In this episode of the Fundamentals podcast, we're joined by Kain Warwick, the founder of Synthetix – a derivatives liquidity protocol providing the backbone for derivatives trading in DeFi.
Synthetix is built on Ethereum and OP Mainnnet. How it works is that synthetic assets, and associated products, are collateralized by stakers via the SNX token, which when locked in a staking contract enables the issuance of synthetic assets, called synths. This pooled collateral model allows users to perform conversions between synths directly with the smart contract, avoiding the need for counterparties.
In this episode with Kain, we discuss the initial vision behind Synthetix and how V3 aims to fulfill this goal, we cover the lessons learned along the way, recap the fundamentals of Synthetix’s economic model and discuss the state of revenues, inflation, SNX staking, and maintaining the general health of the protocol. We also speak about how Synthetix is currently positioned within the market and where they see the biggest opportunities, increasing demand for trading on Synthetix, how the current tech stack will scale, the core contributors behind the project, current drivers and challenges, and more.
Synthetix’s dashboard on Token Terminal: https://tokenterminal.com/terminal/projects/synthetix
Synthetix:
Site: https://synthetix.io/
Twitter: https://twitter.com/synthetix_io
Kain: https://twitter.com/kaiynne
Make sure to leave a comment if you have any questions 🙌
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Timestamps:
00:00 Introduction
02:30 The initial vision and goal behind founding Synthetix
03:58 The venture case for Synthetix
06:13 Lessons learned that have led to the development of V3
10:14 How V3 fulfils what Synthetix set out to achieve in the early days
13:45 The effects of evolving into a permissionless liquidity layer
18:24 Synthetix’s economic model
23:07 SNX staking: maintaining the health of the protocol
25:08 SNX staking: encouraging all SNX holders to stake their tokens
27:02 SNX staking: introducing new collateral assets
28:24 Synthetix’s current user base & attracting new traders
30:52 What assets does Synthetix have a competitive edge for?
35:33 Driving adoption: user experience vs. number of assets listed
36:52 Is an optimistic rollup’s performance enough?
39:17 Building liquidity infrastructure and user-facing products in parallell
43:03 The team behind Synthetix
45:56 Kain’s role at Synthetix
48:04 The current state of revenue generated on Synthetix & thoughts on how it will develop
52:04 What metrics and KPIs are best suited to measure/value derivatives exchanges?
55:30 Are token incentives an expense for Synthetix?
59:05 The biggest opportunities for Synthetix in the coming years
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The following content is meant purely for educational and informational purposes, and should not be relied upon as financial, investment, legal, tax or any other professional advice.
The authors of this content, or members, affiliates, or stakeholders of Token Terminal may be participating, or are invested, in protocols or tokens mentioned herein. The foregoing statement acts as a disclosure of potential conflicts of interest and is not a recommendation to purchase or invest in any token or participate in any protocol.
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Fundamentals