Synthetix Network Token (SNX) is another of our 20 new ERC-20 tokens.
We think it’s the perfect time to get reacquainted - so let’s see what SNX is all about and how it powers the Synthetix platform!
SNX is the native cryptocurrency of the Synthetix platform, a protocol that allows users to mint new crypto assets that mimic the value of both crypto and traditional assets. Synthetix enables this service through code and without the need for banks or financial intermediaries.
These new assets (known as “synths”) are generated through the collateralisation process. To do this, users must first buy the SNX token. From there, the tokens get locked into a special contract, which is then used to generate the synths. According to software rules, the value of SNX must remain at or above 750% of the value of the newly created synth.
Synths can be created to mimic the value of any asset. For example, a synth that mimics the US Dollar’s value is called “sUSD”. Likewise, you can also generate crypto synths, such as sBTC. Synths can also track the value of other assets using data feeds known as oracles, which allow users to get exposure to gains or losses in their respective markets.
SNX was founded by Kain Warwick in 2018. The Synthetix platform was originally named Havven, and its goal was to create cryptocurrencies that could mimic the performance of traditional assets. During its launch, it managed to raise $30 million by selling 60 million HAV tokens.
Havven rebranded to Synthetix at the end of 2018. It was also during this time that its focus shifted to creating synthetic assets for other currencies.
SNX’s main purpose is to be used to create synths. However, being a typical cryptocurrency, you can also buy and exchange it for other crypto or traditional currencies. Get your hands on some STX in the Wirex app at exclusive OTC rates today!
Users can also earn staking rewards with SNX. By locking it in a special contract, they’re able to earn additional tokens in return. This incentivises them to support the Synthetix network.