What is Synthetix (SNX)?

The Decentralized Finance market has been expanding all over the world in recent years and this growth accelerated in recent times. This can be explained thanks to the bullish momentum that cryptocurrencies are experiencing and also the useful services DeFi is currently offering to users.

In this guide, we are going to be sharing with you some of the main characteristics of Synthetix. This will be useful for you to know which are the main features of this virtual currency and blockchain network and how you could benefit from it.

Disclaimer: this guide shouldn’t be considered investment advice. All the information provided by AltSignals and its writers is not professional advice and was created for educational purposes only. Never invest more than what you are able to lose and always request help from a professional financial advisor.

What is Synthetix?

Let’s start with the basics: What is Synthetix? Synthetic is a derivatives liquidity protocol that is based on the Ethereum (ETH) network and that allows users to trade and exchange a wide range of assets.

This blockchain network will allow interested parties to issue and trade synthetic assets that will be following the price of an external asset. Users can already buy and sell a wide range of assets, including currencies, cryptocurrencies, stocks and even indexes.

The main advantage of using the Synthetix network over traditional centralized financial platforms is related to the lack of trust users need. Investors will not have to trust a centralized party providing financial services. It is enough for individuals to be ready to buy/sell an asset in this platform.

Thus, this platform is a decentralized competitor of traditional financial platforms that offer users the possibility to buy and sell a wide range of assets according to their needs. The main difference with other platforms is related to its decentralized model and its blockchain-based infrastructure.

How Does Synthetix Work?

Synthetix works on top of blockchain technology using smart contracts that help the assets maintain their correct price. Users can earn SNX tokens that work as collateral. If a user wants to mint Synths, then it is necessary to use SNX tokens as collateral.

Users that stake SNX tokens will be rewarded with part of the fees paid by the users that trade using this platform. The larger the network and the users in it, the higher the value of the SNX cryptocurrency.

In this way, the Synthetix network can certainly avoid experiencing liquidity issues that other decentralized exchanges could have. This is why this has been among the best performing decentralized tokens in recent weeks.

Users can start enjoying the benefits of Synthetix in just a few simple steps and trade the assets they want in a decentralized and efficient manner using blockchain technology. For example, using Synths, users will get exposure to assets such as Gold, Bitcoin, U.S. Dollars, TESLA and Apple. The main advantage is that everything is going to be based on the Ethereum blockchain.

Synthetix in the Cryptocurrency Market

Synthetix has been one of the main gainers in the DeFi market during the last few months. As reported by CoinMarketCap, Synthetix was able to move from $0.38 in March this year to $7.27 a few months ago. This represents a price increase of 1,813% in a very short period of time. 

It is worth pointing out that Synthetix is also the fourth largest Decentralized Finance project in the market with more than $880 million USD locked in the platform. In the last 24 hours, the USD value locked in Synthetix grew by 6.58% according to DefiPulse.

According to Weiss Ratings, the SNX cryptocurrency could yet triple in value by the end of the current year. In a recent report released by the independent rating agency, they explain that SNX price tripling by the end of the year is a conservative estimation.

On the matter, they explained:

“You can probably see how our forecast for SNX to triple by year-end is actually quite conservative. In truth, your gains could be a lot larger.”

Thus, experts consider that there is still a lot of growth for this digital currency in the coming months.

Conclusion

Synthetix is one of the most popular decentralized finance tokens currently available in the market. As DefiPulse shows, this is the third-largest DeFi platform in terms of USD value locked. This would allow the digital currency and the entire network to offer better services, solutions and attract a larger number of users.