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Synthetix (SNX) – A Guide to the Token and Decentralized Finance Ecosystem
Synthetix (SNX) is a financial platform that offers a decentralized liquidity protocol, opening up the cryptocurrency world to a variety of investment opportunities. Based on the Ethereum and Optimism ecosystem, Synthetix enables the issuance of synthetic assets (Synths) that track the value of real-world assets without the need for physical possession. SNX is the protocol's key token, used to provide liquidity and issue Synths, which supports the development of a range of decentralized finance (DeFi) applications.
What is Synthetix?
Synthetix is a platform that builds a decentralized liquidity protocol that is accessible to various financial ecosystems. It hosts a number of protocols, such as Kwenta (spot and futures trading), Lyra (options), Polynomial (automated options), and well-known DEXs such as 1inch and Curve, which use liquidity provided by Synthetix. The protocol runs on the Ethereum blockchain and the Optimism network, with SNX, ETH, and LUSD as collateral. This unique structure allows access to various assets without having to physically own them.
How does Synthetix work?
Synthetix is based on a liquidity mechanism and enables the issuance of synthetic assets. Users can autonomously trade and exchange Synths, which are based on various assets such as cryptocurrencies, fiat currencies, commodities, and even indices. By staking SNX tokens, users can support the liquidity and collateralization of synthetic assets and earn transaction fees on Synthetix Exchange. The issuance of Synths is possible thanks to the collateral in the form of SNX tokens, which are locked in smart contracts.
It is worth adding that Synthetix has migrated to the Optimistic Ethereum mainnet, which has significantly reduced transaction costs (gas fees) and accelerated the network. There are also plans to introduce Perps V2 for low-fee futures transactions and Synthetix V3, which is to make the protocol fully decentralized.
Advantages and Unique Features of Synthetix
- Decentralized Exchange (DEX): Synthetix provides access to a wide range of assets via Synths, without the need for physical possession. This means that users have the ability to trade assets with minimal slippage and no liquidity risk.
- Staking and rewards: Users who stake SNX can earn commissions from transactions on the Synthetix Exchange and from the protocol's inflationary monetary policy.
- Oracle mechanism: Synthetix uses Oracle protocols to track the prices of underlying assets, ensuring an accurate representation of their market value in real time.
- Expanded DeFi Ecosphere: Synthetix is building the foundation for a variety of decentralized applications, from leveraged trading to options and futures, with support for platforms like Kwenta, Lyra, Polynomial, and many more.
A Brief Look at the Synthetix Ecosystem
- Kwenta: Enables trading of cryptocurrencies, forex and commodities with up to 50x leverage, based on liquidity provided by Synthetix.
- Polynomial: An automated options platform that allows you to trade leveraged futures contracts.
- Lyra: Operates as a decentralized options platform, offering a wide selection of financial instruments powered by Synthetix liquidity.
- Thales and Overtime Markets: Allows you to participate in the para-mutuel options and sports betting markets using sUSD.
Network Security and Consensus
Synthetix is based on the ERC-20 standard and proof-of-stake (PoS) consensus, which ensures the security of the network. SNX stakers are rewarded with transaction fees as well as inflationary rewards, which encourages them to continue supporting the network.
Basic Technical Data
- Current SNX price: $ 1.30
- Market Capitalization (Market Cap): $426,66M (6,16% increase)
- Volume (24h): $16,50M (4,57% increase)
- Vol/Market Cap indicator (24h): 3,85%
- FDV (Full Diluted Valuation): $427,21M
- Total supply: 328,19M SNX
- Circulating supply: 327,77M SNX
Token Allocation
- Our Team: 18,49%
- Public sale: 3,05%
- Private sale: 19,2%
- Staking: 49,91%
- Advisors: 0,77%
- Foundation: 4,62%
- Pre-sale: 0,87%
- Bounty/Airdrop: 1,16%
Sources and Links
- Synthetix Home Page: www.synthetix.io
- SNX Quotes: You will find it on exchanges such as Binance, Coinbase Pro, OKEx and Uniswap
- Blog and news: Synthetix Blog
- Documentation and statistics: SNX Documentation and Statistics
Summary
Synthetix is a major player in the decentralized finance market, offering comprehensive solutions for issuing and trading synthetic assets. With its liquidity, low fees, and growing ecosystem, Synthetix is becoming an attractive platform for both investors and decentralized application developers.
