Thread by @TheDeFinvestor

/1 Imagine a world where you can lend a token that tracks the price of S&P 500 and borrow against it🤩...

This will be possible once #Synthetix V3 comes out👀

Join me for a 🧵 on how Synthetix V3 will reshape the #DeFi Industry👇

/2 Firstly, if you don't know what Synthetix is or you would like to understand better how it works, I got you covered!

Here's a thread about Synthetix:

https://twitter.com/TheDeFinvestor/status/1550171266224492544

/3 The problems of Synthetix V2

When you mint Synths as a $SNX staker, you will own a % of the debt pool.

Your debt can increase or decrease based on the price volatility of the all Synths that were minted.

So stakers may sometimes discover that their debt increased🔴

/4 To ensure that the stakers debt doesn't fluctuate very much, the Spartan Council needs to approve the creation of new Synths.

So the creation of very volatile Synths isn't possible.

Spartan Council - a governing entity responsible for approving proposed changes to Synthetix

/5 Here Synthetix V3 comes in 👇

V3 main benefits:

-Permissionless asset creation - anyone will be able to create a Synth that tracks the price of any asset🤯
-better control of credit - stakers will choose the assets they want to collateralize
-Differentiated Debt Pool

/6 "But ser, you said that the creation of volatile assets can affect and eventually increase the $SNX stakers debt!"

That's true, but this is happening only in Synthetix V2!

As I said, in Synthetix V3 stakers will be able to choose the assets they collateralize.

/7 If someone wants to create a Synth that tracks the price of a new very volatile token, he can do it as long as there's a price feed supplied by an oracle for it!

The problem for him/her is that most $SNX stakers may not want to collateralize that asset.

/8 Considering that stakers will select the assets they collateralize, the volatility of their debt will depend only on the price movement of the assets they chose!

If a staker doesn't want to be exposed to the debt pool volatility, he will be able to collateralize only sUSD!

/9 Other Synthetix V3 updates:

- $veSNX (similar to $veCRV model, staking rewards will depend on how much time you lock your $SNX)

- Simplified Staking (probably a cleaner staking interface)

- easier integration with Synthetix for other protocols

/10 But one question remains:

Why would $SNX stakers choose to collateralize the volatile assets?

Stakers will receive fees only from the pools they collateralize.

E.g.: If there's high demand for sETH, those who collateralize sETH pool will receive higher rewards.

/11 That's all!

I'm impatient to see if there will be any protocol that will bribe $SNX stakers to collateralize their synthetic assets👀

If you found this thread helpful, please leave a like and retweet the 1st tweet. 🤝

/12
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