Synthetix Defi Coin Review : A New Era of Financial Tool

About Synthetix Defi Coin

Synthetix Defi Coin is the backbone for derivatives trading in DeFi, allowing anyone, anywhere to gain on-chain exposure to a vast range of assets. Synthetix is a derivatives liquidity protocol on Ethereum that enables the issuance and trading of synthetic assets. Each synthetic asset (or Synth) is an ERC20 token which tracks the price of an external asset; for example, each sUSD token tracks the price of the US dollar (and unlike the other synthetic assets, is fixed at 1)

A wide variety of Synths exists within Synthetix, including fiat currencies, cryptocurrencies, commodities, and inverse indexes. In principle, the system can support any asset with a clear price and provides on-chain exposure to an unlimited range of real-world assets. The protocol will enable a variety of trading features including binary options, futures, and more.

Synthetix Defi Coin Finance Facts

How does Synthetix work?

Synthetix Defi Coin is otherwise composed of a smart contract infrastructure and a set of incentives that maintains Synth prices. It is underpinned by the value of the Synthetix Network Token (SNX). SNX acts as collateral; staking a proportional value of SNX is required to mint Synths. Stakers are rewarded for supporting the system with a pro-rata share of the fees generated by activity in the system. The value of SNX is thus directly connected with the usage of the network it collateralizes.

This mechanism allows Synthetix to support instantaneous, near-frictionless conversion between different flavors of Synths without the liquidity and slippage issues experienced by other decentralized exchanges. The resulting network of tokens supports an extensive set of use cases including trading, loans, payments, remittance, eCommerce, and more.

Tokens

SNX

Synthetix is the primary form of collateral backing the synthetic assets available in the Synthetix protocol. Its stakers are entitled to fees generated by Synth trades on Synthetix.Exchange.

Ether

A three-month trial allowing Ether to be staked as collateral in the Synthetix system has been completed and further trials will be run to test demand and implementation. The initial trial allowed holders to borrow against their staked at a 150% Collateralisation Ratio with an APR of 5%.

Synthetic assets (Synths)

Synthetix Synths are synthetic assets, minted against the value of cryptoassets staked as collateral. The values of Synths are provided by external price feeds fed on-chain.

Forex

Forex Synths track the price of forex currencies via price feeds supplied by Chainlink’s oracle network of distributed node operators. Many platforms, projects, and interfaces are already using the derivatives liquidity enabled by Synthetix.

Commodity

Commodity Synths track the price of commodities via price feeds supplied by Chainlink’s oracle network of distributed node operators.

Crypto

Crypto Synths track the price of cryptocurrencies via price feeds currently supplied by a Synthetix oracle. Crypto Synths will soon be transitioned to use Chainlink’s oracle network.

Index

Index Synths track the price of indices via price feeds supplied by Chainlink’s oracle network of distributed node operators. These indices can either be available in off-chain finance, such as, or they can be custom designed by the Synthetix community, such as .

Inverse (iSynths)

Synthetix inversely track the price of assets via price feeds supplied by either Synthetix’s oracle or Chainlink’s oracle network of distributed node operators. They allow traders to effectively take a short position, and are currently available for Crypto Synths and Index Synths.

Each iSynth has three important points: an entry point, an upper limit, and a lower limit. Its entry point is the price at which it is entered into the system.