Synthetix (SNX)
Synthetix is a derivatives liquidity protocol on Ethereum that lets users mint synthetic assets that mimic real world assets, using SNX as collateral.
The Synthetix ecosystem has been expanding rapidly. In recent months, the protocol has undergone major updates to its network including reducing the time for Atomic Swaps, which we covered last month. Synthetix is currently undergoing additional upgrades to its network. To start, the Synthetix team announced that it’s redesigning the Synthetix protocol built on top of new smart contract architecture.
The proposed design will support more features like multi-collateral staking, customizable debt positions, and permissionless synths.
Synthetix V3 aims to implement:
- Permissionless asset creation - Any financial derivative can be built on top of Synthetix V3.
- Better control of credit - Stakers can pick and choose which assets they'd like to collateralize.
- Liquidity as a Service (LaaS) - Synthetix will not just be a protocol to route trading
through. It will be a protocol users build on top of if they're looking to increase liquidity
for any financial derivative on-chain rapidly.
The LaaS model simplifies the provisioning of liquidity for early markets. We first learned about LaaS in January’s portfolio’s update, as Balancer was integrating ways to achieve deep liquidity for its markets.
Elsewhere, Synthetix is working with Socket Tech to allow users to quickly bridge assets to and from Optimistic Ethereum. Synthetix recently passed a proposal to burn fees collected by the fee pool instead of allowing stakers to claim them. By burning these fees, the user's debt will decrease without the user needing to claim rewards.
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