Synthetix (formerly known as Havven) is designed for engineers to build decentralized and trustless networks. Synthetix Network Token (SNX) tokens support a variety of comprehensive assets, including fiat currencies pegged to the US dollar, precious metals, indexes and even other cryptocurrencies.

Project Predecessor

The former name of Havven, Synthetix was founded in 2017 and consists of a distributed payment network and a stablecoin.
Initially, Havven used a dual token system to reduce price volatility: one is the stable token Nomin, measured in fiat currency to keep the price stable (value pegged to the US dollar), as the first medium of exchange. Another type of reserve token that supports it is called Havven, which is a sign that provides collateral for the system. Its supply remains unchanged and its market value reflects the total value of the system.
At the end of 2018, Havven was working hard to issue "multi-currency" stablecoins, such as the euro, the pound, etc. At this time, the team realized that the Havven system had the potential to launch a variety of assets, including synthetic cryptocurrencies (long and short), indexes, and derivative assets such as stocks. The team then began to rename Synthetix and switched from a stablecoin project to a synthetic asset issuance agreement.
Before officially renamed Synthetix, Havven disclosed two financing activities.
In September 2017, Havven announced a $250,000 seed round.
In March 2018, Haven raised a total of $30 million through private and public fundraising.
The investor's name was not disclosed in both financings.
On October 28, the Synthetix Foundation announced that Framework Ventures has purchased 5 million Synths (SNXs) from the Synthetix Foundation’s treasure, which is about $6.3 million. Synthetix further stated that several institutions have also purchased "large" of SNX tokens, but have not disclosed the names of these institutions.
Synthetix Team Base In Australia, Kain Warwick is the founder and CEO, who previously served as CEO of a crypto digital payment provider called Blueshyft. Blueshyft has 1,250 sites in Australia and provides digital payments to online businesses through the iOS platform. It has become Australia's largest cryptocurrency payment channel, processing tens of millions of dollars in transactions a day.
Recently, in an interview with DeFi Labs, Kain said that decentralized on-chain derivatives trading has unlimited development space in the future, and Synthetix's goal is to become the next BitMEX.

How to make money on projects

1. Purchase SNX to mortgage
Currently, the channels for purchasing SNX are mainly Uniswap, Kyber, and KuCoin. According to data on CoinGecko, the highest transaction volume is the SNX/ETH trading pairs on Uniswap, while KuCoin accounts for less than 20% of the circulation. Most players still choose to redeem SNX with ETH on Uniswap.
2. Casting synthetic assets sUSD
When the user holds SNX, he can use Mintr (https://mintr.synthetix.io/) to stake the SNX tokens to generate synthetic assets sUSD.
sUSD is equivalent to the chips you enter Exchange.synthetix. You can mint sUSD by staking SNX, or you can buy sUSD directly on Uniswap.
Because SNX's volatility may be much higher than ETH, Synthetix sets a 750% over-staking to generate stablecoin sUSD. That is to say, only when the target threshold of 750% can users have the opportunity to receive transaction fees and rewards for SNX new tokens.
This incentive mechanism with ultra-high mortgage rate is mainly to ensure that the mortgaged assets that support synthetic assets can cope with large price fluctuations. This will also prompt the mortgagee to increase their mortgage rate, deposit more SNX, or destroy synthetic assets.
SNX rewards are similar to Staking's additional issuance rewards. According to data from StakingRewards.com, the current mortgage rate of Synthetix is ​​85.16%, and the mortgage reward is 54.92%, which is currently considered relatively high.
The dividends of transaction fees are the dividends generated by users when they trade through Exchange.synthetix. Each procedure of 0.3% of the handling fee is placed in the dividend pool and distributed to users who have collateralized tokens.
During the process of minting synthetic assets, users generate new debts (the value of the new synthetic assets minted) which are stored in XDR (Synthetix Drawing Rights). XDR uses a basket of currencies to stabilize the value of debt, similar to the IMF’s Special Drawing Right (SDR). The prices of these synthetic assets will fluctuate based on the price of the oracle, that is, their debts are variable.
(Odaily Planet Daily Note: The Special Drawing Rights can be used to repay IMF's debts and make up for the balance of payments deficit between member governments. Its value is determined by a basket of reserve currencies composed of US dollars, euros, RMB, Japanese yen and pounds.)
When the debt is allocated to the collateralist, the Synthetix smart contract issues new synthetic assets and adds them to the total supply, while the new synthetic assets are also allocated to the user's wallet. Since synthetic assets are over-collateralized with SNX, it has a target threshold of 750%. If the value of SNX increases, then SNX can unlock accordingly, and of course more synthetic assets can be issued.
3. Trading synthetic assets
This step needs to be completed in Exchange.synthetix. sUSD can be exchanged for assets on any platform, and can be traded (long or short) cryptocurrencies, commodities, fiat currencies and other assets.
For example, if you are long for BTC, you can buy sBTC (on the contrary, if you are bearish, buy iBTC). When the price of BTC rises, your sBTC price will rise, and you can directly go to the trading market Exchange.synthetix to sell it.
Interestingly, the transaction of synthetic assets mainly interacts with smart contracts, without order books, and no counterparty. It is not a buy iBTC to bear it, but it is borne by the entire "debt pool". The debt pool can be understood as a pool of all synthetic assets, which changes with the price of synthetic assets.
Its asset trading is for the system to simply exchange debt from one synthetic asset to another, the process has no order book or order matching. In this way, users don’t have to worry about liquidity issues.
But the risk is the change in value caused by everyone's shared responsibility for the debt pool. So even if you hold sUSD, you may lose money when the debt pool changes.
Because the token price in it is obtained from off-chain through oracles, the oracle is currently operated by the Synthetix team, which is a risk for users.
4. Destroy Debt
When an SNX asset pledger wants to reduce debt or exit the system, it needs to destroy the synthetic assets first.
For example, the staker generates 1000 sUSD through SNX staking. In order to unlock the SNX of his staking, the user needs to destroy 1000 sUSD first. If the debt pool changes during the mortgage period (and the individual debt changes with it), this causes the user to have more or less sUSDs to destroy their debt.
The destruction process is also completed through a smart contract. The Synthetix smart contract determines the user's sUSD debt balance, and then deletes it from the "Debt Register", while destroying the corresponding sUSD, updating the sUSD balance and the total supply of sUSD in the user's wallet. After that, SNX unlocked successfully.
After figuring out how to make money on Synthetix, let’s take a look at the income. Synthetix pays dividends every Wednesday. A large SNX investor mortgaged 33,000 SNX tokens. Now the weekly transaction reward is 115.48 SNX (approximately 956 yuan). The weekly new token reward of SNX is 328.94 SNX (approximately 2,724 yuan). In total, if you mortgage 33,000 SNX, you can get 3,680 yuan dividends per week. The unit price of this big SNX is less than 4 yuan. Now a SNX is quoted at 8.28 yuan. In short, the more SNX you mortgage, the higher your debt will be. The SNX you get every week The more dividends there will be.
At present, many domestic investors are accustomed to buying SNX on Uniswap, but due to network delays and lags, transactions are sometimes not smooth. Now, SNX can also be purchased on the domestic exchange KuCoin.

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