Consultant with Bankless Consulting and Tokenomics DAO. Writer and Researcher for Web 3. Crypto Class of 2016
Consultant with Bankless Consulting and Tokenomics DAO. Writer and Researcher for Web 3. Crypto Class of 2016
Subscribe to Cloud Base Crypto
Subscribe to Cloud Base Crypto
Share Dialog
Share Dialog
<100 subscribers
<100 subscribers
Written by: Eze Kenechukwu and Joe_King
Type of Stable Coin: sUSD is a collateralized Stablecoin backed by the Synthetix Network Token (SNX).
Who is behind the project: Kain Warwick, under the name Havven, launched the network in September 2017. After a year, the company changed its name to Synthetix, after operating as a company for some time, the team decided to decentralize and become a DAO. sUSD was created by the Synthetix DAO which governs the Synthetix Protocol, Synthetix (SNX) is an Ethereum-based system that allows for the creation of synthetic assets. Synthetic commodities including gold and silver, synthetic cryptocurrencies, synthetic inverse cryptocurrencies, synthetic cryptocurrency indexes, and synthetic fiat currencies are all supported by Synthetix. The platform expands the crypto ecosystem by allowing non-blockchain assets to participate, resulting in a more mature financial market.
Reserve / Peg Mechanism: A stable peg is maintained when there is a balance between supply and demand. The sUSD peg is generally maintained by ensuring that the Synthetix products are of high quality and utility to the ecosystem, so far this system has helped drive demand and maintain the sUSD peg, the current stability of the sUSD peg.
The Synthetix smart contract allows SNX holders to mint sUSD by locking their SNX as collateral. When an SNX holder mints, the following processes are taken:
The Synthetix contract verifies that an SNX staker can mint Synths with their SNX, which necessitates a Collateralization Ratio of less than 400 percent.
When minting or burning sUSD, debt shares are issued to a staker to track the staker’s issued debt amount. The Synthetix contract enables the sUSD contract to issue the revised amount now that the debt has been assigned to the staker. It adds it to the total supply and places the newly created sUSD in the user’s wallet.
If the price of SNX rises, a staker’s SNX is immediately unlocked as collateral in proportion.
sUSD is collateralized by the SNX token, in addition sUSD tracks the price of the US Dollar using Chainlink Oracle data, all tokens created by Synthetix are Synths, SNX tokens underpin all Synths. Synths are created when SNX holders use Mintr, a decentralized tool for engaging with Synthetix contracts, to stake their SNX as collateral. Synths are now backed by a 750 percent collateralization ratio; however, community governance processes may raise or lower this in the future. When SNX stakers mint Synths, they incur debt, which they must repay by burning Synths in order to exit the system.
Reserve Assets / Mix: Since sUSD is a synth which is created when SNX is staked, it is not backed by any particular mix of reserves, it is collateralized by the SNX token which powers the Synthetix Protocol.
Where can it be used: sUSD is primarily used on the Ethereum blockchain, there a number of products where sUSD can be used: Kyber Network, bzx, KuCoin, Gate.io, Curve Finance, SushiSwap, Hotbit, Zipswap etc.
Places to borrow or lend: Currently sUSD can be lent on Aave for 46.53% and borrowed for 63.32% on Aave, while on Fulcrum sUSD can be borrowed for 8%.
sUSD has proven that a peg can be maintained by ensuring that demand meets supply for the Stablecoin, by building sUSD as an integral part of the Synthetix ecosystem and backing the Stablecoin with the SNX the Synthetix native token, the builders have ensured that the value created by the Synthetix ecosystem is channeled into maintaining the peg of sUSD, in addition to bootstrapping liquidity on Curve and Uniswap, sUSD has a lot more backing through the value created by the Synthetix Protocol.
Written by: Eze Kenechukwu and Joe_King
Type of Stable Coin: sUSD is a collateralized Stablecoin backed by the Synthetix Network Token (SNX).
Who is behind the project: Kain Warwick, under the name Havven, launched the network in September 2017. After a year, the company changed its name to Synthetix, after operating as a company for some time, the team decided to decentralize and become a DAO. sUSD was created by the Synthetix DAO which governs the Synthetix Protocol, Synthetix (SNX) is an Ethereum-based system that allows for the creation of synthetic assets. Synthetic commodities including gold and silver, synthetic cryptocurrencies, synthetic inverse cryptocurrencies, synthetic cryptocurrency indexes, and synthetic fiat currencies are all supported by Synthetix. The platform expands the crypto ecosystem by allowing non-blockchain assets to participate, resulting in a more mature financial market.
Reserve / Peg Mechanism: A stable peg is maintained when there is a balance between supply and demand. The sUSD peg is generally maintained by ensuring that the Synthetix products are of high quality and utility to the ecosystem, so far this system has helped drive demand and maintain the sUSD peg, the current stability of the sUSD peg.
The Synthetix smart contract allows SNX holders to mint sUSD by locking their SNX as collateral. When an SNX holder mints, the following processes are taken:
The Synthetix contract verifies that an SNX staker can mint Synths with their SNX, which necessitates a Collateralization Ratio of less than 400 percent.
When minting or burning sUSD, debt shares are issued to a staker to track the staker’s issued debt amount. The Synthetix contract enables the sUSD contract to issue the revised amount now that the debt has been assigned to the staker. It adds it to the total supply and places the newly created sUSD in the user’s wallet.
If the price of SNX rises, a staker’s SNX is immediately unlocked as collateral in proportion.
sUSD is collateralized by the SNX token, in addition sUSD tracks the price of the US Dollar using Chainlink Oracle data, all tokens created by Synthetix are Synths, SNX tokens underpin all Synths. Synths are created when SNX holders use Mintr, a decentralized tool for engaging with Synthetix contracts, to stake their SNX as collateral. Synths are now backed by a 750 percent collateralization ratio; however, community governance processes may raise or lower this in the future. When SNX stakers mint Synths, they incur debt, which they must repay by burning Synths in order to exit the system.
Reserve Assets / Mix: Since sUSD is a synth which is created when SNX is staked, it is not backed by any particular mix of reserves, it is collateralized by the SNX token which powers the Synthetix Protocol.
Where can it be used: sUSD is primarily used on the Ethereum blockchain, there a number of products where sUSD can be used: Kyber Network, bzx, KuCoin, Gate.io, Curve Finance, SushiSwap, Hotbit, Zipswap etc.
Places to borrow or lend: Currently sUSD can be lent on Aave for 46.53% and borrowed for 63.32% on Aave, while on Fulcrum sUSD can be borrowed for 8%.
sUSD has proven that a peg can be maintained by ensuring that demand meets supply for the Stablecoin, by building sUSD as an integral part of the Synthetix ecosystem and backing the Stablecoin with the SNX the Synthetix native token, the builders have ensured that the value created by the Synthetix ecosystem is channeled into maintaining the peg of sUSD, in addition to bootstrapping liquidity on Curve and Uniswap, sUSD has a lot more backing through the value created by the Synthetix Protocol.
No activity yet