One of the protocols that are part of DeFi (decentralized finance) is Synthetix. It is an issuer of synthetic assets that refer to digital tokens. Synthetix users can obtain income from the protocol by making their resources available as part of its collateral. Here’s how to make gains on the platform.
By using Synthetix, the investor gains exposure to assets without necessarily having possession of any of them. What he will have will be a digital token that represents an asset. The Synths track the value of the asset underlying this digital token. But Synths do not come out of anywhere. To create them, you must use SNX, the network’s native digital asset, as collateral.
Step by step on how to collect Synthetix income
Thus, the investor needs first to buy SNX on some exchange. Then, he must access the Synthetix website and click “Staking” in the top bar. This button opens the part of the site with Mintr — Synthetix’s smart contract. Here, the user must connect one of the available e-wallets. It is this process that logs the user into the protocol. After login, then click the “Mint” button and thus turn the SNX into sUSD.
After creating sUSD, the user will earn income from the fees paid for offering their resources as collateral to Synthetix. To collect these gains, just go to Mintr’s control panel, click “Claim” and then choose the amount to collect.
However, Synthetix explains that this process is not immediate. When you make your sUSD available, you create a kind of debit. The value of this debt fluctuates according to the gains and losses of other Synth owners.
According to the site, whenever someone has a Synth that values itself, the gain is distributed proportionally among all those who made their sUSD available as collateral. Thus, the debt of these users will be gradually deducted. Only when it reaches zero will the user unlock the resources he offered as guarantees to the platform.