Synthetix is a decentralized derivatives liquidity protocol on Ethereum that enables the creation of synthetic assets (Synths) through its staking mechanism. Traders are able to acquire on-chain exposure to a variety of assets, including fiat currencies, stocks, commodities, and crypto, using the Synthetix platform.
All Synths on Synthetix are backed by $SNX tokens that holders have staked as collateral into the application. With a high collateralization ratio and a unique minting/burning mechanism, Synthetix offers traders the ability to trade synthetic assets in a decentralized manner with deep liquidity and zero slippage, unlike traditional decentralized exchanges.
$SNX holders are incentivized to stake their tokens in order to receive a portion of exchange fees and staking rewards.
For this tutorial, you will need:
First, head over to https://staking.synthetix.io/ and click ‘STAKE’ in the center of the page.
Next, connect your wallet that is holding your $SNX tokens. You can connect your wallet by pressing the dropdown box in the upper right corner labeled ‘NOT CONNECTED’. Be sure you are connected to the network you’d like to use (e.g. Mainnet, Optimism).
Now that you are connected, select ‘MINT MAX’ in the center of the page (note: you can also mint a custom amount if you’d prefer to try a specific staking strategy). This will populate the maximum amount of $sUSD you’ll be able to mint given your total available $SNX holdings. Once ready to proceed, click ‘MINT sUSD’ and confirm the transaction with your wallet.
After the transaction is complete, you should now have $sUSD in your wallet that you can use to purchase Synths or utilize elsewhere in DeFi. You are now officially staking your $SNX.
Every Wednesday, a snapshot is taken of all $SNX stakers, and fees and rewards are distributed accordingly. To claim the rewards, you will need to make sure your collateralization ratio (C-Ratio) is relatively close to the target ratio. You can see your current C-Ratio on the top-center of the page.
At the time of this writing, the target C-Ratio on Mainnet is 400%, and the target on Optimism is 900%. If you need to adjust your ratio back to the target, you can do this on the ‘BURN’ tab by selecting ‘BURN TO X%’ and confirming the transaction (note: you will need to make sure you have enough $sUSD in your wallet, which means you might have to purchase additional $sUSD if you are using it elsewhere).
Now that your C-Ratio is properly adjusted, it is time to claim your rewards. Hover over ‘STAKING’ on the left side-bar and select ‘EARN’.
Select the Synthetix Staking Rewards pool.
The screen that pops up will show you how much you have earned in $sUSD from trading fees and how much $SNX you have received from staking rewards. Press the claim button and confirm the transaction in your wallet to finalize the claim.
Come back each week to claim your rewards (note: rewards do not roll over from week to week).
When you are ready to unstake your $SNX, head back to the ‘BURN’ tab and select ‘BURN MAX’. Similar to reward redemptions, you’ll need to make sure you have enough $sUSD in your wallet to burn your debt. Click ‘BURN sUSD’ and confirm the transaction to unstake.
You’ve officially staked on Synthetix and claimed your rewards. Your stake is helping to provide the liquidity necessary to create advanced synthetic assets on Ethereum, enabling permissionless trading of derivatives for anyone across the globe.