Synthetix (synthetix token) stands out as one of the most exciting and original Decentralized Finance ideas currently under development. The fact that it is a blockchain-based insurance protocol for distributed assets is a major factor.
The Synthetix (SNX) project is based on the Ethereum blockchain and allows users to create and trade digital assets with no physical counterpart. SNX, formerly Havven and now known as Synthetix, facilitates the development of on-chain synthetic assets (“Synths”) that mirror the value of physical assets.
Do you want to learn more about Synthetix (SNX) but don’t know where to start or what to expect? Eliminate your worries.
This guide aims to provide you with all the information you need to proceed with the project and begin participating in the simplest trading environment currently accessible.
What Is Synthetix Network Token (SNX)?
The cryptocurrency Synthetix (SNX) was developed as a piece of Ethereum-based programming.
Synthetix eliminates the middleman by employing decentralized finance (Defi) system to deliver its services.
This means that users of Synthetix can store their crypto assets with any third party they choose.
One of Synthetix’s main functions is to be a tool for creating synthetic assets, or “synths,” which are combinations of assets that have the same value as another item.
There is no need for someone to own the underlying asset being tracked to receive a return from the synths.
To put it another way, Synthetix tokens allow users to gain decentralized, permissionless access to a wide range of crypto and non-crypto assets.
As a result, users who don’t own any Defi assets can nevertheless participate in the ecosystem.
In addition, the whitepaper notes that synths make available to regular traders things like gold and silver that are typically inaccessible to them.
Synths accomplish this through using oracles, which are price discovery protocols based on smart contracts that allow users to own and trade the underlying assets.
Smart contracts are the same as traditional contracts, except that they are written as protocols on the blockchain rather than on paper.
When certain circumstances are met, the ruleset automatically triggers the subsequent actions.
Synthetix’s goal is to remove the barriers to the efficient trading of synthetic assets by eliminating the need for a secondary market.
Synthetix is an alternative to conventional finance in which anyone can access the stock market, bond market, real estate market, and other asset markets without providing personal information or opening an account.
The SNX token is the native currency of Synthetix and is required to create synthetic assets (synths). New synths can be made after the SNX tokens are secured.
Synths can be transferred to different Defi networks because they are issued on Ethereum.
The assets can then be put to work, providing a source of ready cash and income.
Therefore, traders can immediately begin trading synthesizers by exchanging their ETH for synths. Or, you can get SNX tokens from any platform, make synths, and start trading them immediately.
History of Synthetix Network Token (SNX)
Kain Warwick created Synthetix initially under the name Havven, which garnered over $30 million in an initial coin offering (ICO) by selling 60 million HAV tokens in 2018. (initial coin offering).
At the close of 2018, the company Havven rebranded as Synthetix to reflect its expansion into creating synthetic assets for digital currencies and commodities.
Australia’s most well-known cryptocurrency payment service, Blueshift, was developed by Kain Warwick in the past.
On top of that, before discovering Synthetix, Warwick had already participated in several other cryptocurrency projects.
Additional essential members of the Synthetix team include Peter McKean, Justin Moses, and Jordan Momtazi.
Project leader and software industry veteran Peter McKean is at the helm. CEO and Chief Technology Officer at Synthetix are Justin Moses.
The chief operating officer is Jordan Momtazi, who has worked in digital currency, blockchain technology, and electronic commerce for several years.
How Are New SNX Tokens Created?
Staking is a method via which new SNX tokens can be generated.
Earning benefits just for keeping some cryptocurrency around is called “staking.” The blockchain puts crypto to work, which is why staking it results in incentives.
Staking crypto assets employ a consensus process called proof of stake, which is used to verify and secure transactions directly without needing a third party.
Users’ choice of cryptocurrency to stake is thus integral to the procedure.
Collateralizing the Synthetix network through staking allows users to earn weekly payouts. But without staking, investors’ sole chance of profit is a rise in token price.
Staking can be done by anyone who has SNX tokens. The benefits of staking may not be worth the cost of gas for a staker with only 250-500 SNX.
What Makes Synthetix Network Token Unique?
There are certain distinctive features of the Synthetix Network. Specifically noteworthy is that no counterparty is required to convert Synths. Therefore, anyone can do it.
The almost unlimited liquidity provided by the Synthetix Exchange is made possible because any Synth can be swapped for any other Synth.
The Synthetix network also features a novel kind of trading called peer-to-contract (P2C), in which trades are conducted directly between buyers and sellers without using an order book.
This collateral on the platform is provided by a decentralized group of token holders responsible for preserving the overall exchange’s stability.
All synths begin with the letter s, regardless of their type; for example, sEUR, sUSD, and so on represent fiat synthesizers.
Those involved in a Synth trade don’t have to use the same Synth variety used to create it. The system will accept any Synth for payment so long as it has the same value on the market.
How Many SNX Tokens Are There?
There can never be more than 240,000,000 SNX tokens in circulation.