Synthetix Review and Opinions 2022 Is it a scam?

Want to know more about Synthetix?

How does it work?

Stocks, commodities, currencies, cryptocurrencies… They all seem like completely different worlds, but what if that wasn't the case anymore? This is exactly what Synthetix offers, to unify all these assets by creating synthetic copies of them.

In this article I will tell you everything you need to know to understand how this platform works, what you can get out of it and of course, if it is really interesting.

What is Synthetix?

Synthetix is ​​a platform that has a protocol decentralized finance (Challenge) which allows the issuance of securities or synthetic assets. These synthetic assets can be traded and interacted with other assets as if they were real assets. All this, within the framework of an (almost) completely decentralized market.

In other words, Synthetix is ​​a project that allows the creation of synthetic assets linked to real assets, whether fiat currencies, commodities or cryptocurrencies, among others. These synthetic assets allow you to obtain the properties of the assets they represent without actually owning them.

Also, Synthetix(SNX) is an altcoin(alternative cryptocurrency). Therefore, you can not only use it to create your own decentralized synthetic assets (Synths), but you can also invest in them through your favorite cryptocurrency exchange.

How is the security?

The first thing you need to know is that Synthetix is ​​a very decentralized project. With the exception of a few procedures and formalities, your entire system is free of interventions. Therefore, you will not find sophisticated security systems like those that you can find, for example, at a broker.

However, this does not mean that anyone can scam you through Synthetix. To ensure platform security, SNX runs on the Ethereum blockchain and all synthetic assets are issued using smart contracts.

More aren't there government entities that regulate it?

Like all businesses, it has its regulations. But since this is such a new thing, governments have yet to create regulations that can accommodate these business models.

And that's one of its main issues, what regulations will governments impose on projects like Synthetix in the future? Faced with such an uncertain scenario, it can be said that while the platform is currently “safe”, there is no indication that it will continue to be so in the future.

It is legitimate?

If you are considering investing in Synthetix, the first thing you need to ask yourself is whether you can trust the platform. The truth is that there is nothing to indicate otherwise, since it is an honest project and is gradually gaining popularity.

However, and as I have just told you, these are platforms that are not yet regulated. This has its advantages, but also its disadvantages, since there is no one to support you specifically in case of problems.

Is it a trap?

For the time being, there is no indication that Synthetix is ​​a scam. Beware, this should not be confused with Synthetix not being a place where you can waste your money.

Indeed, from the beginning, the project was characterized by the great transparency of its creators. This led them to get the verified Transparency Shield from Messaria, a company responsible for analyzing Fintech companies to determine if they are suspected of fraud or if, on the contrary, they are clean.

How to register?

Opening an account with Synthetix is ​​different from what you would expect from such a platform. This way you don't have to fill out a contact form, but have a cryptocurrency wallet.

So you just need to connect your wallet address or portfolio with Synthetix to start trading. But do all wallets work? Not at the moment, as of this writing, Synthetix connects to these wallets:

• Dappradar
• Trezor
• Registre
• Coinbase Wallet
• Wallet Connect
• Doors
• Other

As you can see, Synthetix works with some of the most prestigious cryptocurrency wallets in the crypto world.

After connecting your wallet, you can start trading on Synthetix. Of course, always by the Ethereum blockchain.

How does it work?

As I said, Synthetix's proposition is that anyone can create a synthetic token or asset(Synths) which represents a real asset. But for this to work, the platform must give you a series of guarantees, commissions, participations and roles to be able to operate within Synthetix.

Simply put, every time you create a synth, all of Synthetix's internal machinery kicks in to support your synth with smart contracts. More can you create synths from scratch?

Of course not, it would be like having a personal printing press and everyone could create cryptocurrencies until they became rich. To create synths, such as sUSD (a synthetic asset that represents the dollar), you need the Synthetix Network token(SNX).

However, things get a bit more complicated because not only does SNX have to be connected to the synthetic asset, but it also has to be connected to the underlying asset, i.e. the asset on which said Synth is based.

