Synthetix / US Dollar (SNX/USDT) Token Analysis 11/09/2023Fundamental Analysis:
Synthetix is in the process of constructing a decentralized liquidity provisioning protocol accessible for various purposes by any protocol. Its substantial liquidity and minimal fees act as the infrastructure for numerous exciting protocols on both the Optimism and Ethereum networks. A multitude of user-facing protocols within the Synthetix ecosystem, such as Kwenta (Spot and Futures), Lyra (Options), Polynomial (Automated Options), as well as 1inch & Curve (Atomic Swaps), harness Synthetix liquidity to empower their functionalities.
Synthetix is developed on the Optimism and Ethereum mainnet platforms. The Synthetix Network is secured by collateral in the form of SNX, ETH, and LUSD, enabling the creation of synthetic assets known as Synths. These Synths mimic and generate returns based on underlying assets without necessitating direct possession of the assets themselves. This pooled collateralization paves the way for a variety of on-chain, composable financial instruments supported by liquidity sourced from Synthetix.
Some of the most highly anticipated forthcoming releases from SNX include Perps V2, which seeks to enable cost-effective on-chain futures trading by leveraging off-chain oracles, and Synthetix V3, designed to rebuild the protocol in line with its original objective of becoming a fully permissionless derivatives protocol. You can find more information about Synthetix on their blog or by joining the SNX Discord community.
The platform's mission is to expand the cryptocurrency realm by introducing non-blockchain assets, thereby granting access to a more expansive and robust financial market.
Synthetix operates as a decentralized exchange (DEX) and serves as a platform for synthetic assets. Its architecture is designed to provide users with exposure to underlying assets through synths, eliminating the need to hold the actual assets themselves.
This platform empowers users to autonomously trade and exchange synths, while also offering a staking pool where SNX token holders can stake their tokens and receive rewards in the form of a share of transaction fees from the Synthetix Exchange.
To track the underlying assets, Synthetix employs smart contract price delivery protocols known as oracles. This approach ensures that users can seamlessly trade synths without encountering liquidity or slippage issues, and it eliminates the requirement for third-party intermediaries.
SNX tokens play a crucial role as collateral for the minting of synthetic assets. Whenever synths are generated, SNX tokens are locked up within a smart contract.
Since its inception, the protocol has transitioned to the Optimistic Ethereum mainnet to mitigate gas fees on the network and reduce oracle latency.
The SNX token is compatible with Ethereum’s ERC20 standard. The Synthetix network is secured through proof-of-stake (PoS) consensus. Synthetix holders stake their SNX and earn returns from the network fees.
Another way for SNX stakers to earn rewards is via the protocol’s inflationary monetary policy, known as staking rewards.
The maximum supply of SNX is 323,506,696 coins, of which 269,871,212 SNX is in circulation as of September 2023.
At the seed round and token sale stages, Synthetix sold more than 60 million tokens and was able to raise $30 million. Of the total 100,000,000 coins issued during the ICO, 20% was allocated to the team and advisors, 3% to bounties and marketing incentives, 5% to partnership incentives and 12% to the foundation.
The network was initially launched in September 2017 by Kain Warwick under the name Havven (HAV). Approximately a year later, the company underwent a rebranding, adopting the name Synthetix.
Kain Warwick, the founder of Synthetix, also holds a position as a non-executive director at the blueshyft retail network. Before establishing Synthetix, Warwick had been involved in various other cryptocurrency projects. Additionally, he is the founder of Pouncer, a live auction site exclusive to Australia.
Peter McKean, serving as the project's CEO, boasts over two decades of experience in software development. Prior to his role at Synthetix, he worked as a programmer at ICL Fujitsu.
Jordan Momtazi, the COO of Synthetix, brings to the team his expertise as a business strategist, market analyst, and sales leader, with a wealth of experience in blockchain, cryptocurrency, digital payments, and e-commerce systems.
Justin J. Moses, the CTO, formerly held the position of director of engineering at MongoDB and served as the deputy practice head of engineering at Lab49. He also co-founded Pouncer.
Technical Analysis:
As we observe, the price has experienced a decline from its all-time high (ATH) of $29 and is currently fluctuating within the Fibonacci retracement levels of 88.6% and 95%. Within this range, there are two noteworthy price support zones at $0.8 and $0.3.
We have identified three potential price targets:
First Target Price (1TP): $28.8
Second Target Price (2TP): $36.5
Third Target Price (3TP): $46.5
Furthermore, we can regard the major Fibonacci retracement levels as potential resistance levels, which we have indicated on the chart.
Sentiment Analysis:
Considering the possibility of depreciation in the total market capitalization of cryptocurrencies and the price of Bitcoin (BTC) in the upcoming months, it is reasonable to consider employing a Dollar Cost Averaging (DCA) strategy for long positions at the specified support levels.
