What Is Synthetix Network Token
Synthetix Network Token (SNX) can be defined as software developed specifically to allow users to mint new cryptocurrency assets
which can mimic real-world assets as well as cryptocurrency assets.
Synthetix Network Token (SNX) can enable decentralized finance (DeFi) through its code alone without the requirement of a financial intermediary, and it is a collection of smart contracts that run on the Ethereum blockchain.
The Synthetix protocol is also able to generate new assets through the use of a process known as collateralization.
In order to collateralize the asset on Synthetix, the users have to purchase SNX cryptocurrency, where once they lock it in a special contract, they can use it to generate the new assets. The new assets are then called synths. Synths are able to track the value of other assets through the usage of specific data feeds known as oracles that enable the users to get exposure to specific gains or even losses in the markets.
The SNX token is also compatible with the ERC-20 standard, one designed for Ethereum, and the Synthetix network is secured through proof-of-stake (PoS) as a consensus mechanism. This means that Synthetix holders have the opportunity to stake their SNX tokens and earn returns from the network fees. They can also earn rewards through the protocol's inflationary monetary policy known as staking rewards.
The tokens are also used as collateral for the synthetic assets, which are minted, which means that whenever synths are issued, the tokens are locked up in smart contracts. The protocol has transitioned to the Optimistic Ethereum mainnet to help in the reduction of gas fees as well as enable a lower level of oracle latency. Furthermore, Synths can be traded seamlessly without any liquidity or slippage issues.
Synthetix Network Token Founders
Discussing the founders of Synthetix Network Token (SNX), it was originally launched in 2017 by Kain Warwick; however, it was launched by a different name, known as Havven (HAV). A year later, the company rebranded itself to Synthetix.
Kain Warwick is the founder of Synthetix Network Token (SNX) and is a non-executive director at the blueshyft retail network. Before this, he worked on other projects and founded Pouncer, which is a live auction site specifically made for Australia.
Then you have Peter McKean, who is the project's CEO and has two decades of experience in software development, as well as Jordan Momtazi, who is the COO and is a business strategy. Last but not least, we have Justin J. Moses, who is the CTO and is the former director of engineering at MongoDB.
The original Havven managed to raise $30 million when it sold 60 million HAV tokens in 2018. Its goal was to create cryptocurrencies that could potentially mimic the performance of FIAT currencies such as the U.S. dollar or EURO on different blockchains. At the end of 2019, they rebranded to Synthetix and expanded their goals to create synthetic assets for cryptocurrencies as well as commodities. Furthermore, in 2019, they raised $3.9 million by selling tokens to Framework Ventures.
How Does SNX Work
The Synthetix protocol takes advantage of two cryptocurrencies with the goal of offering a successful synthetic asset mining service. The first one is the native cryptocurrency token known as SNX, while the second are the synths themselves that have the ability to mimic any asset. In order to generate the synths, a user has to acquire the native token and deposit it onto the Synthetix platform. Synthetix then creates a new synth token, one which the user themselves chooses, and the value of SNX token locked needs to remain above 750% of the value of the one created, which is based on the specific rules of the software itself.
SNX is a cryptocurrency, and the value it has, or in other words, the Synthetix price, is determined by the open market. The number of synths that can be in circulation changes as the Synthetix price moves up or down in value. If the Synthetix price rises, the system will release SNX tokens that are not needed to guarantee the ones that were created earlier. The SNX tokens can be locked up again when the platform generates new synths.
Synthetix prices synth through the usage of price feeds known as oracles. When an exchange between synths occurs, the first synth is burned or even destroyed. The synths that it's being exchanged for are then calculated based on the price feed from an oracle. The Synthetix protocol, in this case, creates a correct amount of the new token for the end-user.
The Synthetix price is determined due to the fact that it is required to generate Synthetic assets on the platform. When a user locks the SNX token, they can also become eligible to receive fees that occur across the entire platform when a synth ends up being traded. These fees, most of the time, will be 0.3% of the exchange. Then there are users that might decide to lock SNX, which can receive staking rewards, which are additional SNX tokens that the system can distribute to these users. The amount of these tokens can be distributed through staking, and it is determined by the software rules. Users that end up locking SNX tokens can receive more tokens, and this incentivizes them to hold onto them, which aids in the synthetic assets creation process as well as the Synthetix contracts, which increases the Synthetix price. They can, in turn, provide exposure, commodities, collateral, and relation, all of which work through the protocol. The commodities are synthetic, and there's also collateral, all of which impacts Synthetic assets and the Synthetix price.
Where Can You Buy SNX
Synthetix Network Token has an available supply of 168,518,569 and a total supply of 231,052,479 coins.
If you want to buy, sell or trade Synthetix Network Token (SNX), you can do so on exchanges such as CoinBene, Binance Futures, Binance, OKEx, Coinbase Pro, HuobiGlobal, and DigiFinex. The protocol works efficiently and allows commodities to have collateral. The protocol, in turn, defines the price and the collateral required.
