In this 2022 Crypto Review, we’ll discuss the following topics about Synthetix Network:
- What is Synthetix Network?
- What is Synthetix used for?
- How do you Trade on Synthetix?
- What Blockchain is SNX on?
- How many SNX coins are there?
- Is SNX coin a good Investment?
What is Synthetix Network?
If you haven’t heard of Synthetix (formally Havven). Don’t worry, you’re not the only one. Developed and released on the Ethereum Network in 2018, Synthetix is a decentralized derivatives platform that enables users to mint various assets or buy perpetuals using the Synthetix Protocol. Each synthetic asset (or Synth) is an Ethereum token that tracks and represents the price of a real-world asset. All Synths minted on the network are backed by a large liquidity pool of SNX tokens.
Shortly after Synthetix entered the market, it was on a steady course to becoming the largest derivatives protocol in crypto, with more value locked in the protocol than runners-up Keep3r Network or dYdX. Synthetix remains the most used and largest liquidity pool for derivatives in Blockchain. Continued success for Synthetix is due, in large part, to the way the network operates. As development into Layer 2 technologies continues, Synthetix has already begun to issue a handful of Synths on Optimism and encourages users to use this new technology.
Previously, Synthetix had operated the Synthetix Exchange to manage all the different trading opportunities of the protocol. With regulators cracking down on derivatives markets over the past couple of years, the options previously available to Synthetix users have changed, and with it, commodity and equity contracts have limited availability.
This helps to remove a large part of the regulatory gray area that ended up putting exchanges like Abra in trouble with the SEC. In response to this, Synthetix dissolved its non-profit foundation, a mechanism that was initially designed to maintain governance of the Synthetix platform. With a foundation no longer part of Synthetix, three separate DAOs were created in its place, and new council members were voted in. This marked the moment Synthetix went from being highly centralized to becoming a somewhat decentralized protocol, showing that it’s possible for any centralized project to begin making the transition.
The DAO’s funding development and operations of the Synthetix Network are split into three parts to help decentralize the system.
- The SynthetixDAO will help issue funds to core contributors.
- A GrantsDAO will control the overall funding of the Synthetix ecosystem.
- The ProtocolDAO is in charge of handling upgrades and various configurations of the Synthetix protocol.
With this new system of operation comes a new security feature that allows ProtocolDAO members the ability to freeze the entire Synthetix system for a brief moment as many times as needed. This is meant as a failsafe, should they need to respond to any malicious attacks or bugs in the network. A part of the system that’s still considered a very centralized thing to do.
What is Synthetix used for?
The Synthetix protocol is used to execute trade orders against Smart Contracts for peer-to-peer trading and minting of synthetic assets. Instead of a centralized order book on a centralized exchange like Binance, the Synthetix protocol allows anyone to trade…
Head of Research Jesse is a passionate seeker of truth who enjoys educating others about Bitcoin. As a free thinker and 2nd amendment advocate, Jesse believes each individual has the right to monetary freedom. “The swarm is headed towards us” -Satoshi Nakamoto
