Synthetix Docs
  • User Docs
  • Synthetix Exchange
  • Leveraged Tokens
  • For Developers
  • Orientation
  • Synthetix Overview
  • Development Progress
  • V3 FAQ
  • For Developers
    • Technical Architecture
    • Quick Start
      • Base Quickstart
    • Smart Contracts
    • Data Platform
    • Data Dictionary
    • Addresses + ABIs
    • Deployment Info
      • Mainnet
      • Sepolia
      • Sepolia Carina
      • Optimism Mainnet
      • Base Mainnet Andromeda
      • Base Sepolia Andromeda
      • Arbitrum Mainnet
      • Arbitrum Sepolia
    • Smart Contract Audits
    • Perps Market
    • Spot Market
    • Developer FAQ
  • For Perp Integrators
    • 101
    • Perps V3
    • L1 Perp (BFP)
    • Base Andromeda
    • Perps Python SDK
    • Perps V3 Keepers
  • For Liquidity Integrators
    • Creating Accounts
    • Delegating Collateral
      • Liquidity Pools
    • Liquidity Positions
      • Minting and Burning snxUSD
      • Position Liquidations
    • Base LP Guide
  • For Liquidity Pool Managers
    • Creating and Configuring Pools and Vaults
    • Collateral Vaults
      • Vault Liquidations
    • Rewards Distributors
    • Credit and Debt Distribution
  • For Derivatives Market Builders
    • Build on v3
    • Market Development Guide
    • Build on v3 FAQ
    • Operating a Market
    • Registering a Market
  • For Governance Participants
    • Synthetix Governance
    • Elections
  • For Designers
    • Design Resources
Powered by GitBook
On this page
  1. For Liquidity Integrators
  2. Liquidity Positions

Minting and Burning snxUSD

PreviousLiquidity PositionsNextPosition Liquidations

Last updated 1 year ago

The protocol generates snxUSD, a decentralized, over-collateralized stablecoin backed by the collateral deposited in the Synthetix protocol. snxUSD is an ERC-20 token used by markets integrated with Synthetix.

Minting and burning effects an account's available balance. snxUSD must be deposited before minting and withdrawn after burning.

Once a liquidity position has been created by delegating collateral, liquidity providers can take out an interest-free loan of snxUSD by "minting" it. snxUSD is minted by calling the mintUsd function. The debt of the position increases by $1 for each snxUSD token minted.

Liquidity providers may not mint snxUSD such that their position’s c-ratio drops below the Issuance C-Ratio for the relevant collateral type. The Issuance C-Ratio for each collateral type is set by governance. The getCollateralConfiguration function will return the Issuance C-ratio, represented as an integer with 18 decimal places.

snxUSD can also be used to repay loans by "burning" it. snxUSD is burned by calling the burnUsd function. This decreases the debt of a position by $1 per snxUSD burned, regardless of whether this debt was accrued from minting snxUSD or from debt distributed to it by a market. To reduce the collateral delegated to a position, debt must be repaid such that the resulting C-Ratio is above the Issuance C-Ratio.

snxUSD is integrated with to allow for secure, decentralized cross-chain transfers of snxUSD between networks with a Synthetix deployment.

Chainlink's CCIP