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What is Synthetix – SNX Coin Explained
Decentralized finance on the blockchain is becoming increasingly popular. With this popularity, new forms of assets emerge, like tokenized derivatives. These derivatives are called “synthetic assets” which refers to a mix of assets that have the same value as another asset. Derivatives are products including options, futures, collateralized loans, and prediction markets, where an arrangement or instrument has a value derived from the underlying assets, like a stock, bond, interest rate, commodity, or currency. It is a security whose underlying asset dictates its pricing, risk, and basic term structure. The only difference between derivatives and synthetic assets is that derivatives provide customized exposure to underlying positions or assets, while synthetic assets are tokenized representations of those positions. In short, synthetic assets create a blockchain record for the relationship between the underlying asset and the purchaser. Crypto synthetic assets also offer users all the benefits of decentralization, as they are open to all users across borders, by using secured smart contracts and other instruments, and the data is stored on distributed ledgers. Today we will investigate a network more than this. Let’s discover the Synthetix blockchain, which is the derivatives liquidity protocol and financial primitive enabling the creation of synthetic assets. #Synthetix #SNX #blockchain