Synthetix (SNX) outperformed most of Crypto market today and in the last 7 days:
This price increase is mostly due to COINBASE announcement last week since they said they will create their Base network by using Optimism stack and Synthetix is one of the main applications on Optimism network:
Unlike Optimism (OP) which started to pump immediately after Coinbase announcement and is already declining, Synthetix (SNX) price increased more progressively and maintains a good trend due to the staking of SNX tokens through Synthetix decentralized application.
How does Synthetix and SNX staking work?
Synthetix is a decentralized finance (DeFi) protocol built on Ethereum blockchain which allows users to trade synthetic assets (also known as "synths") that track the price of various real-world assets, such as commodities, cryptos and fiat currencies. Synthetix can also be used through the Ethereum layer-2 chain Optimism, offering much lower fees than on Ethereum mainnet.
SNX is the native token of Synthetix app, and it serves a few important functions within the protocol. First and foremost, SNX is used as collateral to back the issuance of synths. In other words, if you want to create a certain amount of synths, you need to lock up a corresponding amount of SNX as collateral.
Additionally, users can stake their SNX tokens ito earn rewards in the form of additional SNX tokens and fees from the Synthetix exchange. When you stake your SNX, you receive sUSD (Synthetix's stablecoin) in return, which can then be used to mint synths.
The amount of rewards you earn from staking your SNX depends on a few factors, including the total amount of SNX staked in the system, the length of time you have staked your tokens, and the overall trading volume on the Synthetix exchange.
There are a few different ways to stake your SNX tokens, including through the Synthetix.Exchange interface or by using a third-party staking platform. However, it's important to note that staking your SNX does come with some risks, including the possibility of losing your staked SNX if the collateral ratio fell too low, which would lead to liquidation.
Overall, Synthetix and SNX staking provide an interesting and potentially lucrative way to participate in the DeFi ecosystem and earn rewards for providing liquidity to the network.
Synthetix users
The number of users of Synthetix app has significantly increased amid the bear market:
Synthetix tokenomics
The Initial token distribution of Synthetix Network (SNX) is as follows:
- 60.00% is allocated to Investors and Token Sales
- 3.00% is allocated to Bounties and Marketing Incentives
- 5.00% is allocated to Partnerships
- 12.00% is allocated to Foundation
- 20.00% is allocated to Team and Advisors
The initial token sale for SNX was on 28 Feb 2018. The max supply of this token is with an inflationary type emission rate since genesis. 99.8% of the max supply is circulating, the inflation rate is now close to 0. However, the price of SNX token will mostly depend on speculation, Synthetix user trend and ETH.
Disclaimer: this article does not contain any financial advice. The information is provided for general informational and educational purposes only.
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