Synthetix ($SNX)
One of the most profitable protocols built on Ethereum. Currently available in Optimism. All fees are paid by the users to the SNX stakers. More users, more volume, more fees, more revenue. Synthetix itself has an ecosystem built on top of it with few protocols โ Kwenta, Lyra, Aelin, Thales, 1inch, Curve. All the protocols are the sources of yield for SNX stakers.
To stake SNX, you will need to mint $sUSD. sUSD is a stablecoin where you can use it for lending, liquidity providing, spot trading, derivatives trading, option trading & prediction market. Most of the fees generated from 1inch (DEX Aggregator) via the new implementation by the Synthetix Team and 1inch Team โ Atomic Swap
Stake SNX, get paid both in sUSD and SNX weekly.
Staking APY : 110%
Risk:
1) Flexible C-Ratio
If your C-Ratio below 200%, you will need to increase your C-Ratio back above 300% at least by buying more SNX or burning sUSD (repaying debt) or self-liquidate.
2) Smart Contract Risk
Bug
3) sUSD Depegs
Whenever new Synths are minted, stakers create a debt. Therefore, they need to pay back the same value in Synths before they can withdraw their locked-up SNX tokens. And the value of Synth will likely change over time.
As a result, users may need to pay a different amount of sUSD by the time they withdraw their locked up $SNX.
Synthetix Ecosystem
1) Kwenta
Synth tokens are synthetic assets that track the price of real assets. They are minted by locking up SNX tokens.
Synths can come in any form and they are denoted by โsโ. For instance, fiat synths would look like these: sEUR, sUSD, SRMB. Other variations of Synths include sAAPL (synthetic Apple), sTSLA (synthetic Tesla), sAu (synthetic gold), sBNB (synthetic Binance Coin), sDEFI (synthetic DeFi Index), and many more.
Kwenta is a Decentralized Exchange where user can spot trading or leverage trading the synths assets using the minted sUSD via the staked SNX. More liquidations, more revenue for stakers. More volume on spot trading, more fees to be paid to the stakers.
2) Lyra
Use sUSD to trade options in Lyra.
3) Aelin
Aelin is a permissionless protocol. Anyone with an internet connection may participate in the fundraising or deal sourcing process.
Investors can use Aelin to find early-stage projects/deals with discounts that they've never had access to before.
4) Thales
Thales platform is bringing binary options to Ethereum for users to hedge and speculate on the prices of crypto assets, commodities, equities, equity indices, and proprietary crypto indices. Thales will be the hub for spinning up new binary options markets, swapping binary option position tokens on decentralized limit order books, and claiming the fruits of winning options positions and strategies.
This will allow users to hedge and speculate on the prices of crypto assets, commodities, and equities among others. Possible addressable markets down the line are sports betting and custom options.
All of this is available in a permissionless way (No KYC) on the Ethereum network.
Outtakes:
A good governance token not only need a good tokenomics, we need great incentives and demand for the continuation of value creation for the token itself. SNX is a good token to hold for long term as human will fall for their own greed. As long as people wants to trade, SNX will continue to serve, stakers will continue to receive fees in the form of sUSD and SNX weekly. You can use the sUSD to pay yourself, thatโs a positive cash flow without having yourself exposed to any trading activities.
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