Synthetix is an Ethereum-based framework for issuing and trading synthetic assets. The SNX token is linked to a smart contract on the blockchain, allowing for the development of a synthetic. This allows any system participant to create a currency and then swap it for a different value. As a result, consumers can directly swap assets without the need for middlemen' assistance.
Where to buy Synthetix Network?
Synthetix Network Token (SNX) is an Ethereum token that powers the decentralized protocol for issuing synthetic assets Synthetix. Synthetic assets are created when SNX token holders deposit them as collateral using Mintr, a decentralized application for interacting with Synthetix contracts. The Synthetix protocol currently supports synthetic fiat currencies, cryptocurrencies, and commodities.
The easiest place to buy Synthetix Network is from traditional cryptocurrency exchanges. The list of major exchanges where SNX is traded are Binance, Huobi, Gate.io, Bittrex, KuCoin, FTX, and EXMO. You can see the full ranking of crypto exchanges with reviews here. If you don't want to trade, but just plan to fund your wallet, the easiest way to make transactions is through an exchanger, choosing the best rate and checking reliability at Bestchange.
Who created the cryptocurrency Synthetix?
Founded by Kane Warwick, Synthetix started out as a protocol called Havven, which raised around $30 million by selling 60 million HAV lexemes in 2018.
Havven's goal was to create cryptocurrencies that mimic the performance of money, such as the US dollar or the euro, in various blockchains, including Ethereum and EOS.
Havven rebranded as Synthetix in late 2018, broadening its mission to encompass the production of synthetic assets for cryptocurrencies and commodities.
The sale of SNX Framework Ventures tokens raised $3.9 million for Synthetix in 2019.
Synthetix was originally run by a non-profit fund, but was dissolved in June 2020 and replaced by three autonomous decentralised organisations or DAOs.
These DAOs are mechanisms through which SNX cryptocurrency holders can now vote on changes to the protocol and decide on its future.
How synthetic assets are generated?
Synths are ERC20 standard tokens that are linked to a specific external asset (fiat, stocks, cryptocurrencies). They allow the trader to work with market values without actually owning them.
Synotes can also be called derivatives in the Ethereum ecosystem.
They are generated as follows: the user sends the required amount of sUSD. With the funds received, a smart contract purchases a specific asset, which is later linked to the SNX. This is followed by sAAPL (Apple's stock synth), sXAU (synthetic gold), etc.
Synthetix's native Stablecoin is sUSD and its value is directly related to the US dollar, which the token is backed by. It is used to trade synths, although it is itself a synthetic asset. The maximum supply is limited to 142.4 million coins, but there are currently 258.3 million sUSD circulating online.
Synthetix trading platform
The tool itself was created to reduce the friction when switching between different assets, so that they are more accessible to everyone and there is no possibility of using different censoring tools. The Synthetix exchange differs from the others in several ways, for example: there is no order book, which allows you to get rid of the trading format that uses P2C contracts. This allows for zero slippage and indifferent chain trading with infinite asset liquidity all the way down to the total amount of collateral in the system.
The exchange is done without any counterparty involvement, because within the system, debt from one synth is converted into debt from another synth. It is the absence of an order book that allows the liquidity between synths to be brought to infinity.
Wallets for Synthetix
The cryptocurrency SNX operates on the ERC20 standard, which makes it possible to store the coin on any wallet that supports Ethereum. Browser-based versions of MetaMask and Trust Wallet are most commonly used for transactions, as they are simply more convenient for logging into the developer's official website, using coins for staking and other ways to make money. But you can also use the classic Trezor or Ledger hardware vaults or the larger multiplatform counterparts.
The platform is built on the PoS algorithm, which means that investments from blockchain participants will be required to validate transactions and make the network work. Stackers play a major role in the system as well. They are the ones who take on the 'debt' by creating the collateral nodes. Staking in Synthetix is a considerably more extensive issue than in other projects due to the nature of the system.
Depending on currency rates and intra-network supplies, total debt might rise or fall. The quantity of overall debt in the system is unaffected by the size of the nodes.
SNX Stackers is a pooled counterparty that participates on all exchanges at once. They, the networks, are the ones who take on the risk of general indebtedness. This is what they earn their fees for, maintaining overall liquidity. Their earnings are based on the amount of commissions set up in the system. Stackers are able to hedge risk by taking external positions that are not linked to the company itself.
Liquidity and stability must be maintained between the S synthetic token and the rest of the coin types utilized for trading income purposes in order to build the platform and create a pleasant trading environment. Incentives are required to encourage companies to invest their own assets, resulting in the smallest possible deviations from the peg.
