A decentralised finance (DeFi) platform called Synthetix (SNX) enables users to create, trade, and hold synthetic assets, sometimes referred to as "synths," which are digital assets that mimic the value of actual assets like stocks, commodities, and currencies. Smart contracts are used to create synths on the Ethereum blockchain, and the SNX token serves as their backing.
The company Synthetix was first introduced in 2017 by Kain Warwick and Justin Moses as "Havven." The platform's initial focus was on developing nUSD, a stablecoin backed by a variety of cryptocurrencies. To create a decentralised platform for producing and trading synthetic assets, Synthetix changed its name from Havven to Synthetix in 2018 and broadened its offering beyond stablecoins.
The purpose of Synthetix is to give users exposure to diverse real-world assets without requiring them to hold them directly. Without the requirement for a central middleman, users can develop and exchange synthetic assets that represent the value of these assets. For a variety of application cases, Synthetix enables the development of synthetic assets, such as fiat money, cryptocurrencies, commodities, stocks, and more.
Users can lock SNX tokens as collateral to mint and sell synthesisers in Synthetix's collateralized debt position (CDP) mechanism. By staking their tokens and taking part in network governance, SNX holders are also accountable for ensuring the stability of the platform.
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