When you use Coinberry, you have the option to invest in a wide variety of cryptocurrencies. One such digital asset includes Synthetix. While we offer more in-depth content about this innovative project, this post focuses on some of the more commonly asked questions about Synthetix.
What is Synthetix?
Traditional financial centers like Wall Street, London, and Hong Kong dominate trading stocks, currencies, commodities, and other assets. Synthetix aims to bring its toolkit to the decentralized, global, permissionless, and 24/7 world of crypto.
Given its crucial tokenomics and backbone, Synthetix has risen the ranks to become one of the most popular Defi innovations of the decade.
But, what exactly does Synthetix do?
Synthetix is a decentralized asset issuance protocol that allows individuals to create, store, and trade a variety of derivatives, including commodities, fiat currencies, and even equities. Being one of the first decentralized finance (Defi) protocols addressing the liquidity problem, Synthetix enables any trader to hedge the risk of market fluctuation by acting as an intermediary between two traders who want to make the opposite bets on the price of liquid assets.
Users can hedge crypto-assets, stocks, currencies, precious metals, and more in the form of ERC-20 tokens using Synthetix, which uses the Ethereum blockchain. On the blockchain, a “synth” is a duplicate of an asset’s price in the “real world” and is given all the qualities of an ERC-20 token.
Who Created Synthetix?
Synthetix first hit the market as a stablecoin project called Havven. It was developed by Kain Warwick, the company’s current CEO. Synthetix has become one of Defi’s most important initiatives, with over USD $180 million in SNX tokens already staked to the protocol as of December 2019.
Coins that imitate cash performance – like the US dollar or the Euro – over blockchains, including Ethereum and EOS, were Havven’s purpose in creating this cryptocurrency.
What is the Native Token of Synthetix?
The native token of Syntheix is the Synthetix Network Token (SNX). The Synthetix Network Token (SNX) is an Ethereum token that supports Synthetix, a decentralized synthetic asset issuance platform. Synthetix is a decentralized synthetic asset issuance mechanism.
Synthetic assets are created when token holders use Mintr – a decentralized tool for communicating with the Synthetix contracts – to stake their SNX as collateral for the creation of synthetic assets.
What Makes Synthetix Appealing?
Synthetix uses a tiered infrastructure based on staking, inflation, and fees to ensure the system’s integrity. Synthetic Assets and the Synthetix Network Master Token are the two types of tokens used by the system.
The system is comparable to MakerDAO’s, where ETH is locked away to create DAI. For the sake of making the sUSD in Synthetix, SNX has been locked [as synthetic USD]. The USD is a loan, while the SNX is collateral. Synthetix and MakerDAO vary in that SNX can be collateralized to generate any synthetic asset, not simply sUSD, unlike MakerDAO.
The Synthetix system must get accurate information from the “outside world,” such as the value of the Japanese Yen and or the value of companies like Tesla or Google. Before, Synthetix had to use unreliable, centrally controlled price feeds to get its price data. They’ve now teamed up with ChainLink and their decentralized oracle system to dependably supply information to the blockchain without the need to trust a single central entity.
How Do The Tokenomics of Synthetix Work?
Synthetix SNX rewards played a fundamental role in Synthetix’s recent success. By investing in the Synthetix stock exchange and the system’s inflationary monetary policy, SNX holders earn commissions and rewards.
New Synths can only be created by wagering SNX worth more than 75% of the original Synth’s value. Staking and collateralizing SNX makes the token more valuable because it reduces its supply and increases its value.
How Many Synthetix Tokens are in Circulation?
In circulation are 114,841,533 coins, with a maximum quantity of 212,424,133 coins available in the market.
How is Synthetix Used?
The primary purpose of the Synthetix platform is to facilitate the trading of Synthesizers. Holding Synths allows investors to take long positions in assets, predicting that their value will rise. However, they might also bet that the price of an asset will fall (known as shorting).
SNX owners stake their currency to construct new Synths, get prizes, and see their holdings expand. This may be why the vast majority of the SNX supply is locked into the protocol.
The price feeds used on Synthetix help provide transparency and trust in the system. These are inputs on which its network is built and anchored via ChainLink. The ChainLink Network is a decentralized oracle solution that provides data to the blockchain without relying on a single central authority. To put it another way, it’s an off-chain connection between the real world and the Ethereum virtual world.
Synthetix’s goal is to establish a financial market on the blockchain that can exist without access to external data sources. This is one reason why the Synthetix team decided to work with ChainLink and its decentralized oracle solution.
What Wallets Support Synthetix?
An encrypted hardware wallet like Ledger or Trezor is a great place to keep your Synthetix Network Tokens (SNX). To safeguard your assets from sophisticated network attacks or even simple phishing scams, hardware wallets employ incredibly high-end encryption techniques to keep your money safe. Even if the wallet is lost, broken, or otherwise compromised, hardware wallets can recover assets using a mnemonic seed phrase.
You can also store your Synthetix Network Tokens on the popular Trust Wallet; it’s an excellent option for both traders and investors (SNX). The simplicity, security, and backup options provided by mobile wallets may be ideal for those who are new to cryptocurrencies or are simply searching for a safe place to keep their SNX.
Install Trust Wallet on Android or iOS and follow the instructions to create a new account. It is possible to transfer the Synthetix Network Token (SNX) directly to your Trust Wallet, along with any other ERC-20 tokens you choose to keep secure. Visit the Trust Wallet help page if you have any questions or concerns.
You may also hold the Synthetix you buy on Coinberry, with us. Learn more about our custody here.
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Where can I buy Synthetix?
You can buy Synthetix on Coinberry by signing up for an account here.
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