Synthetix Network (SNX) Overview
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Synthetix is a decentralized trading protocol on Ethereum that allows users to trade synthetic assets, such as fiat currencies and commodities, without holding the actual assets. Users stake SNX tokens as collateral to mint and trade these assets, benefiting from features like zero fees and infinite liquidity. The platform aims to evolve by adding futures trading and creating synthetic stocks, enhancing its decentralized trading capabilities.
Synthetix Network (SNX) Overview
- 2. What is Synthetix (SNX) 2 A new type of exchange (aka trading protocol) for synthetic assets including fiat currencies, crypto, and commodities. Built on the Ethereum blockchain and powered by smart contracts. Instead of P2P trading, it is peer to pool through a contract. SNX is the collateral on the Synthetix decentralized network for all its assets. Users stake their SNX to trade. CryptoJBro.com
- 3. Meaning of “Synthetic” 3 Something artificial created to mimic a natural item or substance. Synthetic car oil is chemically made and not from crude oil out of the ground. Synthetic assets (synths) are representations of the real assets on the network, priced by combined feeds. CryptoJBro.com
- 4. Synthetix Phrases 4 ● Synths: The synthetic assets that track the underlying asset and are backed by SNX tokens (sBTC, sUSD, etc.) ● iSynths: Inverse Synths (crypto and index) for short ● Pooled counterparty: The total SNX that back Synths, so the trader doesn’t need a buyer / seller. ● Peer to contract: trades are done user to assest pool ● Staked: Locking up SNX to receive a synth ● Minted: When SNX is staked, the sAsset is created CryptoJBro.com
- 5. Synths and Pricing 5 Aggregate price feeds are brought on Ethereum chain. Underlying asset is tracked. CryptoJBro.com ● Forex: price feeds by Chainlink oracle network ● Commodities: Chainlink oracle network ● Crypto: supplied by Synthetix oracle but will change to a Chainlink feed ● Index: Chainlink, can be off-chain or custom made
- 6. Trading Synths 6 ● Smart contracts govern the pool of collateral assets. ● Everything is stored and run on Ethereum blockchain. ● ETH and SNX are traded with the asset pool ● When SNX are staked, the requested Synth asset is “minted” (is created) and sent to the wallet. ● The real asset is not held (only use is trading) ● Synths are being converted, in essence CryptoJBro.com
- 7. Benefits of Synthetix Trading 7 ● You don’t hold the underlying asset, so you can easily trade between them. (sBTC <-> sUSD) ● Decentralized, markets always open ● No middleman in the trade, fees stay at 0.3% ● Trades between user and pool with contracts= infinite liquidity, no pairings needed, no slippage ● Distributed pool of crypto increases privacy CryptoJBro.com
- 8. Synthetix Exchange 8 ● Long or short synthetic commodities ● Pairings are against sUSD ● sUSD = synthetic USD for long ● iUSD = inverse USD for shorting ● Trade Forex, cryptos, commodities, indices CryptoJBro.com
- 9. Mintr dApp 9 ● Connects with: Metamask, Trezor, Ledger, Coinbase, and WalletConnect ● For SNX holders to act on Synthetix network ● Lock up SNX to mint Synths (synthetic assets) ● Claim fees from network ● View history and balance ● Unlock SNX from escrow CryptoJBro.com
- 10. Difficulties with Synthetix ⬥ Only market orders right now. ⬥ STX coin fluctuates with the market, so a user might have to burn more than they began with. ⬥ Limited to gold and silver commodities (for now) ⬥ ETH gas is burned for now. ⬥ Trade price might be slightly different CryptoJBro.com
- 11. Synthetix into the Future ⬥ They would like to add futures trading ⬥ Large amount of testing and observing ⬥ Governance structure is needed for changes ⬥ Will be using the decentralized price feeds from Chainlink for all pricing. ⬥ Creation of synthetic stocks: Tesla and Apple CryptoJBro.com
- 12. Conclusion about Synthetix This is a game changer in the trading world by using a pool of assets, smart contracts, and not holding the real asset to trade. It is a leap towards a more efficient, automated, decentralized investment platform that is always open. CryptoJBro.com