Decentralized Finance (DeFi)

A 3-Minute Complete Guide to Synthetix Protocol

Synthetix was originally known as Havven and held its ICO around February 2018 for its ERC-20 token, HAV.

Its price was equal to 0.67 USD = 1 Hav.

Its main aim was to be a decentralized payment network which uses a dual token system to issue stable coins (nUSD) backed by HAV as collateral.

HAV holders were then rewarded with one percent of fees generated from all nUSD transactions as a result of keeping nUSD stable. 

The major rebranding to Synthetix was announced on 30th Nov’18 and HAV became SNX

Synthetix is a protocol for issuing and trading synthetic assets (Synths) on the Ethereum blockchain.

Each Synth is an ERC-20 token that tracks the price of an external asset.

Potential of SNX platform

  • It enables creation of on – chain synthetic assets which an oracle is used to track the price movement of the same assets in the real world.
  • There is a wide variety of synthetic assets that any user can mint such as stable coins that are pegged to the price of fiat currencies or dollars pegged to indexes or commodities, provided that it is offered on a platform. 
  • It allows exposure to the price action of the asset without holding the underlying asset.

Purpose of the SNX token

SNX is the native token of the Synthetix network.

It acts as the collateral to back the creation of any synthetic asset (Synths) on the platform.

It helps in minting the asset. SNX will be locked into the smart contract during minting and you will receive one fifth of sUSD against the SNX that is locked.

The optimal collateralization ratio is 500% so it requires the minter to play an active role in maintaining the ratio.

The incentive for doing so is that the minter would be able to claim rewards compared to other minters who are blocked when their ratio falls below a certain threshold.

This will be discussed in greater detail later on. 

Products of Synthetix

Synthetix.Exchange –  It is a trading dApp that leverages the SNX protocol and demonstrates its primary use-case: trading between synthetic assets.

Mintr – It allows SNX stakers to mint and burns Synths to manage their collateralization ratio, to claim to stake rewards, to track any fluctuations in their debt, and to perform various other actions on the network.

Synthetix dashboard – It is a public interface providing insight into various system metrics, including statistics relating to trading volume, staking, open interest in Synths, and more. 

Technical Infrastructure

Synthetix Protocol

SNX is composed of a smart contract infrastructure and a set of incentives that maintains Synth prices.

It is underpinned by the value of the Synthetix Network Token (SNX).

SNX acts as collateral; taking a proportional value of SNX is required to mint Synths. 

Stakers are rewarded for supporting the system with a pro-rata share of the fees generated by activity in the system.

The value of SNX is thus directly connected with the usage of the network activities.

This mechanism allows SNX to support instantaneous, near-frictionless conversion between different types of Synths without the liquidity and slippage issues experienced by other decentralized exchanges.

Features such as no order books and zero slippage are possible because Synth trading profits/losses are split across the pooled debt SNX stakers incur when they mint Synths.

SNX stakers act as a pooled counterparty to all Synth exchanges; stakers take on the risk of the overall debt in the system.

They have the option of hedging this risk by taking positions external to the system.

In return, SNX stakers earn a right to fees generated by the system.

Synthetix offers liquidity

What sets SNX apart from other derivative platforms is the fact that liquidity is pooled by aggregating all collateral together, and issuing all synthetic tokens against this mixed pool.

When staking SNX, automatically assuming the role of the counterparty to all other assets the synthetix exchange is exposed to.

When trading, a user effectively re-denominates their synth, rather than take up an actual order on an order book, resulting in infinite shared liquidity between all the minted derivatives products on synthetix. 

Synthetix activity and community overview

Synthetix Protocol

The SNX community offers and fosters active participation in the decision making behind the development of SNX products, encouraging community involvement and direct engagement through informative content using social media platforms such as Twitter and Discord. 

Current growth strategies include : 

  • Hosting community governance polls in Discord
  • Conducting monthly public governance update meetings 
  • Setting up the grantDAO program to fund community proposals. 
  • Running local community manager programs in all countries with language support 
  • Collaborating with library associations and educational institutions to attract editors. 

Future growth strategies include : 

  • Launching the Synthetix Ambassador Program to incentivize Synthetix supporters to continue their efforts of promoting Synthetix.
  • Fostering a Korean community with SNX listing on Korean exchanges and Korean translations to the dApps. 
  • Launch of the product feedback program to create a dialogue between Synthetix core contributors and users. 

Synthetix (SNX) surpasses $1B TVL as DeFi investor interest grows!


Synthetix has reached the $1 billion in value locked milestone, following other Defi protocols like Compound and Aave.

Synthetix (SNX) has been one of the many Defi tokens that have made substantial gains in 2020, having hit its all-time high of $7.32 on August 15 and rallied more than 400% year-to-date.

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What is synthetix network token?

SNX is the native token of the Synthetix network.
It acts as the collateral to back the creation of any synthetic asset (Synths) on the platform.
It helps in minting the asset. 

What is SNX Crypto?

SNX is a cryptocurrency that powers the Synthetix protocol. Synthetix protocol enables trading synthetic assets on Ethereum.
Synths are tokens that provide exposure to assets such as gold, Bitcoin, U.S. Dollars, TESLA, and AAPL within the Ethereum blockchain. 

Where can I buy synthetix?

The easiest place to buy SNX is on Uniswap.
It’s decentralized, and there’s no requirement to create an account or input personal information.

How do you make money on synthetix?

To make money on synths, get access to decentralized derivatives, provide liquidity for derivatives exchange, and bet on the price of gold, stocks, or indices on

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