Synthetix (SNX) - a decentralized finance (DeFi) protocol that provides access to a wide range of cryptocurrencies on-chain. The protocol runs on the Ethereum (ETH) blockchain and offers users access to highly liquid synthetic assets (syntheses). Synthesizers track and deliver the performance of the underlying asset without requiring the asset to be held directly.
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Description of Synthetix (SNX)
Synthetix was originally created as a stablecoin project, called Havven. And only later it became a protocol for synthetic assets. The current Synthetix community pioneered many of the mechanisms that are considered the standard of the DeFi system.
Being one of the main components of DeFi on the Ethereum blockchain, the project will remain a key part of it for the foreseeable future, especially in light of the imminent launch of the second layer of the scaling solution. This is a protocol that allows the issuance of synthetic assets on the Ethereum blockchain. A synthetic asset can be thought of as a derivative that gives you the ability to access an asset without having to own it.
Almost anything that has a reliable quote stream can become a synthetic asset, or “synth”. It can be cryptocurrencies like BTC or ETH, valuable commodities like gold and silver, and fiat currencies like USD. There are even inverse synths that track the inversion of the underlying asset. With their help, traders can open short positions or hedge existing assets and yield farming positions. The main thing is that thanks to the project, traders can get access to certain assets that are not on the network. Synthetix also allows you to create indexes, such as the DeFi index, with which you can track the prices of multiple DeFi assets.
Protocol features
The protocol has appeared to provide users with the underlying assets through synthesizers without having to hold onto the underlying asset. What are the advantages of the project:
| Bargaining |
The platform allows users to trade autonomously and exchange synthesized assets. |
| Pool |
It also features a staking pool where holders can stake their SNX tokens and are rewarded with a share of the transaction fees on the Synthetix exchange. |
| Assets |
The platform keeps track of the underlying assets, using smart contract delivery protocols, called oracles. |
| Deposit |
Syntheetix allows users to trade synths seamlessly without liquidity or slippage issues. It also eliminates the need for third-party intermediaries. |
SNX tokens are used as collateral for synthetic assets that are being minted. This means that whenever synthetic assets are issued, SNX tokens are locked in a smart contract. Since launch, the protocol has shifted to the optimistic Ethereum mainnet to help to reduce network gas fees and reduce oracle latency.
Project cryptocurrency
The maximum supply of SNX - 212K coins, of which 114K SNX are in circulation as of February 2021. During the seed round and token sale phases, Synthetix sold over 60 million tokens and was able to raise $30 million. Of the total 100k coins, issued during the ICO, 20% was allocated to the team and advisors, 3% to rewards and marketing incentives, 5% to partner incentives and 12% to the foundation. The best cryptocurrency exchanges to trade Synthetix shares currently are:
- Binance;
- OKX;
- Bitget;
- CoinTiger;
- FTX.
The SNX token is compatible with the Ethereum ERC20 standard. The Synthetix network is secured by consensus and proof of stake (PoS). Cryptocurrency holders stake on their SNX and profit from network fees.
