Synthetix (SNX) is a decentralized liquidity provisioning protocol built on Ethereum and Optimism, serving as a backend liquidity layer for some of the most innovative protocols in the DeFi ecosystem. SNX is the native token of the Synthetix Network and has two main functions: staking and governance.

Synthetix enables the creation and trading of synthetic assets backed by stakers using SNX tokens. The collateralized SNX tokens are locked in a staking contract; in return, stakers receive rewards and market returns.

The liquidity provided by stakers allows for trading synthetic assets and perpetual futures at oracle prices, eliminating the need for traditional order books and counterparties. As a result, Synthetix's liquidity is cross-market composability, and fungible, and traditional slippage is eliminated.

SNX stakers receive a proportional share of the debt relative to their SNX stake, and their voting weight is quadratically weighted for everyone except the Finance Council. Voting occurs through the Synthetix Governance module, which is fully installed on-chain, allowing SNX token holders to participate in decisions about protocol upgrades, fee changes, collateralization ratios, and other essential matters. This creates a decentralized governance system in which the community can help shape the direction and development of the Synthetix Network.

The Synthetix platform allows users to access underlying assets through Synths without holding the underlying asset. The DEX platform enables users to trade with Synths autonomously and features a staking pool where holders can stake their SNX tokens and earn a share of transaction fees.

Synthetix uses smart contract price delivery protocols, known as oracles, to track the underlying assets, trade Synths seamlessly, and eliminate the need for third parties. SNX tokens are used as collateral for the synthetic assets that are minted. Synthetix currently supports two main types of synthetic assets:

Spot Synths

These synthetic assets represent the value of real assets such as cryptocurrencies, fiat currencies, and commodities. Users can take positions in various assets without holding the underlying assets.

Perpetual Futures (Perps)

Perps is a decentralized exchange for perpetual futures that utilizes Synthetix's liquidity as a counterparty for traders. It features high liquidity and low fees, and stakers (Perp LPs) are exposed to the combined performance of all traders while also earning trading fees. Financing rates and premium/discount mechanisms incentivize traders to balance the markets to become delta-neutral. Off-chain oracles reduce fees to 5-10 basis points, with risk management tools ensuring market neutrality in the long term.

Synthetix Governance

SNX token holders have the opportunity to participate in governing the Synthetix network. SNX stakers receive weekly rewards for collateralizing the network, which is paid as trading fees for traders and inflationary rewards in the form of newly minted SNX tokens held in a trust account for one year. Custodially held SNX tokens can be staked during this trust period, providing additional rewards for stakers.

The Synthetix project was launched in September 2017 by Kain Warwick under Havven (HAV), later renamed Synthetix. Kain Warwick is the founder of Synthetix and has experience in several other cryptocurrency projects.

Peter McKean, the CEO of the project, has over two decades of experience in software development. Jordan Momtazi, the COO of Synthetix, has several years of experience with blockchain, cryptocurrencies, digital payments, and e-commerce systems. Justin J. Moses, the CTO, has experience in technology and was a co-founder of Pouncer.

Synthetix raised $30 million during the seed round and token sale phase, with more than 60 million SNX tokens sold.

SNX Coin, the native token of the Synthetix network, has several unique features that set it apart from other cryptocurrencies. Here are a few key reasons why SNX could be a good investment:

Product

SNX Coin serves as a platform for synthetic assets, making it an attractive option for traders and investors who want to participate in the price movements of various assets without owning them physically.

Security

SNX tokens are used as collateral for the issuance of synthetic assets. This ensures that the total value of circulating synthetic assets is always backed by the locked SNX tokens, which helps to over-collateralize the system and reduce counterparty default risks.

Energy Efficiency

Synthetix utilizes a Proof-of-Stake (PoS) consensus mechanism, which is more energy-efficient compared to the Proof-of-Work (PoW) consensus used by many other cryptocurrencies.

There are several reasons why the price of Synthetix Network (SNX) could increase in the future:

Increasing Adoption and Usage

As more users and traders utilize the Synthetix Network, the demand for SNX tokens could rise and increase the price.

Expansion of Synthetic Asset Offerings

Synthetix has expanded its range of synthetic assets, which could attract more users and traders to the platform and increase the demand for SNX tokens.

Reduced Gas Fees

Synthetix recently transitioned to the layer-2 Optimism network to lower gas fees and increase transaction speeds, which could make the platform more attractive to users and traders.

Partnerships and Collaborations

Synthetix has already partnered with several other projects and platforms, such as Curve and Ren, which could help increase the adoption and usage of the Synthetix Network and boost the demand for SNX tokens.

Positive Developments and Updates

The Synthetix team continues improving the platform, regularly releasing new features and updates. Positive developments and updates could strengthen confidence in the project and spur demand for SNX tokens.

SNX is the native token of the Synthetix protocol and has the following functions:

Collateral

SNX tokens are collateral for the synthetic assets minted on the platform. SNX tokens are locked up in a smart contract whenever synths are issued.

Safeguard Mechanism

Synthetix placed a safeguard mechanism to prevent a fall in the prices of SNX tokens. This method has previously prevented a severe drop in the price of SNX crypto after Synthetix announced a considerable increase in the supply of SNX tokens.

Crypto Asset to Trade and HODL

Trade Synthetix token against other cryptocurrencies to capitalize on fluctuating market circumstances and volatility. You can buy or sell SNX on the BYDFi Spot Market or hold it for an extended period if you have faith in the long-term prospects of the Synthetix network. We recommend doing your own research (DYOR) before trading to reduce risk exposure.

Earn Passive Income on BYDFi

Use BYDFi Crypto Lending to generate passive income using your SNX holdings. Head here to lend liquidity in SNX to our platform over seven days, 14 days, or 28 days, and earn attractive daily interest.

Yes, SNX token holders have the ability to stake their tokens and earn rewards for providing liquidity to the Synthetix Network. Staking $SNX helps to create demand for the tokens. When you stake SNX, you are also eligible to receive rewards in the form of newly minted SNX tokens. These rewards serve as an incentive for stakers to provide liquidity to the network.

No, Synthetix (SNX) cannot be mined. SNX tokens are generated through inflationary rewards given to stakers who provide liquidity to the network by locking their tokens in the staking contract. The inflationary rewards are created by newly minted SNX coins held in custody for one year.

These rewards are then distributed to the stakers as an incentive for securing the Synthetix protocol and participating in its governance. The reward system aims to encourage coordination and growth within the network.