Synthetix (SNX) is a mechanism for issuing synthetic assets on the Ethereum network. Synthetic commodities such as gold and silver, synthetic cryptocurrencies, synthetic inverse cryptocurrencies, synthetic cryptocurrency indexes, and synthetic fiat currencies are all supported by Synthetix. The platform introduces non-blockchain assets into the crypto environment, resulting in a more developed financial sector.

It is an Ethereum-based technology that allows for the creation of synthetic assets. Synthetic assets, which are similar to derivatives in legacy finance, are financial products in the form of ERC-20 smart contracts known as "Synths" that monitor and give the returns of another asset without having you to retain that asset. Synths, which include cryptocurrencies, indices, inverses, and real-world commodities such as gold, may be traded on Kwenta, Synthetix's decentralized exchange (DEX). The Synthetix Network Cryptocurrency (SNX), Synthetix's native token, is utilized as collateral against Synths issued.

History

Kain Warwick debuted the network under the name Havven in September 2017. (HAV). After about a year, the firm changed its name to Synthetix. Kain Warwick founded Synthetix and serves as a non-executive director of the blueshyft retail network. Warwick worked on numerous other cryptocurrency initiatives before creating Synthetix. He also established Pouncer, an Australian-only live auction service.

Synthetix was initially administered by the Synthetix Foundation, a non-profit foundation located in Australia, but in 2020, authority was transferred to three decentralized autonomous organizations (DAOs). The protocol DAO is in charge of protocol updates and Synthetix's smart contracts, while the grantsDAO is in charge of funding community requests for public goods on Synthetix, and the synthetixDAO is in charge of funding businesses supporting the network's development.

How does it work

There are several ways to get started trading Synths. The first is to buy ETH on an exchange, then exchange it for sUSD on Kwenta (a dApp that allows trading on the Synthetix network), and then trade for other Synths like sBTC. The second approach is to buy SNX tokens on an exchange, stake them on Mintr, and then start trading them on Kwenta.

On Synthetix, all Synths generated by staking SNX tokens are backed by 750% collateralization ratios decided by community governance (and may be subject to change). Stakers must manually maintain their ratio on Mintr by minting sUSD if it becomes too high - or burning sUSD if it becomes too low. Users incur debt by staking SNX and minting sUSD, which indicates the amount of sUSD that must be burnt in order to un-stake their SNX. This, in turn, represents a fraction of all debt on Synthetix and is denominated in sUSDT, with debt increasing or decreasing in line with Synth supply and exchange rates.

Total supply and circulation

The total quantity of SNX tokens is 291,657,311. There are now 233,722,336 SNX in circulation. Synthetix raised 30 million USD through its Initial Coin Offering (ICO) by selling over 60 million tokens.