What is Synthetix (SNX)?
is a decentralized synthetic asset issuance protocol built on Ethereum. These synthetic assets are collateralized by the Synthetix Network Token (SNX) which when locked in the contract enables the issuance of synthetic assets (Synths). This pooled collateral model enables users to perform conversions between Synths directly with the smart contract, avoiding the need for counterparties. This mechanism solves the liquidity and slippage issues experienced by DEX‘s.
At the moment Synthetix supports synthetic fiat currencies, cryptocurrencies (long and short), and commodities. SNX
holders are incentivized to stake their tokens as they are paid a pro-rata portion of the fees generated through activity on Synthetix. It is the right to participate in the network and capture fees generated from Synth exchanges, from which the value of the SNX token is derived. Trading on Synthetix.Exchange doesn't require the person who is trading to hold SNX.
Why should I use Synthetix (SNX)?
You could use SNX if you believe that synthetic assets and decentralized exchanges will gain further adoption in cryptocurrency. Further, by staking and buying SNX, you could gain additional benefits, such as earning a percentage of network trading fees and newly minted SNX. The range of synths available may also make the platform attractive to traders. Therefore, the SNX token is useful if you believe crypto asset traders will continue to use Synthetix as a tool.
Who founded Synthetix?
Kain Warwick founded Havven and later adjusted the name to Synthetix. In 2018 they managed to raise about $30 million selling in 60 million HAV tokens. Their goal was to create cryptocurrencies that mimicked the performance of fiat currencies like the Dollar or Euro on several blockchains, including Ethereum (ERC-20) and EOS
. At the end of 2018, Havven rebranded to Synthetix, at the time expanding its goals to include the creation of synthetic assets for cryptocurrencies and commodities. One year later in 2019, Synthetix raised $3.9 million by selling SNX tokens to Framework Ventures. SNX was at first governed by a non-profit foundation, but it was dissolved in June 2020 and replaced by three decentralized autonomous organizations or DAO‘s. These DAO‘s are the mechanism by which holders of the SNX cryptocurrency can now vote on changes to the protocol and make decisions about its future.
Can I earn money with SNX?
Yes, you can earn money by trading & staking Synthetix (SNX)
. Buy low, sell high. Synthetix can be used to trade against other cryptocurrencies. In the past years, Synthetix price has increased enormously, but also had some huge losses. Always trade responsibly.