What is Synthetix and how does it work?

Synthetix is a decentralized finance protocol on Ethereum that lets people trade price exposure to assets without holding them. It started out minting synthetic assets backed by its SNX token. As of October 2026, its focus is a perpetual futures exchange, often called Synthetix Perps.

What is Synthetix crypto?

In a 2018 overview, Synthetix described a system where users lock SNX in a smart contract and mint synths against it. Synths tracked real world values such as the US dollar (sUSD), other currencies and gold. Minters needed to lock far more SNX than the value they created, and a debt register tracked each minter's share of the total system debt. If synth prices moved, that debt share moved with them. Our guide to synthetic assets explains this model in more detail.

Over time the protocol spread to several layer 2 networks. Its March 2026 roadmap says the team deprecated those layer 2 markets in favor of a single exchange on Ethereum mainnet.

How do Synthetix perps work?

A perpetual future, or perp, tracks an asset's price but never expires. Synthetix Perps launched natively on Ethereum mainnet, with a private beta in the fourth quarter of 2025. Its docs describe an order book exchange with market, limit, stop-loss and take-profit orders, cross margin, maker and taker fees, and leverage limits that vary by market.

Traders deposit collateral on Ethereum mainnet and need ETH for gas. As of October 2026, the docs list USDT as the base settlement asset and WETH as accepted collateral, with WETH counted at less than its full market value. Other assets are listed as planned. Collateral is held per subaccount. Synthetix also bought the Kwenta and TLX front ends to control the trading interface. For how this category works in general, see what is a perp DEX.

What is the Synthetix Network Token (SNX) used for?

SNX was originally the collateral behind every synth. SIP-420, proposed in January 2025, changed how staking works. Holders can move their debt positions into a protocol-owned pool, often called the 420 pool, and the protocol manages that debt for them. Leaving before 12 months carries a penalty that shrinks over time, and solo stakers face a much higher collateral requirement to push them toward the pool. The roadmap says staked SNX grew to more than half of circulating supply after the change.

Trading revenue now funds buybacks of SNX and sUSD, split evenly at first. The roadmap says buybacks will go only to SNX once sUSD holds its dollar peg. The 420 pool also issues sUSD when it trades above $1 and redeems it when it trades below. A crypto buyback explains why projects do this.

What are the risks of using Synthetix?

Perps use leverage, so positions can be liquidated quickly and losses can exceed what a trader expects. sUSD has traded away from its dollar target before, which is why the roadmap set a goal to restore its peg. Synthetix's design has changed many times since 2018, so older guides may describe features that no longer exist.