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Synthetix V3: Crucial Details You Need to Know About This Upgrade!

Synthetix V3 is evolving the derivatives trading landscape with a range of Pools and Vaults for stakers and protocols to collateralize new derivatives markets. V3's key features include Multi-Collateral Staking, a Developer-Friendly System, and Cross-Chain capabilities.

Synthetic V3 to Release in Phases

Decentralized Finance (DeFi) protocol Synthetix has launched V3 on Ethereum Mainnet and Optimism after a security audit by Open Zeppelin, Iosiro, and Macro. 

Upon initial release, the V3 didn’t have all the features available. The release of Synthetix V3 will take place gradually over the coming months as users will transition from Synthetix V2x to Synthetix V3. Let’s have a look at the features that will be made available. 

Features of Synthetix V3:

  • Variety of Derivative Markets: Through v3, Synthetix becomes a layer of liquidity on which different derivative markets can be built, such as perpetual futures, spots, options, insurance, and exotics. 
  • Synthetic Asset Creation: The use of market pricing logic and price feeds allows the deployment of new synthetic assets like Spot BTC, Spot ETH, ETH Perps, BTC Perps, ETH Options, etc. Previously, these assets required approval from governance, but soon they will rely only on market logic and price feeds.
  • Cross-Chain Infrastructure: Synthetix V3 employs cross-chain functionality and supports synthetic assets on any EVM compatible chain. As a result, the destination chain is not subject to slippage due to a lack of liquidity.
  • Multi-Collateral Staking: Governance in V3 supports any collateral for backing synthetic assets. This will reportedly increase sUSD liquidity and the markets supported by Synthetix. Further, Governance will be able to adjust variables such as collateral requirements and rewards.
  • More Secure Synthetix Loans: Users can now provide collateral to generate sUSD without incurring debt pool risk, interest costs, or issuance fees.
  • Differentiated Liquidity (Debt) Pools: Instead of delegating collateral to the entire debt pool as in V2x, users can select the pools to provide collateral to and then decide which markets and assets to support within those pools.
  • Choice From Multiple Oracles: With V3, multiple Oracle solutions are available such as Chainlink and Pyth, giving market creators better control over the oracles that power their markets. 
  • Rewards Manager: Pool creators can attach rewards distributors to vaults, rewarding liquidity providers that offer specific collateral types. There are a variety of ways to earn rewards, including market fees and token distributions.

Due to the fact that V3 does not have any markets attached to it currently, its primary function is to generate a dollar-denominated stablecoin for use in integrated markets. Synthetix (SNX) is trading at $2.18, up 1.60% in 24 hours.

What is Synthetix:

Synthetix is a decentralised liquidity layer built on Ethereum and Optimism that acts as a backend for DeFi protocols. Stakers provide liquidity to collateralize a portfolio of synthetic assets in exchange for rewards and market yields. This liquidity is used to underwrite synthetic assets and perpetual futures trading at oracle prices, removing the need for traditional order books and counterparties. As a result, liquidity is commutable and fungible across markets, and traditional slippage is eliminated.

Learn more about Synthetix:

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