Synthetix

Synthetix (SNX) is a decentralized protocol that provides exposure to both crypto and non-crypto assets.

What is Synthetix? 

  • Synthetix (SNX) is a decentralized protocol that provides exposure to both crypto and non-crypto assets. As an Ethereum-based DeFi exchange, it offers liquid synthetic assets.
  • It opens up the world of DeFi derivatives trading to capture the price movements of various assets and has transitioned to the Optimistic Ethereum mainnet to help reduce the gas fees on the network and lower oracle latency.
  • SNX tokens are used to create Synths – which are derivative securities used to track the price of other assets, as minted collateral. This gives them exposure to the underlying assets, without having to hold any of the underlying. 
  • SNX executes trades on a P2C (peer-to-contract) basis, meaning that the exchange has no order books and the trades are run against a smart contract. This removes counterparty risks and slippage.

Key Metrics

TickerSNX
Token NameSynthetix
Token Type/ProtocolERC-20
Total Token Supply215,258,834
Current Circulating Supply See Coinmarketcap
Market CapitalisationSee Coinmarketcap
Token Creation DateSeptember 2017
Can it be mined?No

Who is behind Synthetix? 

Synthetix was launched by Kain Warwick, a non-executive director at the blueshyft retail network, under the name Havven (HAV). About a year later the company rebranded to Synthetix. 

Besides Warwick, the founder team also consists of the project’s CEO, Jordan Momtazi, the COO Peter McKean, and the CTO Justin J. Moses.

What is the purpose of Synthetix? 

Synthetix’s purpose is to broaden the cryptocurrency space by introducing non-blockchain assets, providing access to a more robust financial market.

Insights:

  • All Synths (synthetic assets) can only be minted when SNX holders stake their SNX as collateral. In execution, their SNX is effectively locked up in a smart contract.
  • Synthetix uses something known as  Oracles to accurately track the price of underlying assets. As an example, sBTC (the Synth form of BTC) will use Chainlink to aggregate the price of BTC from a variety of sources to show on the Synthetix Exchange.
  • Synthetix is a decentralized exchange (DEX) and a platform for synthetic assets. The protocol is created to expose users to the underlying assets via synths, without having to hold the underlying asset.
  • Users are allowed to trade and exchange synths, as well as to stake the pool where holders can stake their SNX tokens and are rewarded with a share of the transaction fees on the Synthetix Exchange.
  • The Synthetix network is secured through proof-of-stake (PoS) consensus. Synthetix holders stake their SNX and earn returns from the network fees.

Risks:

  • Synthetix is built on Ethereum, consequently it has high gas fee despite the help of Optimistic Ethereum mainnet.
  • Disbursement rate is low because 85% of the supply is held by whales and investors, meaning the concentration of SNX is fairly concentrated amongst big players.
  • The project is still in development which poses certain risks that might occur in the future, as well as its potential regulatory changes.

News and Updates:

  • Synthetix, together with other 5 crypto-companies, has donated $250,000 to aid efforts to upgrade the Ethereum blockchain in order to strengthen and further innovations taking place on Ethereum.
  • Based on ambcrypto.com, price action pictured a lateral tendency over the first week of August,2021 as the price oscillated between $9.50 and $9.52. At press time, it was valued at $9.50 after SNX dropped by 5.7%. 
  • Synthetix proposed DAO-first capital formation to complete the founding round aiming to enable the project to establish token holder-based governance using a Decentralized Autonomous Organization much sooner than going through legal structures and processes.
  • In late 2020, core contributors at Synthetix began to seek an external team to develop a binary options trading platform that would become Thales, which is funded by SynthetixDAO.

Community & Whitepaper Links:

Disclaimer  

All investments are speculative and involve substantial risk and uncertainty. Investors should understand the nature of digital assets including the terms of return and the risk of assets. We encourage investors to fully understand the assets and the risk associated with them prior to making any investment.

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