Token Description & Project Background
Synthetix is a decentralized finance (DeFi) protocol built on Ethereum that enables the creation of synthetic assets ("Synths"). These ERC-20 tokens track the value of real-world assets (like commodities, fiat currencies, or stocks) without requiring direct ownership. Key features include:
- SNX Token Utility: Acts as collateral (600% ratio) for Synth issuance and grants governance rights
- DAO Governance: Transitioned from a foundation to a decentralized autonomous organization in 2020
- Founding: Launched as Havven in 2017 by Kain Warwick, raising $30M in its token sale
Comprehensive Risk Analysis
General Crypto Investment Risks
- Market Volatility: SNX price fluctuates significantly
- Regulatory Uncertainty: Evolving global crypto regulations
- Technical Risks: Smart contract vulnerabilities despite audits
- Liquidity Constraints: Potential trading limitations during market stress
SNX-Specific Risks
- Governance Dependence: Protocol upgrades depend on SNX holder votes
- Collateral Requirements: High staking ratios may limit participation
- Adoption Risks: Success hinges on Synth utility and trader demand
👉 Discover how Synthetix compares to other DeFi platforms
Uphold's Listing Evaluation Criteria
The platform assessed SNX based on:
Technical Factors:
- Open-source code audits
- Blockchain security protocols
- Developer community growth
Economic Factors:
- Token supply mechanics
- Market liquidity profiles
- Utility within Synthetix ecosystem
Legal Compliance:
- Regulatory status across jurisdictions
- Historical enforcement actions
Investor Due Diligence Checklist
Before considering SNX:
- Research Synthetix's official documentation
- Monitor governance proposals on SNX forums
- Review staking reward mechanics
- Assess personal risk tolerance
👉 Learn about staking SNX tokens securely
Frequently Asked Questions
What determines SNX token value?
SNX price reflects:
- Demand for synthetic assets
- Staking reward rates
- Ethereum network conditions
- Overall DeFi market trends
How does Synthetix maintain price stability?
Through:
- Over-collateralization (600% ratio)
- Dynamic fee adjustments
- Oracle-fed price feeds
- Protocol-controlled debt pools
Can SNX tokens be staked anywhere?
Primary options include:
- Synthetix staking dashboard
- Selected DeFi platforms (with varying APYs)
- Some centralized exchanges
What's the minimum investment timeframe?
Given crypto volatility:
- Short-term: High-risk trading
- Medium-term (1-3 years): Protocol growth betting
- Long-term: DeFi adoption play
Key Takeaways for Investors
- Position Sizing: Allocate only risk-capital portions
- Diversification: Balance with other crypto/DeFi assets
- Active Monitoring: Track governance proposals
- Security Practices: Use hardware wallets for long-term holdings
Last updated: June 2023 | Content for informational purposes only