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DeFi Dive: Synthetix — A protocol for issuing and trading synthetic assets on Ethereum

DeFi Dive: Synthetix — A protocol for issuing and trading synthetic assets on Ethereum

In this edition of DeFi Dive, we’re joined by Synthetix Founder Kain Warwick who shares his unique experiences which lead to the creation of DeFi’s second biggest DApp.

How did you get your start in crypto and what inspired you to build your project, product, or service?

I’d been involved in several startups in my twenties and founded blueshyft five years ago. It’s become the largest cryptocurrency payment gateway in Australia, processing over two hundred million dollars in deposits since launch. My experience with blueshyft and in retail exposed me to crypto and showed me the need for a decentralised stablecoin, so I launched Havven to build that. Once it became clear that the market was mostly satisfied with centralised stablecoins and DAI, we pivoted Havven to Synthetix, which uses the same pooled collateral model but supports the issuance and trading of a variety of synthetic assets

What are you building and what sets it apart?

The project really has two components: Synthetix, the underlying protocol; and Synthetix.Exchange, our exchange for trading the synthetic assets enabled by the protocol. Synthetix involves people locking cryptocollateral (which is the staking process) to issue these assets (called Synths). Stakers then receive fees generated by users trading these assets on Synthetix.Exchange. All trading is done peer-to-contract (P2C), so it’s the only decentralised exchange without any liquidity or slippage issues.

Who do you view as the ideal user or customer for your product or service?

Synthetix.Exchange is for traders, specifically anyone looking to gain exposure to a range of assets with zero slippage, without trusting a centralised party. We’ll continue to introduce new trading features along with additional assets to increase its appeal to a greater range of traders.

As far the protocol goes, it relies on people staking cryptocollateral (our token, SNX). But it’s quite a complex series of mechanisms, so it’s definitely not for the inexperienced. There are various responsibilities stakers need to take on including managing their debt. The yield is also actively managed with stakers needing to fix collateralization ratios before redeeming rewards — there’s definitely regular input required from stakers.

What future event or feature on your roadmap are you most excited for?

This year we’re focusing on building out more trading features on Synthetix.Exchange, and you can read the full product roadmap on our blog. The ones I’m most excited for are binary options, leveraged Synths, synthetic futures, and Optimistic Rollups.

Where do you see your project, product, or service fitting into the future of DeFi?

A bit of a popular meme in our community is that Synthetix.Exchange can be a ‘decentralised Bitmex.’ This obviously relies on our executing the various trading features I just mentioned, but it’s certainly where we’re heading

What’s something in DeFi that you think more people should be paying attention to?

The unique potential for composability (i.e. protocols permissionlessly plugging into each other) is something that will be interesting as it plays out.

How can readers learn more about your product/service?

Starting with the litepaper is best, and then there’s a community-run page with a whole host of valuable resources to learn more at synthetix.community.


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