What is Synthetix _SNX_? Crypto Meets Traditional Finance

What is Synthetix? Synthetix is a decentralized finance protocol (DeFi) created to emit and offer “synthetic assets” in the Ethereum network. These assets, called Synths, usually represent what is usually traded in traditional finance; from stocks, funds, commodities, fiduciary currencies, the list goes on.

How does Synthetix work? Synthetix requires the platform to create different tokens, account510h one representing a specific synth supported by a system of funding warranty, inflation control, governance and fees. For example: sSilver could be a token representing the global silver market. To match the token’s price with that of the physical world, blockchain oracles are used to bridge the two areas together and provide real-time, consistently accurate information.

The SNX token: With a limited supply of 255 million tokens, SNX holds two core functions: it’s the mandatory token needed to create Synths, through staking as a warranty, and, it’s utilized as a governance mechanism where holders of SNX are able to vote on improvement proposals.

How to buy SNX: Once you have created a Gate.io account, head over to the Trade section and select Spot Trading. You will be directed to Gate.io’s main trading hub. From the top-left corner, search Synthetix or SNX to see what pairs are available to trade from.

How to store SNX: When assets are purchased in Gate.io, they are immediately provided with state-of-the-art custody which can be accessed through the Wallet menu on the top-right corner. Just head to Funds Overview and select the chosen account that you’d like to view your assets on.

How to stake SNX: Gate.io offers staking options to thousands of cryptocurrencies, and that includes staking SNX. To stake Synthetix, head to the Finance menu on the top toolbar, then click HODL & Earn. From there, click on the Flexible Term category to see what Synthetix staking options are currently available.

The world of finance is dominated by stocks, currencies, bare assets, commodities and other trades that are available in stock markets and exchanges across the world. While the crypto market has been growing massively over the past 13 years, it does not begin to compare with the size of traditional finance - in the hundreds of trillions of dollars.

However, it does present an opportunity to link these two worlds. what if traditional finance could also be accessed in crypto, through a decentralized source that’s much easier to access and invest? That’s precisely what Synthetix sought to accomplish. In order to obtain such features, the project created several decentralized tools that allow the crypto market to interact and become a hub for traditional finance in a seemless manner.

In this article, we uncover what Synthetix is and how it’s bringing crypto markets and traditional finance closer together.

What is Synthetix?

Source: CoinDCX Blog

Under the full name of Synthetix Network Token for its token (SNX), Synthetix is a decentralized finance protocol (DeFi) created to emit and offer “synthetic assets” in the Ethereum network. These assets are guaranteed their availability and funding peg under the SNX token, which is responsible for allowing the synthetic assets to exist in the chain and interact with the platform. These assets can represent virtually anything, but traditional finance is the focus; from stocks to funds, commodities and fiduciary currencies, the list goes on.

The purpose of Synthetix is to provide users with easy access to the traditional market. Most people would think the other way around; that it’s harder to access crypto than traditional finance. In reality, traditional finance requires a lot of compliance procedures and most exchanges will not accept a new user account if he or she does not have a proven track record of investments or centralized savings account large enough to prove their experience with investing. Not to mention the fees, which are beyond substantial in TradFi. With the Synthetix platform, it’s possible to create synthetic assets of whatever items the platform desires.

What are Synths?

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But what exactly is a synthetic asset? On Synthetix, they are called “synths.” Synths are basically digitally-synthetic versions of assets from other markets completely disconnected from cryptocurrencies. They are created with the goal of drawing a parallel to those markets - interacting and enjoying the properties of those assets, without properly owning them. With Synths, users enjoy the exposure to different assets from all types of markets in the world without having to deal with traditional hassles such as custody, asset-focused taxes, and other needs that might result from the traditional route. Meanwhile, they would simultaneously take advantage of the positives, such as value appreciation from market volatility and the ability to trade and sell them whenever desired.

How does Synthetix work?

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Quick breakdown of the rewards system for users to mint new synths and therefore receive SNX token rewards.


Synthetix requires the platform to create different tokens, account510h one representing a specific synth within the platform. Each synth is supported by a system of funding warranty, inflation control, governance and fees.

For example; if one wished to create a synth that represented the silver market, Synthetix would create a new token for this synth - probably under the title sSilver (the first “s” stands for synthetic). This new token within the Synthetix network will be united by a governance framework based on smart contracts; as do all DeFi projects and applications. This framework is the system’s warranty infrastructure, created to avoid impermanent loss, control the inflation and make sure every synth is functioning as desired. After all, account510h synth is representing not static assets, but volatile ones that are unpredictable and require a foolproof network to synthesize.

Therefore, oracles are an essential piece of the Synthetix puzzle. Blockchain oracles are, in a nutshell, the connection between smart contracts and the real world - they are the bridge between traditional finance and the synthetics being created in the platform, the physical world and the digital ecosystem. For instance, if the price of silver drops or rises in the traditional market, the DeFi oracle will drive that information to the Synthetix network - soon enough, the sSilver price will drop just the same to match the market volatility.

The SNX token

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During SNX’s initial coin offering (ICO), thirty million dollars were raised to issue 100 million tokens. At the time SNX was called Havven but, through a rebrand, it changed its name to Synthetix and now has a limited supply of 255 million tokens.

The supplies are raised on a yearly basis around March. In March of last year, SNX’s total supply raccount510hed 212 million from 175, a 21% raise. Last March, in 2022, it went to 231 million SNX tokens - a 9% rise from the previous level. March 2024 will be the network’s last rise in token emissions when it will finally raccount510h 255 million.

Outside of its emission tokenomics, the SNX token possesses two very clear functions. Firstly, it’s the mandatory token needed to create Synths. In order to do that, SNX tokens must be warranted in a 750% proportion ratio, or staked in the platform as a participatory asset to stabilize the synths. Secondly, it’s utilized as a governance mechanism at Synthetix DAO (Decentralized Autonomous Organization). As a governance token, holders of SNX are able to vote on improvement proposals of the project and participate in suggestions for updates whenever they are needed.

How to buy SNX

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Synthetix’s token SNX can be purchased at Gate.io multi-services platform through several ways; from a cash deposit, crypto deposit, credit card and P2P trade.

Once you have created a Gate.io account, head over to the Trade section and select Spot Trading. You will be directed to Gate.io’s main trading hub. From the top-left corner, search Synthetix or SNX to see what pairs are available to trade from - the most popular one being SNX/USDT.


If your account already has the proper funds to pair with the trade, you are ready to execute your order!

How to store SNX

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When assets are purchased in Gate.io, they are immediately provided with state-of-the-art custody which can be accessed through the Wallet menu on the top-right corner. Just head to Funds Overview and select the chosen account that you’d like to view your assets on.

How to stake SNX

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Gate.io offers staking options to thousands of cryptocurrencies, and that includes staking SNX. To stake Synthetix, head to the Finance menu on the top toolbar, then click HODL & Earn. From there, click on the Flexible Term category to see what Synthetix staking options are currently available - with new opportunities potentially added at any time. The same format applies to any other asset available on the platform. Browse around and see what investment options interest you!



Author: Gate.io Researcher: Victor Bastos
* This article represents only the views of the researcher and does not constitute any investment suggestions.
*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.