realize that vision.

Emission dynamics don't match network demand

Under the emissions schedule, the network emits 1.67M SYND per 30-day epoch. This level of emissions far exceeds the network’s current usage and fee generation. Since the Syndicate Network should primarily earn fees through demand for the token itself when used for appchain sequencing transactions, emissions should be scaled back to roughly align with fees. The network is still in its infancy and needs time to onboard a critical mass of appchains. In the meantime, the network should balance token inflows and outflows, and as fees grow, emissions should be increased.

Short-term incentives with limited long-term alignment

With only 30-day epoch-based participation and minimal commitment requirements, SYND staking is currently a short-term game. Token holders have no mechanism to demonstrate long-term conviction, and the system provides no way to reward those who want to commit to the network's multi-year vision. This creates a mismatch between the long-term nature of appchain infrastructure build cycles and the short-term nature of token holder participation.

Application chain infrastructure coordination remains unsolved

Perhaps most critically, appchains need RPC nodes and sequencer nodes to operate, but the network provides no mechanism to coordinate infrastructure providers with chains. We've relied on centralized solutions and direct partnerships as temporary measures, but this doesn't scale and it doesn't align with the vision of community ownership. The network needs to use its economic resources—emissions—to solve infrastructure coordination.

These challenges are the natural evolution of a young network learning what works in practice. The network design has focused on aligning stakers and chains, and this future proposal will seek to deepen that flywheel and align infrastructure providers as well. 

The Vision: SYND as a productive capital

When we launched SYND via Aerodrome in September, we pioneered a new DEX-first launch model with Aerodrome. Through this launch, we got hands-on experience with how the Aerodrome protocol works, and just as veAERO serves as productive capital to recruit liquidity for the MetaDEX, SYND should become productive capital to help appchains provision their own node infrastructure. This is critical to making the Syndicate Network's horizontal scaling vision work.

The core inspiration comes from Aerodrome's proven veNFT model, itself inspired by Solidly, Curve, and others. In Aerodrome, users lock tokens for extended periods to receive vote-escrowed positions (veAERO), giving them voting power to direct emissions toward liquidity pools. Pools compete for these votes by offering incentives (typically the project’s native token), and liquidity providers earn from both emissions or trading fees. The system creates a self-reinforcing market where capital flows toward productive deployment.

This proposed upgrade applies this model to appchain infrastructure coordination. Instead of liquidity pools, the network will introduce node pools where appchains specify their node requirements. Instead of liquidity providers, it will have RPC and sequencer node operators. Instead of trading fees, it will have transaction volume and network usage. The economic mechanics are parallel, but the outcome is different: rather than coordinating capital for trading liquidity, SYND could coordinate capital for node infrastructure.

This transformation makes SYND central to the network's scaling story. As more appchains launch, they will compete for infrastructure funding through incentives and demonstrated traction. As node operators deploy infrastructure, they earn compensation based on measured performance. As SYND holders lock tokens for extended periods, they direct resources toward promising appchains and share in their success. The system creates market-driven natural selection where successful appchains attract infrastructure, high-quality infrastructure enables appchain success, and appchain success drives incentives (external tokens) and fees (SYND) to the Network.

Draft governance proposal framework 

The future governance proposal will focus on three fundamental changes that work together to create sustainable infrastructure markets. All changes proposed herein are subject to change ahead of the official proposal and will require certification by the Syndicate Network Collective prior to implementation.

Vote-escrowed NFT (veNFT) locking system

We're proposing to implement a veNFT governance system (or similar system) where SYND holders lock tokens for periods ranging from 1 week to 4 years. Lock duration directly determines voting power: a 4-year lock provides maximum voting power (1:1 ratio with locked SYND), while shorter locks provide proportionally less. Only locked positions, represented as tradeable NFTs, would be able to vote in governance and direct emissions.

This change ensures long-term aligned participants gain more influence over network direction through higher voting power. NFT representation enables secondary markets for locked positions, providing liquidity without compromising commitment. Voting power decays over time as lock periods approach expiry, ensuring that governance power reflects active, future-facing commitments rather than past contributions. Users can add tokens to existing positions or extend lock duration to maintain or increase voting power.

Additionally, the NFT will contain reputation data that will track key stats for NFT holders. These attributes may include:

• Total days locked
• Appchain voting history
• Appchain usage

This NFT will bridge staking, appchain usage and governance, in service of our wider decentralized vision. From an implementation level, this NFT may also be used to token-gate customized experiences in a similar manner to existing ERC-721/11155 implementations.

Infrastructure markets and node coordination

The proposal will outline the creation of infrastructure markets through node pools where appchains coordinate with node operators all tied together by SYND. When an appchain launches, it would be able to create infrastructure pools and define specifications for its RPC and sequencer node requirements. The appchain would then decide what percentage of its emission allocation to pass through to node operators versus retaining for its own operations. It would compete for emissions by drawing votes with deposited incentives, typically in the project’s native token.

