What Is Synthetix?
Synthetix is a decentralized finance (DeFi) protocol that allows users to trade a wide range of assets, including cryptocurrencies and real-world synthetic assets like indices, stocks, commodities, and forex. It is currently operating on the Ethereum and Optimism networks.
Background
Known initially as Havven, Synthetix has evolved to become a significant player in the DeFi space. It powers several platforms, including a decentralized futures trading platform (Kwenta), a decentralized options platform (Lyra), and a parimutuel markets platform (Thales). Kain Warwick was the original founder of Synthetix in 2017.
How It Works
The Synthetix platform uses the SNX token for governance and as collateral for minting Synths, the synthetic assets. Ethereum can also be used as collateral for minting. The platform uses a minimum collateralization ratio (C-Ratio). If a user’s C-Ratio falls below the minimum, a 72-hour timer starts, after which the user’s collateral may be liquidated if the C-Ratio isn’t corrected.
Key Takeaways
- Synthetix is a decentralized finance protocol that allows trading various assets, including cryptocurrencies and real-world synthetic assets like indices, stocks, commodities, and forex.
- It operates on both the Ethereum and Optimism networks.
- Known initially as Havven, Synthetix now powers several platforms, including a decentralized futures trading platform (Kwenta), a decentralized options platform (Lyra), and a parimutuel markets platform (Thales).
- The platform uses the SNX token for governance and as collateral for minting Synths, the synthetic assets. Ethereum can also be used as collateral for minting.
- Synthetix uses a minimum collateralization ratio (C-Ratio). If a user’s C-Ratio falls below the minimum, a timer starts, after which the user’s collateral may be liquidated if the C-Ratio isn’t corrected.
