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Synthetix network

Synthetix Network (SNX)


Synthetix is a derivatives liquidity protocol built on Ethereum, enabling the creation and trading of synthetic decentralized assets. Founded in 2017 by Kain Warwick in Sydney, Australia, the platform was initially launched under the name Havven. These synthetic assets, known as Synths, are ERC-20 tokens designed to replicate the price movements of external assets. They are collateralized by the Synthetix Network Token (SNX), allowing for the issuance of Synths when SNX is locked into a contract.

In November 2020, Synthetix introduced the ability to trade Brent Crude Futures Contracts on its platform using a Synthetic Oil token (sOIL), backed by data from the Intercontinental Exchange via Chainlink. The platform also includes a short crude oil futures listing with the ticker symbol $iOIL. Additionally, Melon (now Enzyme Finance) announced support for Synths on its protocol, expanding the use of synthetic assets like fiat currencies, commodities, and cryptocurrencies.

Ticker SNX
Category Decentralized Exchange (DEX)
Website https://www.synthetix.io/
Twitter @synthetix_io
Reddit https://www.reddit.com/r/synthetix_io/
Contract Addresses
ethereum 0xc0...6fCopied!
base 0x22...66Copied!
near-protocol c0...arCopied!
optimistic-ethereum 0x87...b4Copied!
huobi-token 0x77...daCopied!
polygon-pos 0x50...8aCopied!
fantom 0x56...dcCopied!
harmony-shard-0 0x7b...d2Copied!
avalanche 0xbe...9bCopied!
energi 0xa2...29Copied!

Synths

Synths provide access to a wide range of assets on the Ethereum blockchain, including gold, Bitcoin, U.S. dollars, Tesla, and Apple. The Synthetix protocol aims to offer various trading features such as binary options and futures. Synths track the price of underlying assets, allowing holders to gain exposure without owning the actual assets or relying on a custodian, supported by a 750% SNX collateral ratio.

Synthetix DAO

The Synthetix protocol is governed by several decentralized bodies, including the Spartan Council, Treasury Council, Ambassador Council, and Grants Council, all elected by SNX stakers. Governance involves proposals for protocol changes, implemented by Synthetix Core Contributors.

Spartan council

The Spartan Council (SC), a key component of Synthetix's governance, consists of eight elected members who oversee the protocol. They review Synthetix Improvement Proposals (SIPs) and Configuration Change Proposals (SCCPs), coordinate with the protocol DAO, and conduct governance meetings. SC members manage key responsibilities like signing keys for security bonds and engage in various protocol-related activities.

Treasury council

The Treasury Council manages resources to support Synthetix's growth, overseeing the treasury for protocol costs, contributor stipends, ecosystem incentives, and more. They use a multi-signature system to ensure financial stability and strategic resource allocation.

Ambassador council

The Ambassador Council promotes Synthetix within the DeFi ecosystem, focusing on governance and partnerships. They seek influence in beneficial protocols, collaborate with integrators, and engage with the community through Spartan Town Halls on Discord.

Grants council

The Grants Council distributes funds for public goods through grants, bounties, or prizes. It prioritizes projects that add value to the community, focusing on impact rather than profit.

Synthetix v3

Synthetix v3 was deployed on Optimism and Ethereum Mainnet in February 2023 after an extensive audit. Its main function is to create a collateralized debt position serving as a dollar-denominated stablecoin for use in integrated markets. Liquidity Providers (LPs) can delegate collateral to pools, mint sUSD, and back derivative markets. The system supports a flexible incentivization structure, with rewards distributed based on custom rules.

In July 2023, Synthetix integrated Chainlink's Cross-Chain Interoperability Protocol (CCIP), allowing V3 sUSD to move between Ethereum and Optimism and potentially other EVM-compatible chains with council approval.

Perps

Synthetix Perps is a decentralized perpetual trading protocol built on Optimism, offering users efficient trading with low fees. The platform supports integration by various protocols and utilizes off-chain oracles for capital efficiency. It allows up to 50x leverage on over 40 assets and introduced Worldcoin (WLD) perpetual futures in August 2023.

Technology

Synthetix's infrastructure includes smart contracts and incentives to maintain Synth prices, with SNX acting as collateral. This mechanism enables seamless conversion between Synths without liquidity or slippage issues, supporting use cases like trading, loans, and remittances.

Synth pegging mechanism

Synth pegging involves maintaining liquidity and stability between Synths and other assets. The system uses arbitrage, liquidity pools, and auctions to minimize deviations from the peg and ensure stability.

Synthetix tokenomics

Initially focused on the Havven stablecoin, Synthetix transitioned to synthetic assets. The SNX supply has increased significantly since 2019, with a current structure allowing for gradual inflation.

Funding

Synthetix secured $12 million in February 2021 from investors like Coinbase Ventures and Paradigm. In March 2023, DWF Labs invested $15 million in SNX, further integrating Synthetix's perpetual futures into their trading operations.