Synthetix Network Token $SNX is Available for Trading on FMFW.io!
We’re excited to welcome a new token listed on FMFW.io exchange — $SNX by Synthetix project!
What Is Synthetix?
Synthetix is an Ethereum-based protocol for the issuance of synthetic assets. Analogous to derivatives in legacy finance, synthetic assets are financial instruments in the form of ERC-20 smart contracts known as “Synths” that track and provide the returns of another asset without requiring you to hold that asset.
How Does Synthetix Work?
Synths use decentralized oracles, which are smart contract-based price discovery protocols, to track the prices of the assets represented, allowing you to hold and exchange Synths as if you actually own the underlying assets. In this manner, Synths provide exposure to assets normally inaccessible to the average crypto investor — gold and silver, for example — and lets you trade them quickly and efficiently. Synths are different from tokenized commodities, such as Paxos’ PAX Gold (PAXG), which is backed by gold bars. Owning PAXG means that you own the underlying gold and that Paxos holds it for you, whereas owning Synthetix’s sXAU means that you do not own the underlying asset — you merely have exposure to the price of gold.
Because Synths are issued on Ethereum, you can deposit them on other DeFi platforms such as Curve and Uniswap and use them to provide liquidity and earn interest. Synthetics and derivatives are important for building mature markets (i.e., markets that have reached equilibrium) by facilitating price discovery and helping to hedge against volatility.
For example, if you anticipate that the value of your asset will rise in the future, but are hesitant to accept the risk that would come with the possibility that the asset’s value fails to rise, you can buy an options contract. Options contracts are agreements between two parties that give you, the buyer, the option to buy or sell an asset at a future date at a predetermined price. This way, if the asset’s value fails to rise, you can buy a contract that allows you to sell it at a certain price up to a certain date.
Who created Synthetix?
Founded by Kain Warwick, Synthetix began as a protocol called Havven, which raised about $30 million selling 60 million HAV tokens in 2018.
Havven’s goal was to create cryptocurrencies that mimicked the performance of cash like the U.S. dollar or the euro on multiple blockchains, including Ethereum and EOS.
At the end of 2018, Havven rebranded to Synthetix, at the time expanding its goals to include the creation of synthetic assets for cryptocurrencies and commodities. In 2019, Synthetix raised $3.9 million by selling SNX tokens to Framework Ventures.
Synthetix was initially governed by a non-profit foundation, but it was dissolved in June 2020 and replaced by three decentralized autonomous organizations or DAOs.
These DAOs are the mechanisms by which holders of the SNX cryptocurrency can now vote on changes to the protocol and make decisions about its future.
$SNX token is available for trading in pairs with $BTC and $USDT on FMFW.io!
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FMFW.io does not provide financial, legal, accounting, or tax advice. Any statement regarding such matters is explanatory and may not be relied upon as definitive advice. All users are advised to consult with their financial, legal, accounting, and tax advisers regarding any potential investment or trading activity.