Is Synthetix Network Token (SNX) A Good Investment? In-depth Analysis and Near to Longer-Term Expectations
Is Synthetix Network Token (SNX) A Good Investment? In-depth Analysis and Near to Longer-Term Expectations

By CryptoBoomer | Investments | 2 weeks ago


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The world of crypto has been experiencing plenty of ups and downs. 2017 was considered the best year ever due to the crazy pump of altcoins here and there. Some altcoins successfully gained a 10,000% increase or even more within just a few months.

However, crypto space is not all rainbow and sunshine. What goes up must come down. The crypto space did go down in 2018, and they crashed pretty hard. Many people were left wondering what could trigger the next bull run like in 2017, and so far, they haven’t found the correct formula yet.

That being said, analysts have predicted that DeFi (decentralized finance) might as well be the next big thing and could potentially trigger the next bull run that everybody has been desperately waiting for.

Synthetix Network is one of those DeFi projects that is being built on top of Ethereum. The good thing is that Synthetix is not just an average project, but it’s actually the fastest-growing DeFi protocol in 2019. Now, here’s the most important question, is it worth our money to invest in Synthetix Network Token (SNX)? Let’s find out together!

Synthetix Network - Summary

Synthetix Network is an Ethereum-based DeFi protocol that allows the issuance of synthetic assets that can represent different types of assets, such as fiat currencies, commodities, precious metals, other cryptocurrencies, and many more. 

These synthetic assets (called Synths) are collateralized by the native cryptocurrency of Synthetix Network, the SNT, which would be locked in the smart contract to enable the asset issuance on the network.

You can think of the concept like how MakerDao works with its DAI issuance. The basics are pretty close, but Synthetix Network allows the creation of different assets, instead of a single stablecoin. 

Synthetic platform itself was first launched as a stablecoin project that they called as Havven, with the native cryptocurrency that they called as Havven Token (HAV). At the beginning of their existence, the Havven protocol was able to enable the creation of nUSD (their own version of stablecoin), but they understand the DeFi potential was much bigger than just stablecoin.

The project was then rebranded from Havven to Synthetix in December 2018, alongside the protocol development to support various assets instead of just one stablecoin. 

The decision was proven to be correct, as Synthetix successfully became the fastest-growing DeFi on the crypto market, with nearly $200 million in locked USD value. For comparison, it started with just $1 million locked USD value.

The basic steps of Synthetix can be divided into three different steps. The first step is to lock SNX (Synthetix Network Token) as collateral to stake the system. And then, the network would mint the Synths, which will be depending on the value of the locked SNX. 

The last step would distribute the fees that were generated on Synth trades to SNX token holders as a form of reward for staking the system. 

As for the Synths themselves, they can be any kind of asset, such as fiat currencies, other cryptocurrencies, stocks, indices, commodities, or anything you think can be traded on Synthetix.Exchange.

There were 19 different Synths or sAsset as well as 11 different inverse Synths (iAsset) at the time his post was written (source).

Analyzing Synthetix Network Team

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The leadership of Synthetix Network - image source

When it comes to crypto investment, there’s one important thing to find out before you decide to invest. That thing is called analyzing the core team of the project. Why? Because when you invest in a cryptocurrency, basically, you believe in the future of the same coin. And who can help you to realize that future if not the team of the same project? 

So, how about the Synthetix Network Team? It’s important to acknowledge the founder and the leader of the entire project. He’s Kain Warwick, who is also the co-founder and CEO of blueshyft, a network with 1200+ retail locations around Australia, with a modern and extensible technology platform.

Interestingly, Kain Warwick is also the Advisory Council Member of Australian Digital Commerce Association (ADCA), since November 2017 until today. It’s claimed that the ADCA is the organization that represents Australian businesses that participate in the digital economy via the blockchain.

Meanwhile, the Chief Technology Officer (CTO) of Synthetix Network is Justin J. Moses, who has been with the team since September 2018. He’s also the tech advisor at Kain’s blueshyft since March 2016. Previously, he’s the Director of Engineering at MongoDB for more than four years.

Next, we have Jordan Momtazi, who acts as the VP Partnerships at Synthetix Network since August 2017. Jordan is also the Co-Founder of RelayPay, an Australian-based crypto payment gateway. Not only that, but Jordan is also known as the Consultant at blueshyft. 

Previously, he used to be the Director at Rebel Muse for 2 years, a women’s fashion boutique focusing on conscious consumerism and sustainable practices.

After Jordan, we have Clinton Ennis, who serves as the Senior Architect at Synthetix since March 2018. Impressively, he was the Architect Lead at JPMorgan from 2014 to 2016. He was also the Principal Consultant at Geronimo Labs, from August 2008 to June 2014.

Next, there’s also Garth Travers, who is the Communications and Project Manager with Synthetix. Besides his time at Synthetix, he’s also the Operations Support Officer at blueshyft for more than 4 years. 

After Garth, there’s Clement Balestrat, who is the dApp Engineer at Synthetix. Yes, just like most other main employees here, he’s also working at blueshyft. His position at blueshyft is a Full Stack Developer.

