What is Synthetix Network Token (SNX) How It Works & Where To Buy It?

Synthetix is a protocol that allows users to purchase synthetic assets. The protocol runs on the Ethereum network and allows users to purchase synthetic assets for commodities like gold and silver, as well as an array of other synthetic assets.

The SNX token is the native token of the blockchain protocol – SNX is currently the 108th largest cryptocurrency by market capitalization.

How Synthetix Network Token (SNX) Works

The protocol utilizes decentralized oracles to achieve an efficient and optimized protocol where individuals can trade synths. The entire protocol is secured with smart contracts that facilitate the transfer of data.

The Synthetix network gives users access to an array of assets that are generally inaccessible to crypto investors. Some of these assets include gold and silver which are typically traditional assets that can only be traded on traditional platforms.

It’s important to understand that Synthetix assets are different from other protocols like Paxos– Synthetix users don’t own the underlying assets but rather trade synths based on their exposure to the asset.

For example, sXAU is an asset available for purchase but owning sXAU doesn’t mean that the user has ownership of the underlying asset (gold).

Synths are tokens that can be traded on various Ethereum-based DeFi protocols including Curve and Uniswap – users can earn yields from participating in various DeFi products with Synths. Users can choose to participate in liquidity provision for example, which would allow them to earn interest on these assets.

There are a variety of features that make Synthetix unique from other projects. For instance, users can purchase something called an options contract – this allows users to buy or sell an asset (at a fixed price) at a future date.

A collateralization ratio is used to back all synths that are created by users staking SNX tokens. The community decides on what the particular ratio should be – this is decided by token holders who vote on proposals.

Stakers are tasked with the management of their ratios – this process involves minting and burning sUSD when required.

The supply of Synths, Synth debt, and value of synths all play an integral role in the amount of sUSD that users need to burn to unstake their SNX tokens.

Liquidity is controlled through the system and SNX stakers essentially act as a ”group counterparty” to trades. This process removes the need for counterparties when exchanging Synths; instead, they are converted directly through smart contracts.

By converting synths directly into a smart contract, the process for the user is simplified, and the protocol is tasked with accommodating for risk and slippage.

What Is Synthetix Network Token (SNX) Used For?

Sythetix is predominantly used by users who stake SNX tokens. Users that are able to sufficiently maintain a collateralization ratio of 600% qualify to receive two types of rewards:

Staking rewards are distributed in SNX tokens and sUSD tokens which are rewards that are generated from exchange fees. This process ensures that there is always sufficient collateral backing Synths because a particular collateralization ratio needs to be maintained.

Users opt to use Synthetix because of the rewards mechanism. Additionally, users also enjoy the benefit of not needing a counterparty when converting Synths.

The Synthetix Exchange also facilitates the trade of any Synth for another, bolstering the level of liquidity available in the protocol.

Two other notable features of the Synthetix exchange include peer-to-contract trading which eliminates the need for an order book when facilitating a trade. Any type of synthetic assets can be traded – this includes fiat Synths (sUSD, sEUR etc.) among other Synths.

Additionally, users can exchange Synths of any kind – the originally coined Synths aren’t relevant, only the market value of Synths.

Where To Buy Synthetix Network Token (SNX) Tokens

SNX tokens are frequently traded on several popular cryptocurrency exchanges. The unique value proposition that Synthetix platform offers users is an innovative way to trade versions of assets. In recent months SNX has been among the most traded cryptocurrencies on the market.

Before purchasing SNX tokens, users will need to deposit fiat money onto an exchange, sequentially, SNX tokens will be credited to their relevant SNX digital wallet on the exchange.

Some safe crypto exchanges where you can buy, sell and store SNX tokens include OKX, HTX, and KuCoin.

About Synthetix Network Token (SNX)

How long has Synthetix Network Token (SNX) existed?

Kain Warwick is the founder of Synthetix, a derivatives liquidity protocol on Ethereum, and is currently leading the team for its future development.

