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Synthetix - SNX

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What is Synthetix (SNX) and how does it work?

Synthetix (SNX) is a decentralized finance (DeFi) protocol that enables the issuing of highly liquid synthetic assets (synths) on the Ethereum blockchain, which mirrors the price and value of the underlying asset while providing on-chain exposure. Synthetix crypto supports synthetic commodities such as gold, synthetic cryptocurrencies, synthetic cryptocurrency indexes, and synthetic fiat currencies. Synths track and provide returns on the underlying asset without requiring the traders to hold the asset directly. The platform aimed to expand by adding additional assets that are non-crypto related, such as traditional financial instruments.

The company initially launched in 2017 under the name Havven (HAV) and ended up rebranding to Synthetix one actual later. SNX is a platform for synthetic assets and a decentralized exchange (DEX). The platform allows for an independent trade and exchange of synths whilst also having a stacking pool where traders can hold their SNX tokens and get rewarded with a share of the exchanges’ transaction fees.

The platform uses a smart contract price delivery protocol called oracles to track the price of the assets and trade synths without liquidity/slippage issues. Additionally, this process eliminated the need for third-party facilitators. When synthetic assets are minted, SNX tokens are used as collateral, meaning they will be locked into the smart contract.

The team argues that the advantage of using this system is that it doesn’t require large order amounts or a centralized exchange, to convert currencies, an issue that most DEX incur through low liquidity.

In late 2021 Synthetix crypto went through a protocol transition, moving to the optimistic Ethereum mainnet, meaning that it would move from a layer 1 (L1) to a layer 2 protocol. This resulted in the network having reduced gas fees, an issue plaguing the Ethereum network, and having lower oracle latency. Unfortunately, similarly to other L2 protocols, network withdrawals take 7 days, a challenging period in which transactions on the L2 can be reverted.


Coin Analysis

Last update 21/6/2022

Synthetix (SNX) was initially listed on Binance in mid-2020 and started trading at $2.80. In the following weeks, due to its popularity, SNX rose to $7.40, more than doubling Synthetix price. However, the move was short-lived, and prices fell back to their initial listing price before bouncing back upwards. As a result, the year’s final weeks saw the price of SNX rise exponentially, with the coin rising as high as $25 each, an increase of over 808% from its original price.

However, following these new all-time highs, SNX started correcting, and in the weeks following, the ATH prices fell back to the support of around $17. Subsequently, Synthetix price fell further to the $11 support before falling to the $7.40 one. After that, prices did bounce back, rallying to the $11 resistance level and moving to their 20EMA and 50EMA moving averages. However, towards the end of the year (2021), most of the market started tanking, and so did SNX, which quickly lost its EMAs and fell below $7.40 and even below its original listed price of low as $2.

SNX/BUSD weekly candles chart
SNX/BUSD weekly candles chart

Since SNX has recovered slightly and moved back above the original listing price on Binance, it’s still really early to know whether it has formed a bottom. Still, it’s looking promising, as it's stabilizing above its support level. However, to confirm whether this is occurring, we need to see Synthetix price move back above the $3.60 level and towards the $7.40. This would signal a reversal and higher prices.

SNX is available for trading on dApp.

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SNX coinmarketcap

Synthetix website