What is SNX and how is it used?
What is SNX? How does Synthetix work?
Today, Bitkub Academy will embark on a little adventure to answer these questions with you!
What is Synthetix (SNX)?
Synthetix (SNX) is an ERC-20 standard token built on the Ethereum network through smart contracts. Its objective is to be a platform that combines asset trading and Decentralized (DeFi) Finance or also known as DEX (Decentralized Exchange) and DeFi (Decentralized Finance), it doesn't just cover cryptocurrency but also includes other assets such as real world currencies, stocks or commodities like gold.
Synthetix network was created in 2017 by Kain Warwick, first started as Havven (HAV) as a stablecoin, before shifting to the DeFi project “Synthetix” in the following year. Kieran Warwick and Aaron Warwick created the Illuvium game blockchain that caught the attention of many investors and gamers.
Uniqueness and Synthetix Platform functions
Synthetix is a platform that allows users to invest in various assets under Kwenta, including real-world currencies, cryptocurrencies, stocks, and commodities such as gold through Synths token which is pegged to different kinds of assets such as sUSD that is pegged with US dollar, or sBTC that is pegged with Bitcoin through the function of Smart Contract and Data Oracle.
The Synthetix network also partners with Chainlink in order to use the Data Oracle service to provide real-world asset price data to reduce price disparity, making Synths tokens that represent other assets to have identical prices with real-world prices.
Synthetix works with a unique market mechanism that ensures the market provides high liquidity at all times through P2C (Peer-to-Contract) trading that does not require any matching in order to trade through the Orderbook, but it is traded through Smart Contract instead. As a result, the slippage is zero.
As a project that is built on Ethereum, which has a wide range of ecosystems and applications, the benefits that Synthetix gets are integration with other DeFi within Ethereum where you can transfer coins between dApps conveniently, transparent, decentralized, and verifiable through Etherscan.
In addition to trading different asset classes within Synthetix, users can staking in order to receive fees generated from transactions within the platform, which users can use to trade assets on Kwenta.
As of now, Synthetix has partnered with Optimism to create Layer-2, which enables higher transaction speeds, lower fees and solves the problem of expanding the network (Scaling Issue) to support the increasing number of users whether trading, staking, or etc.
Moreover, Synthetix has also partnered with cybersecurity company “Iosiro” to monitor the performance of Smart Contract and testing the system to be ready to deal with various types of attacks, which in every future development Synthetix will always have Iosiro to help with security.
In reference to statistics from Coinmarketcap on November 22, 2021, SNX is ranked as the 112 highest in terms of market capitalization, with around 964 million U.S. dollars or around 31.7 billion Thai baht. SNX’s maximum supply is fixed at 215,258,834 SNX with a current 114,841,533 SNX in circulation.
Additionally, SNX once made an all-time high at 954 baht and is hovering around the price of 276.30 baht at the time of writing.
Synthetix (SNX) is an ERC-20 standard token operating through smart contracts with a platform functioning through the fusion between Decentralized Exchanges (DEX) and Decentralized Finance (DeFi), whilst also having a Data Oracle from Chainlink to draw real-world data regarding assets.
Furthermore, Synthetix also functions through the Infinite Liquidity function to facilitate liquidity in P2C trades (Peer-to-Contract), with additional functions to assist its numerous financial services that allow users to step into the age of digital disruption.