Another important person in the team is Jackson Chan, who serves as the Blockchain Engineer as well as the Senior Software Engineer in the Synthetix team. Previously, Jackson Chan was the Tech Lead at Incent Loyalty, a company that had developed incentive token system and crypto exchange on Waves blockchain.

Next, there’s Zoe Archer, who acts as the Graphic Designer of the Synthetix project. She’s also the UX/UI Designer and the Front-End Developer at blueshyft. In the beginning, she was the Customer Service Manager before she became Operations Manager. And then, she was promoted to be their Product Manager before she landed the UX/UI Designer and Front-End Developer role.

Last but not least, we have Sergey Vassilyev, who is the Full Stack Developer at both Synthetix and blueshyft. He’s been with the team since January 2018. Previously, he was the javascript developer at Readymag, from July 2012 to December 2017.

These names above represent the strength of this team. I must say Synthetix has a decent and strong team, and they are connected through blueshyft, which is also a successful startup in Australia.

Use Cases Of SNX

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Havven symbol (left) and Synthetix symbol (right) - image source

So, we are trying to analyze whether it’s worth it to invest in Synthetix Network Token (SNX), right? But, before we know the answer to this question, we need to know the exact use cases of SNX.

So, SNX tokens are actually used as a form of collateral when the Synthetix Network issues the Synths. The function of SNX here is like how MakerDao uses ETH and other cryptocurrencies as collaterals to issue DAI. 

Not only that, but users in the network can also stake their SNX tokens through a built-in dApp named Mintr, which directly interacts with the smart contracts inside the network. When someone who stakes his SNX tokens wants to get out of the system, he would have to burn his minted Synths to unlock his SNX tokens.

Last but not least, to encourage holding mechanism, Synthetix.Exchange generates fees, and these fees would be distributed to SNX token holders that stake into the system.

Partnerships

Synthetix Network also shines in the partnership section. Their biggest partners are other popular crypto projects from various industries.

One of the biggest partners is Chainlink, where Chainlink provided decentralized price feeds across the Synthetix trading platform. This partnership would also allow anyone to build and run oracle to get price feeds for the Synths.

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One of the most exciting partnerships is the one with Chainlink

Another important partnership announcement was the partnership with THORChain, a cross-chain liquidity protocol. With this partnership, SNX will be promoted on ASGARDEX as soon as THORChain launches on Ethereum blockchain. 

That means SNX token holders will be able to stake SNX and access pairings on the other chains that are supported by THORChain.

Next, there’s partnership with Dether, where it enabled Synthetix’s stablecoin on Dether app. This announcement was considered crucial because you can easily locate other buyers or sellers of cryptocurrency by using the app’s navigation feature.

Another cool partnership is the one with Elysian, where merchants can build customizable stores on the platform. With this partnership, Elysian users can use asset-backed stablecoin on Synthetix Network.

There are also some other partnerships that I don’t mention here, but I think the names above already represent how strong the partnership section of this project is.

Potential Roadblocks

Synthetix Network is a DeFi protocol with a bright future. If there’s any potential roadblock for Synthetix Network, perhaps it’s the centralization issue. As mentioned by some Ethereum enthusiasts on a reddit thread, assets that are issued on Synthetix Network are still “fully controlled” by the developers. 

They believe that the power is very centralized in the hands of the developers, and it’s like a disaster waiting to happen. The concern is legit because you don’t want to peg too many important assets into the network if you can’t control the Synths.

Another potential issue in the future is regulatory uncertainty. In many parts of the world, what Synthetix Network has been doing can be classified as securities. And they will become much more limited to grow if all their Synths become strictly regulated by the governments.

External Factor And SNX Price

We have learned all the basic fundamentals that can affect SNX price, but is it enough to make our decision? Unfortunately, not. When it comes to altcoin price, there’s one big external factor that you need to pay attention to. It’s called Bitcoin price action.

Yes, since the beginning of cryptocurrencies, Bitcoin price has affected altcoin price trends. When Bitcoin goes up, altcoin prices go up as well. When Bitcoin goes down, altcoin prices go down as well. It’ll continue to work like this for the foreseeable future.

So, if you decide to invest in SNX, make sure you pay close attention to Bitcoin price action.

Social Stats

Unlike other altcoins that got funded in early 2018, Synthetix Network does not list its Telegram channel on the website. Instead, it utilizes a Discord channel, which is still quite popular in the crypto community. Synthetix Network actually has plenty of user activities in the Discord channel.

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The current stats for Synthetix Discord channel

Synthetix also has a Twitter account and a Reddit page. However, they don’t have too many user activities in these two accounts. That’s ok, though, as the Discord channel is pretty decent.

Conclusion

Synthetix Network is a living proof that a DeFi protocol can become much bigger than other types of altcoin projects. It’s an interesting project, and it has grown so much in 2019 alone. They have a bright future despite the centralization concern that I wrote above needs to be addressed properly by the developers. Overall, SNX is a worthy investment.

What do you guys think about SNX? Let me know in the comments section. Also, check out my recently published articles here:

Is HYDRO A Good Investment?

Is NANO A Good Investment?

Is Kucoin Shares A Good Investment?


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