What is Synthetix (SNX)?

What if you could trade commodities or fiat currencies without ever leaving the blockchain? That’s the door Synthetix opens. Built on Ethereum, this decentralized finance protocol lets you create and trade synthetic assets, digital tokens that mirror the price of real-world assets.

At the heart of the system sits the SNX token. By depositing it as collateral, users mint “Synths” that track everything from fiat currencies to commodities. Originally launched as Havven in 2017 before rebranding a year later, Synthetix has grown into one of DeFi's most trusted derivatives platforms. Today, it powers synthetic markets and perpetual futures trading, giving traders access to global asset classes, all without leaving the Ethereum ecosystem.

What is Synthetix (SNX)?

Synthetix is a decentralized liquidity provisioning protocol that enables the trading of derivatives across various asset classes, including commodities, fiat currencies, and cryptocurrencies. By using synthetic assets (known as Synths) users can gain price exposure to real-world assets without needing to hold the underlying security or rely on a centralized intermediary.

Through the protocol’s Synths, collateralized by the Synthetix Network Token (SNX) and other approved assets in the V3 ecosystem, users can access classic financial markets and sophisticated trading strategies. While the platform once offered binary options, it has since pivoted to focus on perpetual futures and spot markets.

When the platform launched in 2017 it was governed by the Synthetix Foundation, an Australian non-profit foundation. However, by 2020, the ecosystem is now governed by three decentralized autonomous organizations:

• ProtocolDAO: responsible for controlling the funding for protocol upgrades and changes to Synthetix’s smart contracts
• GrantsDAO: responsible for controlling funding for the community proposals for public goods on Synthetix
• SynthetixDAO: responsible for controlling funding for entities that are advancing the network’s development.

Synthetix provides a decentralized, permissionless, and censorship-resistant platform that allows users to gain exposure to both crypto and non-crypto assets without the need for ownership of these assets. This enables anyone with an interest in DeFi to join the industry through the use of synthetic assets regardless of whether they hold the actual assets or not.

Who created the Synthetix platform?

The platform was initially launched by Kain Warwick in 2017 under the name Havven (HAV) before rebranding to Synthetix a year later. Warwick has previously been an Advisory Council Member in Blockchain Australia and an Advisory Board Member at The Burger Collective. 

Warwick teamed up with software developer Peter McKean, the platform's acting CEO and business strategist, market analyst, and sales leader, Jordan Momtazi, who acts as COO. The CTO, Justin J. Moses, co-founded Pouncer with Warwick, an Australian live-action site, and has been a part of Synthetix since its conception. 

In 2018, the platform raised $30 million through an Initial Coin Offering (ICO) initiative. In 2019, Synthetix raised a further $3.9 million by selling SNX tokens to Framework Ventures. 

The initial goal of the platform was to create cryptocurrencies that tracked the performance of cash like the U.S. dollar or the Euro on various blockchains, including Ethereum and EOS. After rebranding, the platform expanded its goals to incorporate synthetic assets for commodities and other cryptocurrencies. 

How does the Synthetix protocol work?

The Synthetix protocol enables the creation of synthetic assets, digital tokens that track the value of real-world assets like gold, fiat currencies, or other cryptocurrencies.

The system is powered by its native Synthetix Network Token (SNX) and various Synths (synthetic assets). In the modern Synthetix V3 ecosystem, the protocol has moved toward a multi-collateral model. While SNX remains the primary engine, the protocol now allows for other high-quality assets (such as ETH or USDC) to be used as collateral to provide liquidity to the network.

Economics & Collateralization

To mint Synths, users lock up their tokens (primarily SNX) in a smart contract. This collateral acts as a backstop for the protocol's debt pool. Because SNX is a volatile asset, the system requires over-collateralization.

• Dynamic Ratios: As of 2026, the target C-Ratio for SNX is typically around 400–500%. For example, if a user deposits $1,000 worth of SNX at a 500% ratio, they could mint roughly $200 worth of sUSD (the protocol's native stablecoin).
• Fluctuations: When the price of SNX rises, the user’s C-Ratio improves, "unlocking" more SNX that can be used to mint additional Synths. Conversely, if the price of SNX drops significantly, users must either deposit more collateral or “burn” (repay) some Synths to maintain their ratio and continue earning staking rewards.

Kwenta (DEX)

Synthetix does not use a traditional order book. Instead, it utilizes peer-to-contract (P2C) trading. When a trader on a DEX like Kwenta (the ecosystem’s primary perpetuals and spot exchange) makes a trade, they are trading directly against the protocol’s collective pool of collateral.

• Slippage: Because there is no "counterparty" in the traditional sense, trades are executed at the oracle price (provided by decentralized networks), effectively eliminating slippage for most trade sizes.
• Instant Conversion: This allows for seamless conversion between any Synths (e.g., swapping synthetic Gold for synthetic Euro) without waiting for a buyer or seller to match the order.

DeFi Integration

As synths are Ethereum-based they can be deposited on other compatible DeFi platforms (Uniswap, Curve) to provide liquidity and earn interest. Alongside derivatives, synths play an integral role in building markets and helping them reach equilibrium by facilitating price recovery and assisting to hedge against volatility.

What is SNX?

Synthetix Network Token (SNX) is an ERC-20 token native to the Synthetix ecosystem. The SNX token has four primary functions:

• Collateral for Synths: SNX is locked in smart contracts to back synthetic assets.
• Staking Rewards: Stakers earn SNX-denominated rewards plus sUSD fees generated from trading activity on the Synthetix Exchange.
• Governance Participation: SNX holders vote through governance structures such as the Spartan Council.
• Protocol Security: Stakers act as the system’s financial backstop.

Through the derivatives liquidity protocol, the exchange also provides a platform for trading synths (digital assets portraying real-world assets). There is a total supply of around 343 million SNX with the entirety of it in circulation.

How Synthetix Compares to Other DeFi Protocols

Compared to Maker or Aave, which focus on lending and stablecoin collateralization, Synthetix specializes in synthetic derivatives. Unlike Uniswap’s automated market maker (AMM) model, Synthetix has historically used a debt-pool-backed peer-to-contract mechanism. However, with its latest V3 evolution, the protocol has introduced a hybrid architecture that combines high-performance off-chain order matching with secure on-chain settlement.

Where to Get SNX?

Anyone can add SNX tokens to their cryptocurrency portfolio on Tap. Creating and verifying an account is straightforward, allowing anyone easy access to buy or sell Synthetix Network Token (SNX) and 70+ other cryptos safely. 

Tap into the Synthetix market with Tap's integrated crypto wallet and buy SNX tokens using both fiat currencies and cryptocurrencies. Download the app and create an account to get access to buy, sell, hold and trade SNX.

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