Cryptocurrency Synthetix Network Token (SNX)

Cryptocurrencies have occupied the minds of most investors and financial analysts. The phenomenon of digital assets is now at every turn, and only a lazy and completely illiterate person in financial terms does not talk and does not think about cryptocurrency. With each new day, the number of fans of cryptocurrencies is increasing.

When people hear about cryptocurrencies, they immediately imagine Bitcoin or Ethereum, but the concept of cryptocurrencies is much broader and new varieties and subspecies of a digital asset appear daily. For example, tokens.

What are tokens and what are their types?

A token is a kind of means of accounting for the owner's digital assets, or in other words, an analogue of securities. Now there are many different tokens that are worth and valued on the market.

Types of tokens:

1. Tokens. These tokens include appcoins or so-called user tokens that exist to provide access to various services.
2. Credit card tokens. Were created for short-term financial transactions, for example, a loan.
3. Promotion tokens. Its goal is to attract more interest in the investment of a particular product.
4. Unique tokens. This kind of tokens was created in order to carry information about the possession of objects, real estate, art. As a rule, they are not replaceable (hence the name "unique" tokens.)

There is also another type of tokens - synthetic assets. Synthetix belongs exactly to this type.

What are synthetic assets?

Synthetic assets or as it is also commonly called “synthes” are a kind of secondary components of financial instruments. When you purchase synth, you take part in the movements of valuable assets of the currency on the basis of which they are created. At the same time, when you buy a synthetic asset, such a purchase does not give you a guarantee and ownership of the asset base. All digital currencies can act as a synthetic asset.

Synths include:

1. sXAU is an analogue of digital gold
2. sUSD is an analogue of the dollar in the digital world
3. iBTC - reverse action synths
4. sCEX - all about centralised exchanges
5. sAAPL - individual shares
6. SNX

Ways to use synthetic assets

Synths - are derivatives of the financial system, namely their decentralized version.

Where application is possible:

1. Market speculation. Playing on the rise and fall of prices.
2. Stablecoins.
3. Hedging. A kind of insurance of their assets in case of a fall in market prices.
4. Raw materials and shares. Buying and selling gold, shares, etc., or using it as collateral.
5. Index Investing
6. Trading with leverage

What is SNX and how does it work?

The synthetix cryptocurrency is a kind of software, thanks to which the owner will be able to create an imitation of real assets, such as various currencies (euro, dollar) or other cryptocurrencies like bitcoin and others. Such functionality is available due to the fact that this is a rapidly developing direction of decentralized cryptocurrencies, abbreviated as DeFi. To simplify it a lot, this is a snx cluster of smart contracts that work on the Ethereum blockchain. Namely, it works through a code that completely eliminates the need for a financial intermediary. The owner of a synthetic asset may not have to resort to a trusted person or company to manage the created crypto assets. All that is necessary is to monitor and believe that the code will work properly.

New assets that have been recently created can be generated using the provisioning process. To secure your assets in synthetix, you need to buy snx, then draw up and sign a special contract document, which contains all the conditions for creating new assets.

The high popularity of Synthetix as a DeFi application came in 2020. Many financial experts have estimated its value at more than $ 2.5 billion, which automatically gives it a place in the top ten global financial assets.

Synthetix was originally conceived as a stablecoin and was called Haven. But in the first half of 2019, it was decided to rebrand and expand the scope of the project and launch the Synthetix brand. The popularity of the project came after a sharp surge in interest in DeFi protocols.

There are several components of SNX:

1. Synthetix exchange — is a DEX where you can directly sell and buy various synths. There will be a 0.3% commission for each trade, just like Uniswap. The commission that is charged is received and shared among the SNX stakers. Unfortunately, there is no accounting for orders, as everyone is used to centralized exchanges. All operations immediately take place via smart contract.
2. Mintr — is a special application for staking, passive storage of cryptocurrencies and the creation of new synthetic assets.
3. Dashboard — a window for monitoring the statistics of the Synthetix ecosystem.

Synthetix Network Token Forecast

Synthetic assets are a great opportunity to trade various assets from the real world without leaving Ethereum. In addition, it expands the possibility of DeFi itself.

The main thing to remember is that owning synths is not owning real underlying assets. Synthetic assets work properly and exist precisely because of SNX stake holders. Having such assets as SNX in your crypto portfolio is a very risky, but promising bet.