What is the Synthetix Network Token (SNX)?
Synthetix (SNX) is a decentralized synthetic asset release protocol built on top of Ethereum. These synthetic assets are collateralized with the Synthetix Network Token (SNX) when locked in a contract to issue synthetic assets (Synths). This collateral model allows users to switch between Synths directly with smart contracts, avoiding the need for partners. This mechanism addresses liquidity and sliding issues experienced by DEX. Synthetix currently supports mixed currencies, cryptocurrencies (long and short) and commodities.
SNX owners are encouraged to contribute their tokens when they are paid part of the fee generated through their operation on Synthetix.Exchange, based on their contribution to the network. It is the right to participate in the network and to collect fees generated from Synth exchanges, from which the value of the SNX token is obtained.
What is SNX token?
Synthetix Network token or SNX token is the base currency of Synthetix Network protocol. SNX tokens play a key role in maintaining stability, security, and creating economic incentives for network participants.
Currently, SNX tokens are operating on the Ethereum blockchain according to the ERC-20 token standard.
What is SNX token used for?
SNX tokens are mainly used to pay for transaction fees on the network and on DEX of Synthetix Network.
In addition, there are some activities that you need to use SNX token:
- When you issue a private token, you must use the SNX token as collateral (lock the SNX token).
- SNX tokens are used to reward staking participants.
- If you want to participate in staking SNX tokens, you must stake SNX.
The development of Synthetix Network
Most of the circulating SNX tokens are locked by users to participate in staking. This number is at a very high level, from 70-80% of the total SNX tokens in circulation.
However, the SNX token reward for participating in staking will decrease over time. So, at one point, there will be a part of users who do not participate in staking because it is not profitable as they originally expected.
The current choice of many SNX token holders may be to lock the SNX tokens in order to share the transaction fees of users on the DEX of Synthetix Network. Therefore, in the future, this DEX development will determine the potential of SNX token investment.
Soon realizing the problem, the Synthetix Network development team focused its attention on improving DEX trading. This is clearly shown through their roadmap.
SNX is developed and run by a team of dynamic people with experience and backgrounds. SNX’s core team can name a few key figures as follows:
Kain Warwick – founder: Before launching SNX, Kain used to build the largest cryptocurrency payment platform in Australia, with a transaction volume of tens of millions.
Justin Moses – CTO: Justin is a former Technical Manager at MongoDB and has experience in designing and implementing high availability systems on a large scale.
Garth Travers – Communications Manager: Garth graduated from Communication at the University of Sydney and has extensive experience in managing the national payment network.
Clinton Enni – Senior Architect: Clinton has 18 years of experience in software engineering and is a former Chief Architect at JPMorgan Chase in trading technology.
Charlie Karaboga – Head of Product: Charlie has over 10 years of experience in leading product and distribution groups in Europe and Australia. He has managed several international launches for products with millions of users.
Synthetix has provided one of the most complex and useful protocols built on Ethereum to date. But the potential for anti-censorship-synthesizing assets remains untapped. Further improvements in mechanisms as well as functional upgrades and new Synths will significantly increase the utility of the platform. Moving to a decentralized management process will also reduce systemic risk and increase the project’s long-term viability.
You can check SNX price here.