Friday, June 2, 2023


by Hideo Nakamura

## Introduction to Synthetix
Synthetix is a decentralized derivatives protocol built on top of Ethereum. It allows users to gain exposure to the price movements of assets such as commodities, stocks and cryptocurrencies without actually owning them. The platform provides an easy way for users to interact with synthetic assets (Synths) that track underlying real-world prices using its native token, SNX. By staking SNX tokens in their wallet, users can earn rewards from trading fees collected by Synthetix while helping secure the network against malicious actors and improving user experience.

## What are Synths?
Synths are synthetic digital assets created on top of Synthetix’s smart contracts which represent values derived from underlying real-world indexes or spot markets such as gold, oil or Bitcoin. They allow traders to speculate on price movements without having actual ownership over those physical/digital items – thus reducing risk associated with holding these volatile commodities directly. Each synth has a unique ticker symbol corresponding with its respective asset type like sUSD for US Dollar synthetics or sBTC for Bitcoin synthetics etc., so it’s easier for traders to identify them among hundreds of other synths available on the exchange platform at any given time.

## How Does Staking Work?
Staking is one way by which users can earn passive income through the use of Synthetic Tokens (SNX). This process involves locking up some amount of SNX tokens into their wallets in order to receive rewards paid out in Ether (ETH), along with discounted rates when trading certain products within the platform itself; this incentivizes longer term holders rather than short term speculators who may not be interested in taking part due diligence activities required before investing large sums into crypto projects . Furthermore, stakers also help increase overall security levels since they act like validators verifying transactions happening between parties involved each trade executed within system parameters set beforehand – making sure everything goes according smoothy no matter what happens outside blockchain environment .

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