SYNTHR is more than a siloed price exposure platform - we're a core #infrastructure project that will allow users to #Mint highly solvent synthetic assets that foster #composability and capital efficiency within #DeFi 🐸
Here's how we will be highly composable to DEXs ⬇️🧵
I. Yield-farming: Synthr will run #LP incentivisation programs with #DEXs , allowing users to deposit syAssets and earn $SYNTH, all whilst building deeper liquidity across these DEXs and on various #chains .
II. Enabling Atomic Swaps
Our partner #DEXs will use SYNTHR’s low-slippage swapping engine, SynthSwap, to execute atomic swaps initiated by their users.
Here's how one would use this tech to swap $ETH to $AVAX on a Partner DEX:
i. $ETH gets swapped to syETH
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ii. syETH gets swapped to syAvax (using SynthSwap)
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iii. syAVAX will get swapped to $AVAX
Atomic swaps have a use-case; on DEXs, they've demonstrably increased #trading volume when introduced in the past.
This will be accompanied by increase in daily txns on SYNTHR, which will benefit our token holders as 50% of all revenue earned via these is allotted as rewards.
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Though the ecosystem is growing remarkably quickly, being in its early stages, TVL may be slow to catch up.
Here’s how SYNTHR is accelerating this 🧵🔽
The network uses Move - a revolutionary open-source programming language for developing smart contracts initially created by @Meta to power the Diem blockchain.
A robust & sustainable fee distribution system is an integral part of any #DeFi protocol 🐸
There exist a few different models, but the two most well-regarded ones are the LP fee model (as adopted by @Uniswap ) & the Vote-escrow model (pioneered by @CurveFinance ) 🧵🔽
🟢The LP fee model (LPs provide liquidity & are issued LP tokens to earn rewards from txn fees generated on the protocol)
✅PROS: Highly sustainable in the long-run.
❌CONS: The native token (e.g. $UNI) has no real utility, & mcap is usually not indicative of protocol usage.
🟢The veToken Model (Token holders lock up tokens (e.g. CRV) to receive vote escrowed tokens in return (e.g. veCRV); holders of these earn a significant portion of protocol fees)
✅PROS: Rewards long term holders w/ the majority of governance power & passive income from proto-
The use of a censorship-resistant, fully #decentralized oracle service to ensure a trustless #DeFi ecosystem is non-negotiable in an omnichain synthetics #trading protocol like SYNTHR.
Here’s why 🧵🔽
Price Feeds are used when:
🟢Users stake $ETH & mint syUSD - To pull ETH prices to check how much syUSD can be minted as per the collateralization ratio.
🟢Liquidations occur: To determine how much amount of the syAsset is to be liquidated, how much debt must be paid off, & how much is the remainder to send to the Stability Pool.
.@synthetix_io - pioneer of the Debt Pool model & #slippage -free swaps is a highly sound #DeFi protocol, technically.
However, all synths on it are backed by their native $SNX , causing decreased usage & serving as a bottleneck for growth.
Here's how this is avoided on SYNTHR🔽
The use of its native token, $SNX as (over)collateral, poses some risk; the system depends on the value of the $SNX token being relatively stable.
If the price of $SNX were to fall quickly, it could potentially cause mass liquidations of syAssets on the Synthetix platform…
…and to prevent this & preserve collateralization ratio, the system depends on users buying more $SNX tokens. Furthermore, newer regulation also threatens to upend the $SNX -backed minting system, affecting current & future iterations of the protocol.
🟢User executes swap from #ETH to #WBTC on SynthSwap
🟢#DEX aggregator swaps ETH to syETH
🟢syETH is burned
🟢syBTC is swapped for WBTC on DEX aggregator
🟢User receives WBTC
These steps occur within one transaction from a user’s POV, & reduce #slippage costs by over 80%.
Our Atomic Swaps tech enables #DEXs and #Bridges to integrate with us, making SYNTHR a highly #composable protocol that serves utility to the wider #Crypto community; in this case, zero-to-low slippage swaps.