Welcome to our deep dive into DeFi with our report on Synthetix, a decentralized synthetic token issuance and trading platform.
- Synthetix is a platform that allows trustless, on-chain issuance and trading of synthetic assets called Synths, which currently include synthetic cryptocurrencies and commodities;
- SNX stakers earn fees and inflationary rewards in exchange for providing the essential function of maintaining sufficient levels of collateral to absorb Synth price fluctuations;
- The protocol’s debt pool mechanism can be difficult for new users to understand, which could lead to unintended risks and losses;
- Synthetix Exchange gives users unlimited liquidity and no slippage on trades up to the value of SNX collateral in its systems;
- The SNX token’s inflation scheme is well-designed to give active participants a decent incentive to help the system grow;
- Although our view of the protocol is positive in general, there are significant risk factors at play, namely price oracle risk, insolvency risk, and extreme SNX volatility
Read the full PDF version of the Synthetix Report here.