Synthetic exchange rates are maintained in three ways:
Users generate debt by producing new tokens when they create SNX. If the market falls, they have the opportunity to buy back sUSD below par and burn it to reduce the amount of debt. The value of a stabelcoin is always equated to one US dollar.
- Seth pools liquidity through Uniswap
Maintaining liquidity should be rewarding, which is why Uniswap pools accrue earnings for invested funds to ensure a sufficient supply of tokens.
- SNX auction
A dFusion protocol is used to sell SNX assets for ETH, after which the resulting tokens can be used to buy other synthetic coins below the peg.
Before starting a transaction, SNX coins must be purchased on any trading platform and then transferred to a personal cryptocurrency wallet.
How to start use Synthetix in India?
To begin, you must first acquire SNX tokens. You can purchase them via a variety of space exchanges.
Make sure you move your SNX to your web3 wallet, whether it's MetaMask, Trezor, Ledger, WalletConnect, or Coinbase, after you've purchased them.
Visit Mintr once you have SNX in your web3 wallet. Mintr is a user-friendly tool that allows users to effortlessly develop Synths, administer SNX, and engage in the Synthetix ecosystem as a whole.
You'll be transported to the homepage after connecting your web3 wallet to Mintr. On the left, you'll see wallet information, and on the right, you'll see functionality options.
If you wish to mint sUSD, for example, you'll need to input the desired sUSD amount. Also, keep in mind that the guarantee need is 750 percent. $750 = 318.03 SNX at the time of writing, thus that's how much I'll have to pay to receive sUSD 100.
All you have to do is click "MINT NOW" after entering the desired amount of sUSD or whatever token you choose.
After you click "MINT NOW" you need to confirm the transaction in your web3 wallet. Once confirmed, your SNX is automatically staked and you will receive a prorated amount in US dollars or any synthetic asset you have created.
You can then start trading your synthetic assets on Synthetix as well as other exchanges that have synthetic asset trading pairs.
Borrowing opportunities in Synthetix
SNX coins only appear if SNX users have pledged tokens through the decentralised Mintr application, and the funds received would later be used to interact with the contracts. Currently, the collateral ratio is around 800%, but this may vary depending on community management mechanisms.
One of Synthetix's aspirations is to introduce an additional token that could be used as an alternative currency for collateral. The main focus is on classic Ethereum. This allows ETH to be used directly for collateral for SNX. With a collateral ratio of 150% creating ETH debt, stackers are able to earn that particular currency rather than sUSD stabltoken. Using Ether also allows you to get out of participating in the pooled debt system. But there is a disadvantage to such an investment: using ETH, the stacker will not receive any commissions or rewards, as they are not risking anything.
Ensuring sufficient collateral is one of the main engines of a marketplace. Without it, users will have no incentive to maintain a sufficient collateral ratio, which will not allow them to absorb large price shocks.
The C-coefficient of each member in the system will fluctuate if the SNX value changes. Users will not be able to receive payment until the individual ratio is restored if the value deviates significantly from the norm. This is done either by minting (if there aren't enough coins) or by burning (if there aren't enough coins) (if there are too many tokens).
So, how are you going to make money? There are two types of rewards you're going to get here:
- SUSD rewards from Synthetix exchange commissions.
- SNX Inflation rewards.
These rewards must be requested manually on a regular basis (each payout period usually once a week), otherwise they will be returned to the Synthetix pool and passed on to other players. And remember, the guarantee amount must be 750% or higher, otherwise you won't be able to get the rewards.
Because SNX is a cryptocurrency, its value is determined by the open market. As a result, the number of synths that can be in circulation can change as the price of SNX goes up or down.
For example, if the price of SNX increases, the system issues SNX tokens that are not needed to guarantee previously created synthesizers. These SNX tokens can be locked back into the platform to create new synthesizers.
For example, suppose the price of SNX doubled. This means that half of the original $1,000 blocked SNX can be released. The user can use that SNX to make sUSD synths for $500 more.
This means that the more SNX you pay, the more synthesizers you can make.
Another intriguing aspect of Synthetix is how it evaluates synthesizers using oracles, which are pricing channels.
The first synthesizer, say sUSD from our previous example, "burns out" or collapses first when moving between synthesizers.
Advantages of Synthetix:
- Access to synthetic assets is as easy as possible
- No orders when trading
- Cooperation with large DeFi projects like Curve
SNX worth’s trying as synthetic assets and decentralized exchanges will become more common in cryptocurrency!