Synthetix

Introduction

Resources

How it Works

  1. Put SNX token into a liquidity pool and mint out sUSD (stable coin, e.g. like [dai])
  2. Use your sUSD to buy and sell synth tokens which follow the price of the chainlink oracles
  3. The total outstanding value in the system is considered debt and you as a SNX staker have to cover that debt So of all assets goes up (e.g. 1B –> 1.2B) the % ownership you had now requires you to pay off the debt accordingly. So if you bought in at 0.1% with $1M sUSD worth of SNX, now you need to go find $200k sUSD to cover the rest of the debt or you’ll eventually get liquidated.

However, non-stakers can freely buy/sell and don’t carry this counter-party risk.

# Method 1: Exchange (kwenta.io)
ETH --> sUSD (exchange) --> sXXX (exchange)

# Method 2: Stake
Get SNX on an exchange --> staking.synthetix.io (stake) --> sUSD (mint) --> sXXX (exchange)

Short Positions

Fine-print