Synthetix (SNX) is a DeFi (Decentralized Finance) project that allows users to buy and sell stocks, precious metals or metals with crypto assets. It differs from the traditional financial system in that it is decentralized.
The project, which was launched under the name Havven (HAV) by Kain Warwick in September 2017, started operating under the name Synthetix in 2018.
The aim of the project is to grow its ecosystem with non-blockchain-based cryptocurrencies by creating a stronger financial system. The Synthetix protocol also acts as a liquidity provider. Thus, in the Ethereum network, exchanges can be made with currencies, stocks and real money, as well as cryptocurrencies belonging to other blockchains. It may be one of the crypto money projects that can shape the future. SNX Coin is an Ethereum Blockchain based cryptocurrency.
The Synthetix (SNX) protocol aims to enable traditional financial systems to be adapted to blockchain technology and to avoid centralized management. The most important instruments of the traditional finance world are fiat currencies, stocks, precious metals and precious metals. When you want to trade with these instruments, you have to apply to an institution affiliated to the central structure.
Syntehtix concentrates on exactly this point. Thanks to the Syntehtix system, users can trade virtually at the same prices as these assets traded in the real world. It also has a stake pool where holders are rewarded with a portion of transaction fees on the Synthetix Exchange and can easily stake SNX tokens.
How Does Synthetix (SNX) Work?
Synthetix protocol, which provides liquidity for derivative markets, allows trading with related assets without owning the underlying assets. On the Ethereum platform, cryptocurrencies, currencies, stocks and commodities belonging to other blockchains can be exchanged with digital assets called synths, which are the equivalent of the underlying asset.
Assets supported by synths can have equivalents without having to own the originals.
Synthetix (SNX) holders can earn additional income by locking their SNX balances against synthetic Dollars. In exchange for the locked SNX, sUSD is generated and this Synth is used to provide liquidity on the platform. Revenues of clearing transactions on the Synthetix Exchange platform are paid weekly to SNX shareholders in proportion to their shares. Users can also earn stakes by locking SNX on Optimistic Ethereum, the second-level scaling solution for the Ethereum platform.
When a synthetic asset (Synth) is generated on the platform, SNX is entrusted to the smart contract as collateral. The platform monitors the market values of produced synthetic assets and collateral assets with so-called expert protocols. Thus, the prices of the Synths produced are equivalent to the market prices.
