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- 1 Synthetix is developing a decentralized liquidity provisioning protocol that any protocol can tap into for various purposes.
- 2 The protocol aims to broaden the cryptocurrency space while introducing non-blockchain assets, providing access to achieve its earliest goal.
- 3 SNX tokens are used as collateral for synthetic assets that are minted and locked up in a smart contract.
Synthetix is building a decentralized liquidity provisioning protocol. Its deep liquidity and low fees serve as a backend for many exciting protocols on both Ethereum and Optimism.
Synthetix Network Token (SNX) is a token based on the Ethereum blockchain. It powers Synthetix, which is a decentralized synthetic asset issuance protocol. Synthetic assets are minted when token holders stake collateral in the form of SNX.
It is done using Mintr, which is a decentralized application for interacting with the Synthetix contracts. The protocol currently allows fiat currencies, cryptocurrencies, and commodities.
Synthetix is an open-source, decentralized finance (DeFi) protocol written in Solidity that is deployed on EVM-compatible blockchains. DAOs govern the protocol, including the Spartan Council, which votes on upgrades and configuration charges (SIP/SCCPs).
The protocol enables liquidity providers to delegate collateral to liquidity pools. They can take a loan of SnxUSD stablecoins. This mechanism is very similar to other DeFi protocols that implement collateralized debt positions, such as liquidity.
Founders and Developers of Synthetix
Kain Warwick launched the protocol in September 2017 under the name Havven (HAV). After a year, it was rebranded as Synthetix. Kain Warwick is the founder of Synthetix and also serves as a non-executive director at the Blueshyft retail network. Before founding Synthetix, he worked on several cryptocurrency projects.
Peter McKean is the CEO of the project. He has more than two decades of experience in software development. He has previously worked as a programmer at ICL Fujitsu.
Jordan Momtazi is the COO of Synthetix He is a business strategist, market analyst, and sales leader with several years of experience in blockchain, cryptocurrency, digital payments, and e-commerce systems.
Justin J. Moses is the CTO of Synthetix Protocol. He was the former director of engineering at MongoDB and deputy practice head of engineering at Lab49. He also co-founded Pouncer.
Synthetix Perps V3
Synthetix Perps V3 represents an upgrade for the world of on-chain perpetual futures. It is built on the successes and learnings from V2. This advanced version is designed to further enhance trading efficiency, usability, and resilience.
It introduces various new features that traders like, such as native cross-margin, new margin types, and NFT-account-based controls.
It is a significant improvement over Perps V2, introducing native cross-margin, new margin types, and NFT-based account controls for enhanced trading and usability.
Perps V2 success is visible, as it had over $38 billion in trading volume, attracting numerous traders, and accrued over $28 million in fees. It had innovative features, like an improved off-chain low latency oracle system from Pyth Network.
The advanced features in V3 include a unified margin system, expanded collateral margin options, a MEV-resistant liquidation process, and improved order settlements.
Features of Synthetix Prep V3
Looking at the achievements of V2, Synthetix Preps V3 introduces key upgrades to elevate the trading experience. Features of V3 to improve the trader and liquidity provider experience, simplify the integrator experience, and enable further integrations into the Synthetix Ecosystem.
Native Cross-Margining
To build a unified margin system, open positions will use the same pooled margin account. Gains on positions are utilized to offset losses on other positions. It allows for easier trading account management. It allows for easier trading account management.
Expanded Collateral Options
It includes a variety of synths from the V3 spot market, broadening trader control. With this, users will be able to open trades with sETH, sBTC, and many more as collateral.
MEV-Resistant Liquidation Process
It implements gradual, configurable liquidations, reducing the risk of MEV-sandwiched liquidations.
Improvements to Deterministic Settlements
It enhances deterministic settlement and limits the potential for optionality frontrunning with improvements to low latency oracles.
NFT-Based Accounts
Accounts will be controllable through an NFT, allowing traders to transfer their trading accounts or provide permissions to other accounts to do limited activities on their behalf, such as trading.
Implementation of Synthetix Perps V3
Synthetix Perps V3’s initial implementation will be featured in the Andromeda Release, with the deployment of Core V3 and Perps V3 simultaneously, the addition of new collateral in the form of USDC, and deployment on a new blockchain base.
Release on Ethereum Mainnet Plan
The core V3+ Perps V3 release on the Ethereum Mainnet will represent a significant evolution for Synthetix. It will target medium to large traders and protocols in terms of perps on L1. This particular deployment is designed to cater to a broad spectrum of users, from whales and market makers to protocols like Ethena that focus on delta-neutral positions for stablecoin scaling.
Ethena’s strategy while utilizing this L1 platform is an example of Synthetix V3, facilitating the scaling of delta-neutral stablecoins. Through leveraging the robust and efficient trading environment of Perps V3 on the Ethereum Mainnet. It aims to enhance the scalability of its stablecoin through delta-neutral ETH perps.
It was developed to meet the demands of L1 traders, who are accustomed to the trade-offs of higher gas fees. This deployment of Core V3+Perps V3 emphasizes functionality and efficiency.
It is primarily designed to cater to a specific segment of the market and the deployment is accessible to all. Synthetix V3 positions itself as a versatile and adaptable platform that is capable of supporting a diverse range of trading strategies and catering to the needs of various users, from individuals to large-scale protocols.
Conclusion
V3 introduces features and enhancements that promise to elevate the trading experience for traders and liquidity providers. With the upcoming deployment on the base chain, through Andromeda Release, and Ethereum Mainnet, Perps V3 is all set to address a wide range of needs in the DeFi space.
FAQs
Which is the appropriate exchange to buy SNX?
SNX is traded on centralized crypto exchanges. The exchanges that facilitate the trading of SNX are Bitunix, CoinTiger, and Binance.
Which is the most active trading pair?
The most active trading pair is SNX/USDT.
Does SNX follow inflation or deflation mechanisms?
SNX was deflationary until March 2019, but then the community voted to incentivize the minting using an inflation mechanism.
Steefan George is a crypto and blockchain enthusiast, with a remarkable grasp on market and technology. Having a graduate degree in computer science and an MBA in BFSI, he is an excellent technology writer at The Coin Republic. He is passionate about getting a billion of the human population onto Web3. His principle is to write like “explaining to a 6-year old”, so that a layman can learn the potential of, and get benefitted from this revolutionary technology.
