What Is Synthetix?
Synthetix is a specialized decentralized protocol based on Ethereum smart contracts, created to issue new assets (Synths) backed by the Synthetix Network Token (SNX) token. Such mechanics are designed to solve the problems of DEX-exchanges related to liquidity. Unlike classic exchanges such as Forex, such a system supports fiat currencies, cryptocurrencies, and raw materials.
Advantages of the SNT exchange mechanism include: two types of rewards – tokens for direct participation in the system, exchange commissions; no order book; the use of bank rates – which stimulates liquidity;
Of course, the trader himself decides what is more profitable, to work directly with cryptocurrency, using well-known strategies, or trading synthetic assets.
The release of system tokens occurs at the moment when the user leaves SNX as collateral. Management is carried out by a special application Mintr. To participate in the system, the broker must correctly manage the margin coefficient, keeping the position above the target value. This is achieved by burning Synths (synthetic tokens) or releasing them. If the specified conditions are met, the user receives a reward.
The system works on mutually beneficial terms for the platform and stakers. The latter assume the obligations of the total debt, while the system provides for such risk the possibility of commission fees. For the network to function well, synthetic anchoring is necessary.
By becoming a member of the system, the trader assumes the obligations of the total debt of the entire pool, equal to the total number of issued tokens. To make money in such conditions, well-coordinated work is needed. If one synth increases the value, the profit is distributed to all owners.
The project team strives to reduce censorship, increase the decentralization rate in order to increase the system’s trading rating and attractiveness to users. To ensure the connection between developers and system participants, as well as to guarantee the quality of the changes made upon request, the SIPs protocol was introduced.
The main task of the platform is to further expand the market for the implementation of its resources. However, pricing of Synths and other assets is largely dependent on BTC, so significant fluctuations are possible. It is planned to expand the opportunities to encourage participants in the system to stimulate traders.
What is sUSD?
sUSD is a synthetic token that tracks the price in US dollars through information provided by Chainlink's decentralized oracle network
Users can issue any synthetic tokens based on collateral in the form of a native SNX token. The pledge is blocked in the protocol, after which the volume of assets is created, specified by the coefficient. The collateral ratio is responsible for how many synthetic assets can currently be generated based on the collateral provided. Thanks to this mechanism, stable prices of stablecoins are maintained and the network is maintained.
Fixed and maintained c-rate allows you to ensure the security of the network during periods of market instability.
Is It Worth Investing in sUSD?
sUSD gains credibility with the protocol behind it. Since it is a stablecoin, it attracts the attention of investors due to the stability of the US dollar. Therefore, the coin is willingly considered for low-risk investment purposes.
Is sUSD Safe?
Protocol users have the opportunity to exchange assets in a convenient and secure decentralized manner, without complicated interaction with banks and brokers. The protocol gives DeFi industry users easy access to any asset they are interested in.