Having already previously been involved in building cryptocurrency payment platforms in Australia, the biggest one being Blueshyft, Warwick has a lot of experience in the industry. And more importantly, at Blueshyft, he was the non-executive director.

Before that, Warwick was also an Advisory Council Member in Blockchain Australia, as well as the Advisory Board Member at The Burger Collective.

What’s Controversial About Synthetix Network Token (SNX)?

There are thousands of emerging projects entering the crypto space. Unfortunately, many projects take advantage of or exploit investors that lack basic knowledge of the crypto space.

Individuals are encouraged to do as much research as possible before investing in any crypto project. A few key research areas should include the project’s founders, the tokenomics of the project, major partnerships, the whitepaper, as well as any other important factors surrounding the project.

Let’s take a look at the top controversy surrounding Synthetix (SNX):

• Token price – The token price of any cryptocurrency is an incredibly important consideration. Crypto projects need to prioritize the growth of their communities and how many holders of the token the project has – more expensive tokens are often overlooked by retail investors on a budget. The token price of Synthetix (SNX) could be seen by some as prohibitive.

How many Synthetix Network Token (SNX) Tokens tokens are there?

At the time of writing, Synthetix (SNX) has a circulating supply of 114,841,533.01 SNX (83% of the total supply).

The total supply of Synthetix (SNX) is 215,258,834

The max supply of Synthetix (SNX) is 215,258,834

Can Synthetix Network Token (SNX) be mined?

Synthetix (SNX) is not a mineable cryptocurrency. SNX is an ERC-20 token but mining is not possible.

Many websites claim that they can offer users SNX mining services; sites like unmineable.com post bids on advertisements for ”SNX mining” but aren’t able to facilitate these services.

However, SNX tokens can be staked – users can earn generous yields from staking SNX tokens.

There a few centralized exchanges also offer staking rewards for SNX holders that stake their tokens for a certain duration.

What is the market cap of Synthetix Network Token (SNX)?

To work out the market cap of Synthetix (SNX), take the total amount of coins in circulation and then multiply it by the current market price of SNX.

Synthetix (SNX) Market Cap = 114,841,533.01 SNX x $2,84 = $326 million (112th largest market cap).

SNX has cemented a spot on the list of the top 100 cryptocurrencies by market capitalization. However, despite this, the SNX price is currently trading at more than 10x below its February 2021 all-time high of $27.

Biggest Competitors Of Synthetix Network Token (SNX)

Synthetix has got some heavyweight competitors against it such as Avalanche and Cardano, among others, so the market is highly contested. And SNX can’t even secure its own identity at the moment.

SNX’s biggest competitors are:

• Mirror Protocol

What Are The Future Plans For Synthetix Network Token (SNX)

Synthetix is building a global community and is looking to stay on track to grow and expand. Although currently outside the top 100 cryptocurrencies by market share, it has big plans to start taking a larger slice of the market.

They want to sell more Synthetix network tokens, gain more Synthetix contracts, and in general, become a heavyweight of the cryptocurrency world in the future.

Pros And Cons Of Synthetix Network Token (SNX)

Pros:

• Fewer restrictions – The SNX platform was essentially built from scratch and therefore doesn’t experience the same restrictions as other distributed ledger technologies. The application layer of SNX is what separates the project from its competitors. The Synthetix ecosystem is a healthy one, and this is aided by fewer restrictions.
• Low supply – The total supply of SNX is only 114,841,533.01 SNX – this is significantly lower than most other cryptocurrency projects, and is even lower than the supply of top cryptocurrencies.
• Real use case – There are a considerable amount of projects that claim to provide ”solutions” to real-world issues. However, many of these projects are driven by unfounded claims and problems that aren’t necessarily affecting most people.

Cons:

• Largely unknown – SNX is providing necessary solutions but the project remains largely unknown within the crypto community. One of the most essential requirements for any project’s success is having a large community that knows about the project.