Rajarshi Mitra
Independent Analyst
- Synthetix protocol has reached $1 billion in total value locked (TVL).
- Synthetix (SNX) offers trading between synthetic assets, aka “Synths.”
- Synths are created by using SNX tokens as collateral.
Decentralized finance (DeFi) platform Synthetix (SNX) has recently surpassed $1 billion in total value locked (TVL). Having made significant gains in 2020, SNX’s price reached an all-time-time of $7.32 on August 15 and rallied over 400% year-to-date.
Synthetix is a decentralized exchange (DEX) built on Ethereum through a series of smart contracts. However, the protocol does not facilitate trading between digital assets (typically ERC-20 tokens) and stablecoins, but rather between synthetic assets, aka “Synths.”
Fiat currencies (sUSD,sEUR), digital assets (sETH, sBTC) and commodities like gold (sXAU) can be directly traded on Synthetix exchange. Another unique feature of Synthetix is creating and trading Synth tokens that track the price of assets inversely (iUSD, iETH, iXAU, etc).
Synth tokens are typically created by using another asset as collateral. Notably, instead of using the underlying asset (like xBTC or USDT), the protocol’s native SNX token is used. In other words, users must stake SNX tokens at a 750% collateralization ratio through the DEX’s Mintr smart contract to create new Synths.
Users can also obtain Synths by borrowing it or through another DEX. Those staking SNX tokens are incentivized with staking rewards. In addition to staking rewards, SNX stakers receive Synth exchange rewards generated by the exchange’s fees. This could be a significant factor in the rapidly growing market cap and value locked figure.
SNX/USD daily chart
-637345229627094762.png)
SNX/USD buyers have stayed in control of the third straight day market and are presently priced at $7.46. The price is hugging along the upper curve of the 20-day Bollinger Band. The moving average convergence/divergence (MACD) shows increasing bullish momentum, while the RSI looks to peek into the overbought zone. As such, the overall market sentiment for SNX is bullish. The price shows healthy support levels at $6.917 and $6.514.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
Celebrity meme coins controversy continues amid Pump.fun revenue dominance
Pump.fun outperformed the Ethereum blockchain on Tuesday after raking in $1.99 million. Following this achievement, a meme coin based on actress Sydney Sweeney was the subject of controversy after its developers dumped their bags on investors.
PEPE's on-chain metrics indicate potential rally after weeks of silence
PEPE has struggled to see any significant price move after reaching an all-time high in May. Increased adoption rate and low MVRV ratio indicate a bullish run may be on the horizon. A single PEPE outflow from Binance worth $14.7 million gives credence to signs of bullish expectation.
Ethereum has failed to overcome key resistance despite bullish sentiment surrounding ETH ETF
Ethereum (ETH) is down more than 1.4% on Tuesday following another ETH sale from the Ethereum Foundation. Meanwhile, crypto exchange Gemini's recent report reveals that ETH ETF could see about $5 billion in net inflows within six months of launch.
Crypto community blasts Polkadot following report of treasury spending
Polkadot reports $87 million of treasury spending during H1. Crypto community members expressed harsh feelings toward the DOT team's high spending. DOT is up more than 2% in the past 24 hours but risks correction following the report.
Bitcoin: BTC price correction could end in July, according to seasonal data
Bitcoin (BTC) price appears poised for a decline this week, influenced by slight outflows in US spot ETFs, selling activity among BTC miners, and a combined transfer of 4,690.28 BTC to centralized exchanges by the US and German governments.