WHAT IS SYNTHETIX(SNX)?
Synthetix allows users to bet on crypto assets, stocks, currencies, precious metals, and other assets in the form of ERC20 tokens. Synthetic assets or “Synths” copy the price of an asset in the “real world” and brings it onto the Ethereum blockchain giving that Synth all the properties of an ERC20 token.
Synthetic is a protocol that enables the insurance of synthetic assets on the Ethereum blockchain. SYNTHETIX supports synthetic commodities like gold and silver, synthetic cryptocurrencies, synthetic inverse cryptocurrencies, synthetic cryptocurrency indexes, and synthetic fiat currencies.
WHO INVENTED SYNTHETIX?
Much of Synthetix’ recent success can be attributed to its innovative token incentive model. SNX holders stake SNX in return for fees from the Synthetix exchange and rewards from the system’s inflationary monetary policy. To create a new Synth, more than 750% of the value of the Synth must be staked as SNX. The more SNX staked and locked as collateral, the less is available in the market and the more valuable the token becomes. The proof is in the price. The SNX token made a dramatic rise from $0.03 at the start of the year to over $1.30 at the end of 2019.
IS SYNTHETIX A GOOD INVESTMENT?
According to the SYNTHETIX analysis, the investment has a 3.1 out of 10 safety rank and +51.6 percent expected return with the cost going to $27.45.
WHERE CAN SYNTHETIX BE BOUGHT?
You can buy (SNX) on Gemini, Coinbase and Kraken.
WHAT CAN YOU DO WITH SYNTHETIX?
The Synthetix platform was primarily created for users to trade Synths. Holders of Synths can go long on an asset – bet the price will increase. Or they can short an asset – bet the price will decrease.
By staking SNX, holders can create new Synths, collect rewards, and watch their holdings grow. It could be why over 85% of the total SNX supply is currently locked up in the protocol.
Kain Warwick is the founder of Synthetix, a derivatives liquidity protocol on Ethereum. Synthetix has processed hundreds of millions of dollars in trading volume, mostly through its trading dApps, Kwenta and Synthetix.Exchange.
Synthetix started as a stablecoin project called Havven. Synthetix is now one of the biggest projects in DeFi with over $180 million worth of SNX tokens locked up in the protocol in December 2019.
HOW DOES SYNTHETIX WORK?
Synths use decentralized oracles, which are smart contract-based price discovery protocols, to track the prices of the assets represented, allowing you to hold and exchange Synths as if you actually own the underlying assets. In this manner, Synths provide exposure to assets normally inaccessible to the average crypto investor — gold and silver, for example — and lets you trade them quickly and efficiently.
To begin trading Synths, you can use two methods. The first method is:
1.Purchase ETH on an exchange
2.Exchange ETH for sUSD on Kwenta
3.Then exchange for other Synths, such as sBTC
Alternatively you can:
1.Obtain SNX tokens on an exchange
2.Stake them on Mintr, a decentralized application (dapp) created by Synthetix
3.Create synths and begin trading them on Kwenta.
You do not need counterparties when you exchange Synths, and instead convert them directly through a smart contract. This system mitigates counterparty risks and slippage, and ensures that there is sufficient liquidity for trading.
Synthetic assets are minted on the protocol using the Synthetix Network Token (SNX) as collateral. This locks into a smart contract. In early 2020, the protocol enabled the use of ETH as collateral in addition to SNX. Stakers can also earn a share of the 0.3% minting fees on the exchange by depositing SNX tokens as collateral to a fee pool.
Kwenta is a decentralized exchange (DEX) on which you can trade Synths (which can also be traded across a variety of DeFi protocols). Unlike other DEXs, the exchange does not have an order book and instead utilizes peer-to-contract trading, meaning all trades are executed against a smart contract. Chainlink oracles provide price feeds, which are used to set an exchange rate for each asset. A variable fee between 0.3% and 1% is levied on each trade and sent to a pool where it can be claimed by SNX stakers.
Synthetix was originally governed by the Synthetix Foundation, a not-for-profit foundation based in Australia, but shifted control to three decentralized autonomous organizations (DAOs) in 2020. The protocolDAO controls protocol upgrades and Synthetix’s smart contracts, while the grantsDAO funds community proposals for public goods on Synthetix, and the synthetixDAO funds entities advancing the network’s development.
CAN YOU STAKE SYNTHETIX?
SNX holders can lock their SNX as collateral to stake the system. Synths are mintef into the market against the value of the locked SNX, where they can be used for a variety of purpose including trading and remittance.
HOW DOES SYNTHETIX STAKING WORK?
Staking is the process that converts the SNX token into pooled collateral for the network. When an investor stakes their tokens, they're minting sUSD to be used to trade for synthetic assets, whether by the staker or another investor.
WHAT ARE THE BEST STAKING COINS?