Synthetix is a decentralized liquidity provisioning protocol built on Ethereum and Optimistic Ethereum (a layer two scaling solution built on Ethereum). Synthetic assets, and associated products, are collateralized by stakers via Synthetix Network Token (SNX), which when locked in a staking contract enables the issuance of synthetic assets (synths). This pooled collateral model allows users to perform conversions between synths directly with the smart contract, avoiding the need for counterparties. This mechanism solves the liquidity and slippage issues experienced by DEXs.
Synthetix liquidity powers a range of derivatives and on-chain financial instruments. You can learn more about the two types of synthetic assets that protocols will integrate to create on-chain derivatives.
The Synthetix Protocol does not operate any user-facing front-ends, which allow users to trade. Instead, it serves as a backend liquidity provisioning tool to support user-facing DeFi applications. There is a growing number of protocols that utilize this capital and generate trading fees for stakers. See the "Built on Synthetix" section to learn more.
We should make clear the distinctions between the different areas of "Synthetix":
The Synthetix Protocol: A suite of smart contracts that provisions liquidity with the input of Synthetix Governance to enable various financial derivative products.
The Synthetix Staking Interface: A web interface that allows for easy interaction with Synthetix Staking and other synthetix products.
Synthetix Governance: A representative council system that governs Synthetix. Four staker-elected councils exist Spartan, Treasury, Ambassador, and Grants Council.
Synthetix Partners & Integrators: Protocols listed under the Synthetix Partners and Integrators section have integrated with Synthetix products and liquidity to build user-facing protocols for varying use cases.
The Greater Synthetix Ecosystem: Many additional protocols have spun out of the Synthetix Community or have very close relationships with Synthetix. While these protocols do not directly integrate with Synthetix liquidity, they are closely intertwined with Synthetix.
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