Synthetix V3 - User Docs

Introduction to Synthetix V3

Synthetix V3 Overview

Synthetix is a decentralized finance (DeFi) protocol that serves as a liquidity layer for the creation of derivative markets. It's open-sourced and written in Solidity, suitable for deployment on EVM-compatible blockchains. Governance of the protocol is managed through DAOs, notably the Spartan Council, which oversees upgrades and configuration changes, labeled as SIPs and SCCPs.

Liquidity providers can delegate collateral to liquidity pools in the protocol, which allows them to obtain loans in the form of sUSD stablecoins. This mechanism is conceptually similar to other DeFi protocols such as Liquity and MakerDAO.

A distinctive feature of Synthetix is its allowance for liquidity pool managers to configure pools that extend credit to derivative markets. These markets interface with decentralized oracle networks (like Chainlink and Pyth) to access off-chain asset prices and subsequently mint on-chain derivatives. By extending credit to these markets, it ensures order fulfilment for traders, and in return, markets can collect fees, providing an incentive for liquidity providers to manage their positions' debt.

Synthetix V3 is open, meaning any individual or entity can interact with its core system and the associated market implementations.

Overview

At its core, Synthetix V3 is a decentralized liquidity provisioning protocol built on Ethereum and other EVM-compatible chains. It introduces a modular architecture and a flexible liquidity provisioning system, addressing the challenges faced by traditional onchain derivative platforms, such as liquidity sourcing and infrastructure scaling.

Key components of Synthetix V3 include:

  1. Vaults: Collateral vaults where stakers deposit various supported collateral types, such as SNX, ETH, or stablecoins.

  2. Pools: Liquidity pools that aggregate collateral from multiple vaults and allocate it to different derivative markets.

  3. Markets: Derivative markets that represent specific derivative products and utilize allocated liquidity for trading and risk management.

    1. Rewards Distributors: Smart contracts that allow pool owners to customize the distribution of rewards to stakers based on various criteria.

Synthetix V3 offers significant benefits for all participants in the ecosystem:

  • Stakers can earn rewards by contributing collateral to the protocol.

  • Liquidity Providers can earn a share of trading fees by supplying liquidity to high-demand markets.

  • Integrators can build upon Synthetix V3's functionality to create new and innovative financial instruments.

Synthetix Perps: A Flagship Product

Synthetix Perps, the protocol's flagship perpetual futures exchange, is a prime example of the power and flexibility of the Synthetix V3 infrastructure. Building on the success of Perps V2, which achieved over $50 billion in trading volume and generated more than $38 million in fees for liquidity providers, Perps V3 introduces a suite of upgrades designed to enhance the trading experience:

  • Native Cross-Margining: A unified margin system for efficient position management.

  • Expanded Collateral Options: Support for a wide range of synths, including sETH and sBTC.

  • MEV-Resistant Liquidations: Gradual, configurable liquidations for a fairer trading environment.

  • Deterministic Settlements: Enhancements to minimize frontrunning and improve trading efficiency.

  • NFT-Based Accounts: Transferable accounts and granular permissions via NFTs.

Synthetix Perps V3 is set to launch on various networks, including Base and Ethereum Mainnet, catering to diverse users and supporting various trading strategies.

Getting Started

To get started with Synthetix V3 and explore its features, visit the following resources:

Join the Community

To stay up-to-date with the latest developments and connect with the Synthetix community, join us on:

Synthetix V3 is poised to shape the future of decentralized derivatives, empowering users, liquidity providers, and integrators to unlock the full potential of decentralized finance.

NextTrading Synthetix Perps V3

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