Crypto Academy Week 4 Homework Post for @gbenga: Ethereum Blockchain Explain.BY@AZIZULHASSAN
Hello everyone this is the homework 10 that I am doing steam Crypto Academy and today I will be talking about ethereum blockchain and a really good project that you all should know about and is this a that we have to say it in our own words so I won't be using any difficult or any e definitions for for technical world so I will try to to explain it as good as I can in my own words what this is and how it work the different features and everything I will try to explain so let's start I hope you will learn something from it
What is Synthetix
source
let's talk about synthetics synthetics is basically a decentralized payment network where users can transact directly in a price stable cryptocurrency people will use stable coins to pay fees to people who collateralize the network compensating them for the risk of providing collateral and stability so the people who actually control the money supply here are the collateral providers the collateral providers control the money supply and fees are paid out based on how well these collateral providers stabilize the network so basically synthetics rewards providers who stabilize the network and charges those who demand stability so it rewards suppliers of stability and charges those who demand for it so synthetics actually has two coins within the network one is the synth and one is the snx token which is the synthetics network token
synth
now the synth is a stable coin that has a floating supply the price is measured in fiat and is stable it has stability and it is a superior medium of exchange the synths track the prices of different assets which could be exchanged for example there can be a susd or a synth us dollar and a synth btc or sbtc and they can be exchanged on the synth exchange so this exchange is automatic and it's always liquid and since represents the assets so you basically just trade on the price action of the synth or the asset all this means that you can always make the trade because there is always liquidity now how are these assets updated you know how are we tracking the price of let's say airbnb the stock if you have since airbnb well the value of the assets on this exchange on the synthetic exchange is updated by oracles that is they get the prices from feeds from outside sources and then they consolidate all these outside sources data and then it uses the aggregate price so normally what we have is we have the blockchain and assets in the real world that don't really talk to each other they don't talk to each other they can't but synthetics has made it so that we have these synths these assets these synths are representative of assets and these outside sources outside data but they didn't used to be able to talk to each other but now with this synthetics network they can so that is the innovation here so in order to power these oracles to get this data synthetics actually have half of the work being done by them and the other half being done by chain link
synthetics network token
all right now we're going to talk about the synthetics network token so this token provides the collateral for the system and has a static supply so this token gives the right for the holder to issue sense whose value is proportional to the token that is staked so for an example if you have a dex token worth 17 then you can issue since worth up to 17 now the snx is a decentralized asset and the value of it really comes from the fees generated in the network it collateralized god for the life of me i cannot pronounce collateralized collateralized so here's the thing there will always be more synths since stable coins than snx the things that issue them now the system really incentivizes snx holders to issue and destroy synths based on changing demand so ultimately the value of snx affects the synth supply so remember since snx is not a physical asset it doesn't need a trust or custodian you don't need someone to guard it like someone guards a block of gold or a safe and a bank the value comes from supply and demand which makes it really really pretty much transparent so the good thing is you don't have a central figure like the federal reserve pumping supply when they want to whenever they want to changing the value of the asset the value of the asset is changed by supply and demand which is what it should be so the snx must fulfill two aims one provide the system with collateral two participate in stabilization of synth price and as long as there are more since than snx the synths can be redeemed for their price for example one cents for one dollar because snx is the collateral but for that collateral for taking on that risk snx holders are paid to take on that risk buy the since users whenever they transact via fees so all the snx tokens are already created there will only ever be 212 million 424 thousand and 133 tokens now the since tokens changes and responds to issuance by snx tokens for example with the us dollar the system will automatically always incentivize smx holders to supply just enough synth to keep that since price at one dollar and vice versa when we have a snx holder that sells out the respective amount of synths are destroyed because the value that came from that snx holder must be destroyed to keep the system in equilibrium so here is how the game is played the snx holder is awarded a fee and that fee changes based on supply and demand and the fee that is collected is maximized when the since price is as close as it can get to one dollar so that's how it keeps it stable the snx holders are incentivized to keep that synth price as close to a dollar as possible to collect the most Fees
what do i think about this project
my thoughts on all this so the since acts as a stable coin that tracks an asset like the us dollar or euro gold etc but it does not suffer from inflation because the supply and demand of synths is issued or destroyed by snx holders which are really forced by the system for example to keep the synths at one dollar in order to keep it stable enough for it to be spent on real-world products and services so it really takes out the volatility but the value of sins will always be because there is collateral i think as the government prints more money the value of snx will become more expensive because it's both a hedge of inflation like bitcoin and a supplier of synth to keep with the dollar how i think of it is if we have an snx which has issued synth us dollars then if we experience hyperinflation in the u.s then that snx will be very very expensive and when that happens i think people can really leverage the network to switch to other cryptocurrencies or other stable coins to use rather than synth us dollar
THANK YOU SO MUCH
MY ACHIVEMENTS ONE POST
SPECIAL MENTIONS TO
@steemcurator01
@steemcurator02
@booming01
@booming02
@booming03
@steemcurator06
to get there support.
BEST REGARDS
@azizulhassan
Hello, I will make this straight. I do not want to go into many details but for me, this post is a NO.
It is visible that this post was transcribed using an AI, either Siri, Bixby, or Google Assistant. It lacks punctuation, it sounds just like a youtube video being transcribed by a bot, and it lacks organization. A proof that it was transcribed by a bot is in the name of the project "It is called Synthetix not Synthetics".
Part of the contents in this post can be found in this video
when i was researching for it i did got some help from the articles and videos but i wrote this using voice in google docs maye beacuse of that it happent the name i use voice becouse i make many mistake in typing english beacuse of that maybe it happent so i cant say anything else i did that now its on you