Synthetix will become the best liquidity layer for the perpetual trading landscape

on Optimism

I. Synthetic assets

Synthetic assets are products that track the price of an underlying asset without

holding the underlaying assets yourself. Benefits of Syths include:

Reduce friction during trading.

Access to a wider range of assets

II. What is Synthetix?

#Synthetix is a liquidity layer built on top of @optimismFND and Ethereum.

Similar to #GMX , $SNX stakers provide liquidity to collateralizes synthetic

assets while the liquidity underwrites the trading of perpetual and synths at the

oracle price.

Synthetix liquidity supports 2 major synthetic assets:

Spots Synths

Perpetual futures

Meanwhile, Kwenta on Synthetix has seen significant trading volume on Optimism

since the upgrade to Perps V2.

But how does it work? To understand, let's start with the basics.

III. How Synthetix works?

Users stake $SNX to mint sUSD, with a minimum C-ratio of 500%.

Upon minting sUSD, users will be issued debt.

Active debt represents user's debt share in the global debt pool, while Issued debt is the debt that the user has during minting.

Traders loss is your gain

When a trader experiences losses his loss lowers the global debt pool's total

value in turn, reducing the average debt among all stakers.

Too complicated? let's use an example.

A mint $100sUSD, issue with 100 debts

B mint $100sUSD, issue with 100 debt

Each user has 50% of the debt pool share (100/200)

A trade sUSD for sETH, loss $50 sUSD, which lower the debt pool to 150/200.

B is issued with 75 debt (50%) now thanks to the trader losses.

Conversely, a trader's win results in staker's loss, as the total value of the global debt pool increases.

As of now, the total debt issued is $126M, with the composition: sUSD (57%) sETH (20%) sBTC (13%)

What's more,

#Synthetix V3 has taken this to the next level.

IV. Synthetix V3 and upgrades

First, Why V3?

In #Synthetix V2, the price of $SNX is unstable, which has affected the stability of the

single-collateral debt pool, and in turn, hindered the scalability of Synthetix.

To overcome the problems, Synthetix team introduced V3.

Synthetix V3 has core features:

Multi-collateral staking

Permissinless pools

Cross-chain

These upgrades are designed to enhance the liquidity, derivatives provision, and the growth of Synthetix.

Among them, multi-collateral staking is especially noteworthy.

V. Metrics

Synthetix V3 is not live yet, however, since the launch of Perps V2, the Synthetix

volume has been consistently rising.

It hit an all-time high volume of $490M on 16/3, with Perps being the most

significant contributor to the volume.

More volume = Higher Fees

Over the past 30 days, Synthetix earned > $3.8M fees from Perps + Spots on L2, and

some atomic swap on L1, reflecting the success of Perps V2.

With whales like @Rewkang joining the ecosystem recently, I'm really excited for

the upcoming V3 upgrade.

- Polkadot: Crypto analyst Michaël van de Poppe predicts a rally to $15, highlighting a "massive opportunity" within the current bull market.
- Synthetix: Considered an "underperforming asset," entry is recommended either above $5 or below $1.5.
- Arbitrum: Anticipated to dip to $1.40-$1.60 before potentially reaching $3-$4.
- Chainlink: Poised for significant gains, with a potential target of $25 attributed to robust support levels.
- Polygon: Expected to climb towards $1.25-$1.50, supported by higher timeframe support and liquidity intake.
The crypto market is showing signs of heating up, hinting at the imminent arrival of a bull market. While significant market-wide price movements have yet to materialize, the anticipation is palpable. So, which altcoins are poised to reap the biggest gains?
Renowned crypto analyst Michaël van de Poppe shares some insightful perspectives:
1. Polkadot (DOT): Van de Poppe suggests that Polkadot, currently trading around $6.95 according to Coingecko, has the potential to surge to $15. Despite a modest 3% uptick in the last 7 days, Polkadot's resilience amidst market fluctuations presents a compelling opportunity within the bullish trajectory.
2. Synthetix (SNX): Priced at $3.21, Synthetix has encountered sluggish performance post-rejection from $4.9. Van de Poppe views SNX as an underperforming asset, recommending entry only upon a breakout above $5 or a fakeout below $1.5.
3. Arbitrum: With a current price of approximately $1.86, Arbitrum has witnessed a notable uptick of nearly 5% in the last day. Van de Poppe suggests a potential entry opportunity around the $1.40-1.60 area, indicating a possible rally to $3 - $4.
4. Chainlink (LINK): Trading at $15 and exhibiting strong bullish sentiment, Chainlink appears poised for further gains. Van de Poppe predicts a potential surge to $25, citing the cryptocurrency's resilience in holding crucial support levels.
5. Polygon (MATIC): Currently trading around $0.8, Polygon has demonstrated bullish momentum, with a 3% increase in the last day. Van de Poppe anticipates further upward movement, potentially reaching the $1.25-1.50 region.
As the crypto market evolves, it's essential to conduct thorough research and exercise caution when making financial decisions. Voice of Crypto aims to provide accurate and up-to-date information, but users are encouraged to make their own informed choices.
[Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.]
#Polkadot #Synthetix #Arbitrum #Chainlink #Polygon