Minting and Burning snxUSD

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 snxUSD must be deposited before minting and withdrawn after burning.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 Chainlink's CCIP to allow for secure, decentralized cross-chain transfers of snxUSD between networks with a Synthetix deployment.