High-performing nodes earn more through objective measurement systems: RPC nodes are measured via a Universal Gateway that tracks request volume, latency, uptime, and accuracy (or similar metrics), while sequencer nodes are measured via the existing cross-chain gas tracking system that monitors SYND fees collected at the L2 level (or similar metrics).

This should create market-driven infrastructure coordination. Appchains that underpay for infrastructure experience less support from node operators, leading to reduced transaction volume and ultimately fewer votes from SYND holders. Appchains that provide competitive compensation attract high-quality operators, deliver better user experiences, and earn more support from governance participants. The SYND-based system naturally filters out appchains that cannot generate sufficient value to justify their infrastructure costs, but appchains can offset this with incentives to voters (in hopes of winning consistent emissions).

Node operators can enter and exit pools freely with no slashing penalties. Poor performance simply results in lower earnings through the "earn what you serve" model. This avoids the complexity of dispute resolution while maintaining strong incentives for quality service.

Reduced and rebalanced emissions

The upcoming proposal will suggest a substantial near-term emissions reduction. While the exact number will be confirmed ahead of proposal submission, we expect to propose something close to reducing total emissions by approximately 82%, from 1.67M SYND per epoch to 300K SYND per epoch initially. The epochs should remain 30 days long as appchain infrastructure cycles are relatively long-term.

The emission reduction will likely be combined with a proposed rebalancing of the three emissions pool structure. The Base, Performance, and Appchain pools may all be rebalanced pending modeling and simulations ahead of proposal submission. Possible rebalancing may shift weight toward rewarding network usage through the Performance Pool while giving appchains the resources needed to coordinate infrastructure through the Appchain Pool. Combined with reduced total emissions, any rebalancing should create sustainable economics where emissions can be offset by fee burns and network growth.

Finally, we expect to propose a mechanism for compounding emissions earned from staking without claiming each epoch.

How it all would fit together

The revised system being proposed should help create a flywheel where each participant's success drives value to others:

Appchains deposit incentives into gauges to attract veNFT votes. They receive emissions from the Appchain Pool based on vote allocation, which they use to compensate node operators directly, or retain. High-quality infrastructure enables better user experiences, generating more transaction volume and fees.

SYND holders lock tokens to create veNFT positions, gaining voting power proportional to lock duration. They earn baseline rewards from the Base Pool, performance-based rewards from the Performance Pool based on their voted appchains' activity, and can claim gauge incentives from appchains they support. Long-term locks provide more voting power and higher emissions.

Node operators deploy RPC and sequencer infrastructure to serve appchains with competitive compensation. They earn SYND emissions from appchain allocations based on measured performance. High-performing operators serve more requests and collect more fees, earning proportionally more rewards.

Users interact with appchains that have quality infrastructure funded through this coordination. Their transaction volume would generate fees controlled by the Syndicate Network Collective, and additionally would benefit veNFT voters through the Performance Pool creating a direct link between network usage and participant compensation.

This design should create market-driven natural selection. Appchains with genuine user demand generate fees that reward their voters through the Performance Pool, attracting more votes and enabling better infrastructure compensation. Appchains without real traction cannot sustain competitive gauge incentives or generate meaningful performance rewards, leading votes to flow elsewhere. Infrastructure capital should naturally concentrate on productive deployments.

Governance proposal timeline and community input

This proposal will represent a significant evolution in the SYND tokenomics, and as such Syndicate Labs intends to follow the Syndicate Network Collective governance process. We expect to submit the proposal as Syndicate Improvement Proposal 1 (SIP-1) in November once governance goes live. The proposal will be posted on the SNC Agora forum and will include an updated litepaper.

We welcome community feedback and suggestions before that submission, and then after posting as well, especially by SYND token holders.

Why this matters

The Syndicate Network launched with the promise that communities could own their infrastructure without lock-in. Syndicate Mainnet delivered on that promise at the technical layer: programmable sequencers, onchain ordering logic, community-controlled economics.

The SYND 2.0 proposal should deliver on that promise at the economic layer. By transforming SYND into productive capital for infrastructure coordination, we hope to enable the infrastructure markets that horizontal blockchain scaling requires. Just as Syndicate Networks eliminates technical lock-in, SYND 2.0 should eliminate economic lock-in by creating competitive, decentralized infrastructure coordination.

This is how community ownership extends beyond smart contracts into the economic fabric of the network. When communities can coordinate infrastructure through market mechanisms, direct resources toward productive deployments, and share in the success they create, infrastructure truly becomes community-owned and mass scalable.

Join the discussion, review the litepaper, and help us finalize the proposal that will shape the Syndicate Network's economic future.

Learn More:

• Join the discussion in Discord 
• Review our documentation
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