This is done through those who are called oracles. Blockchain oracles are tools that create connections between the crypto world and the real world. More precisely, the oracle used by Synthetix is ​​ChainLink.

This way, whenever the price of the real asset goes up or down, it causes a movement in the price of the Synths within the platform. Therefore, the prices of synths and real assets are linked.

But this whole business of creating synthetic assets sounds very complicated, doesn't it? To make the process easier, Synthetix has created a decentralized application called Mintr, which is used to create the synths we are talking about.

Once you have a Mintr account with funds in the form of SNX, all you have to do is tell the system that you want to tokens of a specific Synth, for example sUSD. Mintr will then take the SNX needed for the conversion (1 x 7,5 leverage) and lock them, leaving the remaining sUSD and SNX in your account.

At this point, Mintr calls the Synthetix smart contract to seal and secure the transaction.

Now you might be wondering why I want to do this trade? Well, as you can imagine, to operate with them, especially through Synthetix Exchange, the platform where you can operate with synthetic assets.

This decentralized exchange contains a large number of cryptocurrency, commodity and currency pairs that you can trade.

In this way, they facilitate the creation, investment and exchange of Synths to all users of the network.

What can you trade?

A very common question that you have surely asked yourself is, which assets can I buy on Synthetix Exchange? The truth is that there is quite a variety of assets, although over time more and more synths are being created and therefore increasing.

Concretely, you can trade several types of assets:

• Currencies: sJPY, sEUR, sGBP, sUSD, sAUD…
• Stones / material Commodities: You can invest in synthetic commodities such as sOIL, sXAU and sXAG but also inverse synthetics (you gain when the underlying asset goes down) iOIL…
• Cryptocurrency -currencies: You can invest in synthetic cryptocurrencies like sBTC, sEther and sXRP or you can invest in iBNB reverse cryptocurrencies…
• Indices and stocks: sNIKKEI, sFTSE, sTSLA…

Commissions and fees

One of the biggest advantages of Synthetix is ​​that it has a very simple commission system. To start, you only pay commissions when there is a transaction, so deposits, withdrawals and maintenance are commission-free.

And how much does this commission cost? The standard cost of the operation is 0,3% of its value. But in case you trade a long asset (sBTC) for a short asset (iBTC), the commission is doubled, i.e. 0,6%.

But remember, these commissions are per transaction, i.e. you pay them both when buying and when selling.

Pros and cons

Like all businesses related to the investment world, it is very important to keep in mind its positives and negatives.

The main advantages of Synthetix are:

1. It provides access to a large number of financial instruments from a single platform.
2. It is a decentralized platform, so you can rest easy knowing that no bureaucrats will excessively interfere with your investments.
3. You can access international markets.
4. They work with quite low commissions, especially for small investors.
5. It is in full development and its functionalities are increasing week by week.
6. Its alternative cryptocurrency SNX is available on a large number of exchanges.

The main disadvantages of Synthetix are:

1. The system they use for both creating and trading Synths is much more complex than the workings of other assets, such as stocks, ETFs, and even conventional cryptocurrencies.
2. It is not a 100% decentralized system, although this can be a plus in the event of a security problem.
3. It's unclear how regulatory entities will act in front of companies like Synthetix in the future, so it's a very risky investment.
4. It depends on Ethereum, so not only do you have to trust the Synthetix team to get it right, but also the ETH team. Moreover, ETH is also a very risky asset in the face of possible regulations that may be imposed in the future.

Notice – Final Assessment

Since this is fairly new technology, I think there is no better way to end the article than with my own opinion.

At the level of the proposal, Synthetix seems to me quite interesting, because it offers a new way of investing which can have very innovative applications.

I also love that its creators try to keep it as decentralized as possible, because that's ultimately what the cryptocurrency investing community is asking for.

We will have to see how this DeFi project develops in the future, in the midst of what seems to be a complete market revolution.

Synthetix is ​​one of the pioneers of this, so it should have an advantage, but we already know that this does not guarantee anything.

As always, time will tell.