Why Synthetix Is Up – SNX Crypto
This is the chart measured in bitcoin. We are looking at a 100 out performance since the 13th of june whats. The drivers behind this is this fundamental, or is this just simply a pump and dump? There are some really interesting facts around this recent rally and it has to do with the adoption of the platform. So synthetics is a platform that allows for trading synthetic assets, so no real assets, but assets that are backed via an algorithm right. Youve got an algorithmic arbitrage opportunity and with that arbitrage we can hold the price pack too. For example, synthetic link, synthetic solana, synthetic avalanche, but those are not the kinds of tokens that are currently pushing this. When we look at the statistics at the grafana statistics board of synthetics, we can see the trading volume is going up, so 255 million in just a single day of trading volume. If we just look at a few months ago right, this is only at like 20 million, sometimes even just one and a half million theres. Now a real great increase happening here, and where is this coming from it comes from two integrations. First of all, synthetics is now integrated with curve finance so its directly over here. When we go to the staking page, we can see we can earn eleven point four percent on the synthetic us dollar pool. So this is curve finance right, its the largest stable coin. Decentralized exchange – and here we can see the return is actually even higher than that right.
When you deposit over here in a pool with dye and usdc and tether, we get 13.5 percent base return so thats on those stable coins, and on top of that we get a subsidy of up to three percent in civ tokens and one percent in synthetic tokens. So the aggregate return we can get from this by just depositing stable coins is more than 17. Now these returns get generated with trading activity right. So you trade across these pairs right. You trade against the susd stablecoin, the synthetic us dollar and from that trading the liquidity pool providers get this return right. Parts of the trading fee gets paid out to the lp providers and when we look here at the liquidity utilization, it is really really high. Its 144 percent, so a lot of this trading is happening, and we can even see this in more detail here on dune analytics. When we run this query, we can see the synthetics volume is now currently exploding. A lot of people are trading and using the synthetics platform, and where does all of this interest come from? It comes from the synthetics protocol, so using the protocol gives infinite liquidity with zero slippage, so meaning may try to find the best trading pair that routes through a stable coin, using something that has zero slippage will give you a price advantage. Now. How can you find out about this price advantage? Why would so many people suddenly start using synthetics its because susd is now also integrated with one inch now now? This is a lot of things to now take in, but bear with me.
I hope this will make sense. Now. One inch is a decentralized exchange aggregator. So what it does is it tries to find the best prices across several decentralized exchanges, and it does so by routing your order. So when you trade one token for another, it might not go directly from that token to the other. It might go across several different decentralized exchanges. It routes your order, through whatever combination of different decentralized exchanges, gives your best price and when one inch does this, it will also look at susd. So when you trade, one particular crypto asset to another particular crypto asset, maybe its the cheapest not to route via die or via usdc, maybe its the cheapest to route via susd. Simply because of this fancy, infinite liquidity, zero slippage protocol, and so the integration with curve finance combined with one inch leads to a lot of demand that the user themselves might not even be aware of one inch simply routes the order through susd, which then creates all Of this volume – and this is then in the end, the reason why the price of snx is going up right, theres, much more usage, and so you might even consider buying snx and getting 50 staking reward on this right. So you can stake your snx over here. Simply go to staking.synthetics.io and on top of the price appreciation you get 50 per annum return through the mechanism now lets have a quick look at the technical analysis as well, because its really important that this kind of a mechanic will continue right.
We dont know how long this might last and if this will just be a temporary thing, so lets quickly look at the ta. This is what were getting so this is snx versus bitcoin. Over the very long term. We actually did see a slide out performance 160. So this chart starts in march of 2018.. When we look at the us dollar chart, we can see that we are now in a downtrend since january of 2021. Will this now break with the recent adoption? Nobody knows right. This is influence of the overall crypto market. This is then, where discussion around fat tightening comes in. This is where the deleveraging comes in. If youre interested on my stance on the overall crypto market, then dont forget to check out the premium membership of this channel, which is currently 49 us per month. Theres, a new video every single day and we discuss all of these content in the exclusive premium telegram channels over here now this is the us dollar chart of synthetics. When we look at the relative valuation to ethereum. This is what we are getting so here. We have already broken out of the negative momentum right. We are now somewhat inside whats consolidation. Can we break out over here im relatively optimistic? Ethereum itself has pretty bearish momentum right now. Synthetics has real adoption behind the current move, its not just a pump and dump theres real usage going on here. So, of course, whether or not it makes sense to buy snx right now very much depends on your risk.
Tolerance, betting on altcoins in this current environment is risky, but if you have already decided that this is a kind of risk youre willing to take, then at least with the information of this video, you can be rest assured that this is not just a random influencer. Pushing this, this is actual technical development that led to all of this demand increased adoption due to the integration with curve finance and one inch if you havent, yet subscribed, feel free to do so, because i do publish videos regularly and a like on this. Video would be appreciated as well, because it will help the channel grow. Last but not least, dont forget the premium membership. The link is in the video description.