What is the Synthetix network token?

Synthetix is a platform that allows users to produce synthetic commodities that follow and profit from an asset without actually owning it. If that’s enough to get you curious, read on to learn about the Synthetix network token, SNX.

What is the Synthetix network token, SNX?

Synthetix is a platform that allows its users to issue and trade assets without actually buying them. And SNX is the Synthetix network’s native token. This is the short answer to the “What is SNX crypto?” question. Keep reading for a more detailed explanation.

How does the Synthetix network token work?

Synthetic, you see, is a derivative liquidity protocol that runs on the Ethereum blockchain. Derivates liquidity—what the gobbledygook, you say? Well, hang in there. Let’s make it simpler. Derivatives are essentially a type of contract. Their value depends on a bunch of assets, and they let investors buy or sell an asset at a fixed price at a future date. With derivatives, you gain leverage—so you can gain access to trade with a much larger sum than you invest. Synthetix lets you engage in such trading. So you can leverage trade in a synthetic form of real-world assets or commodities, fiat money, and stocks. These digitized real-world assets are called “synths” in the context of Synthetix. Synths essentially track and let you profit from real-world assets without holding them.

That’s how the network works. Now let’s focus on the network token, SNX.

SNX is the token you need to buy a synth. But how do you get hold of it to start buying and selling synths? Well, you have two options. The first involves buying Ether (ETH) from an exchange and then exchanging it for Synthetix US dollars (sUSDs) via Kwenta, the Synthetix decentralized exchange.

The alternative is to purchase SNX on a trading platform and stake it on Mintr, a dApp for interacting with Synthetix contracts. Doing so allows you to create synths and trade them.

Synths are, therefore, collateralized by staking the Synthetix network token. Stakers on Mintr must manually maintain a 750% ratio. They can do this by issuing new sUSDs or burning sUSDs, as may be required.

Other technical information on trading SNX

Remember we mentioned Kwenta? Let’s start with that. Kwenta is a decentralized exchange that allows users to trade synths with one another. Kwenta is one of a kind among DEX because it uses Peer-to-Contract (P2C) trading. So there are no order books involved. Instead, all trades are performed against a smart contract that provides endless liquidity.

Also, if you don’t have the underlying assets but still want to hold and trade synths, you can use decentralized oracles. These are smart contract-based market pricing protocols that really can keep an eye on SNX investments.

A quick history of the Synthetix network: Who is the founder?

Kain Warwick is the founder of Synthetix. Currently, he leads its developer team. He also served as the non-executive director of Synthetix.

Warwick previously helped develop Blueshyft, one of Australia’s largest crypto payment platforms. Prior to that, he also served on the Board of Advisory of Burger Collective and the Advisory Council of Blockchain Australia.

The core team at present consists of four people. Blockchain advisor Clinton Ennis and software engineer Justin Moses are among them.

The platform initially called Havven, raised $30 million in starting 2018 via an ICO with a total supply of 100 million. Ever since it has made steady progress. The current market cap of SNX is $9.21 billion.

What makes the Synthetix network token unique?

The Synthetix network token is one of a kind due to its many outstanding features. The most notable feature is that the conversion of SNX does not require middlemen because the network is a blockchain-based decentralized network.

Another point of uniqueness is that the network uses Peer-to-Contract (P2C) trading. In this type of trading, buyers and sellers do not need to use an order book. A decentralized pool of token holders staking SNX makes all of this possible.
As a result, Synthetix exchange offers almost infinite liquidity.

What gives the Synthetix network token value?

The debt pool on the platform grows whenever a client mints a synth. The total debt pool is equal to the market price of all synths in circulation. However the latter does not give the SNX token its value.

However, the rise and fall of SNX do not depend on how much synth is minted but on the market. So user holdings may lose value due to volatility or price swings.

How many Synthetix network tokens (SNXs) are in circulation?

The current circulating supply of the Synthetix network token, as of 26 February 2023, is 252,896,702. That is a majority of the total supply of 314,857,962.

The circulating supply is a key factor behind the price of any crypto. So also with the SNX coin price.

How to use the Synthetix network token

Providing a marketplace for the exchange of Synths was the driving force behind the development of the Synthetix platform. Synth holders can long an asset, wagering that its value will rise, or sell an asset, speculating that its value will fall.
Staking SNX allows holders to participate in the creation of new Synths, earn rewards, and see their SNX holdings grow.

How to choose a Synthetix network token wallet

To use SNX price changes to your advantage, the first step is knowing how to store the token. First, you will need to look for a wallet that is ERC-20 integrated to store SNX. Then you will need to link your wallet with the SNX exchange. You could read this to learn how to choose a wallet in general.

Synthetix network token (SNX) staking

Staking SNX begins with storing SNX in a wallet. Because newly minted synths are tied not only to the user’s secured debt requirement but also to the value of SNX currently held in the wallet, it is essential to ensure that you have sufficient SNX to satisfy the 750% minimum.

Conclusion

Synthetix was one of the first companies to offer access to synthetic assets. That makes it a pioneer in the distributed finance industry. That gives it the potential to develop into a market leader in digitalized real-world assets.

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