A new little tutorial for people interested in Synthetix and wishing to stack their SNX to generate interest.
I will not present the Synthetix project in this article. You can find the white paper of the project by clicking on the button at the bottom right on this home page here.
The stacking part of the project is done using Mintr
Once on this page, you just have to connect the wallet on which you have your SNX. If you don't have one yet you can easily buy it via an exchange that offers it or by using Uniswap for example if you want to stay in the world of DeFi.
Once connected to the wallet containing the SNX you want to stack you will need to click the CREATE button (in red on the image above)
You will then need to decide how much SNX you want to stack. Unfortunately this process is not very explicit and you will be asked for the amount of sUSD you want to create. A collateral ratio of 800% is required. That is to say that you need 8 times more SNX (in $ value) than sUSD (which is more or less $ 1). In the example below, for example, I decided to stack around 800 SNX (at 0.8 $), which gives me 80 sUSD. if you make 766.13 x 0.8 = $ 612,904, which corresponds to 8 times 80sUSD.
If you are a little lost do not panic! when entering an amount of sUSD to create, this will tell you the amount of corresponding SNX. So if you want to stack 1000 precisely, you just have to change the number corresponding to the sUSD created in order to arrive at 1000 SNX.
Then every Wednesday, you MUST come back to this page and claim your rewards. By clicking on CLAIM (button framed in green on the image above). But beware ! to be able to claim your rewards it is necessary that your collateralisation ratio is equal to or higher than 800%. From a practical point of view. If the SNX price has increased (that its price increases) then your ratio will increase (in value you will have more than 8x more SNX than previously generated sUSD). On the other hand if the price drops, then your ratio will decrease. If we take the example of your 1000 SNX, when they were worth $ 0.80 when you stacked them, they may be worth only $ 0.50 at the time you want to claim your rewards and in this case the 800% ratio does will not be respected.
But do not panic. You can restore this ratio by destroying sUSDs that were created during the 1st step. When you create sUSD the first time, these sUSD correspond to your debt. That is to say the sum of sUSD which must always be 8 times less than the value of your stacked SNX. But when creating these sUSD (your debt) you also get the same amount of sUSD in your wallet. These sUSD allow you to "pay" your debt when your ration is less than 800%.
You are lost ? I think it's normal.
Basically: when you block your SNX, you are given a sum in sUSD which corresponds to 8 times less than the value of these SNX at the time of stack. The goal is that the value of your SNX is always 8x greater than this value. If it is not the case you must burn sUSD in order to restore the ration. So if for example the price of SNX decreases by half, the value of your stored SNX will decrease by half. and therefore you will have to pay half of your debt.
Once this ratio is again 800% you can claim your rewards by clicking on CLAIM (button framed in green on the image above). If your ratio was 800% or more no need to do this step.
Then click on claim your rewards. They will be blocked for 1 year. And you can only recover them after this period has elapsed.
This sacking is therefore relatively restrictive, because you have to come and claim your rewards every week, if you do not do so they will be lost. And you can only get them back after a year.
Also pay attention to the costs generated for each transaction. At the time of writing this article the fees are quite high. So if you only stacked a few SNXs, less than $ 1,000, I'm not sure it will be worth it. Indeed you have to pay around $ 5-6 to claim your rewards. So if you only earn a few SNX a week it is not worth it. When the costs go down it will be much more profitable.
If however you invest a larger sum. The APY is very interesting since it turns around 50% (not counting your transaction costs).
So if you bet on an increase in value over the long term, it can represent real interest, even by investing a smaller amount. It's up to you to make your calculation!