Synthetix (SNX) is the token of Synthetix, a decentralized finance protocol that began as a way to create on-chain "synths", tokens that track the price of dollars, other currencies, cryptocurrencies or commodities without holding the underlying asset. SNX is staked as collateral behind those positions, is used in governance and earns a share of trading fees. Since 2025 the protocol's main product has been a perpetual futures exchange on Ethereum.
SNX is distinct from sUSD, the protocol's synthetic dollar, which was minted by SNX stakers and is meant to trade at one US dollar. Synthetix runs on the Ethereum Blockchain rather than a chain of its own, and between 2021 and 2025 most of its activity took place on layer-2 networks such as Optimism. It was founded by the Australian entrepreneur Kain Warwick.
Synthetix in plain terms
Imagine a club in which members pledge their own savings as a guarantee so that anyone can place bets on the price of gold, oil or the euro. Traders never touch a bar of gold; they simply hold a ticket whose value moves with its price. The pledged savings sit behind every ticket, so the club can always pay out what the tickets are worth.
SNX is the pledge. People who lock it up take on a share of the club's overall obligations, earn fees from the traders in return, and lose out if traders as a whole win more than expected. Over time the club changed its main game from price-tracking tickets to a trading floor for futures-style bets, but the idea of members backing the market with their own tokens has stayed at its core.
History
The project launched in 2018 as Havven, issuing a stablecoin first called eUSD and later nUSD, and was renamed Synthetix late that year, when nUSD became sUSD and the range of synths expanded. In June 2019 a faulty price feed briefly reported a wildly wrong rate for a Korean won synth, letting an automated trading bot book profits of more than a billion dollars on paper; the trades were reversed and the episode led Synthetix to adopt decentralized oracles from Chainlink. The protocol moved much of its activity to Optimism in 2021, where its perpetual markets were traded mainly through the independent front end Kwenta, and later released a modular Version 3.
In 2025 the protocol was rebuilt. It acquired Kwenta and the leveraged-token project TLX, converting their tokens into SNX, wound down its layer-2 deployments, stopped the minting of sUSD against SNX, and launched a new perpetual futures exchange with a central limit order book directly on Ethereum mainnet, opening in private beta in the fourth quarter of 2025 after two trading competitions. Warwick separately founded Infinex, a self-custodial trading app.
How staking and collateral work
Under the original system, a holder staked SNX and minted sUSD against it, taking on a share of a common debt pool: if synths held by traders rose in value, every staker's debt rose with them. Each staker had to keep a minimum collateralization ratio, calculated as:
- is the number of SNX locked multiplied by its market price.
- is the staker's share of the debt pool, measured in dollars.
A staker who locks 1,000 SNX at an assumed price of $3 holds $3,000 of collateral; with $600 of debt the ratio is . If the SNX price halves, the ratio falls to 250 percent. Stakers below the protocol's target could not claim rewards and, past a lower limit, could be liquidated. The very high ratios required made sUSD expensive to create, and the 2025 redesign replaced self-minting with pooled and delegated staking.
Uses of SNX
- Collateral. Staked SNX backs the liquidity behind Synthetix markets.
- Fee share and buybacks. Stakers earn a share of trading fees, and under the 2026 roadmap part of exchange revenue is used to buy back SNX and sUSD.
- Governance. SNX holders take part in the governance process that approves Synthetix Improvement Proposals (SIPs).
- Trading. SNX itself is listed on major cryptocurrency exchanges.
The sUSD depeg and other risks
In April 2025, after a change known as SIP-420 weakened stakers' incentives to defend the peg, sUSD fell to around $0.66, one of the deepest and longest depegs of a large dollar token. Liquidity in sUSD pools on Curve thinned and the token traded below its peg for months; in February 2026 Synthetix said it was still trading under $0.70 and set out a recovery plan based on fee buybacks and new demand from its liquidity vault. The episode showed the weakness of a stablecoin backed mainly by the issuer's own token.
Other risks include the complexity of the debt pool, which can leave stakers owing more after a market rally, reliance on oracles, losses to the liquidity vault when traders win, and competition from newer perpetual exchanges such as Hyperliquid and dYdX.